U.S. to grant waivers to eight Ira­nian oil buy­ers

Business a.m. - - ENERGY, POWER & RENEWABLES -

THE UNITED STATES has agreed to let eight coun­tries in­clud­ing China, Ja­pan, In­dia and South Korea keep buy­ing Ira­nian oil after it reim­poses sanc­tions on the Mid­dle Eastern pro­ducer on Novem­ber 5, a U.S. se­nior ad­min­is­tra­tion of­fi­cial said.

Waivers are be­ing granted in ex­change for con­tin­ued im­port cuts so as not to drive up oil prices, said the of­fi­cial, who asked not to be iden­ti­fied be­fore Sec­re­tary of State Michael Pom­peo an­nounces the num­ber of ex­emp­tions later on Fri­day, de­spite the Pres­i­dent Trump’s goal to choke off rev­enue to Iran’s econ­omy.

China, the lead­ing im­porter of Ira­nian oil is still in dis­cus­sions with the U.S. on terms, but is among the eight, ac­cord­ing to two peo­ple fa­mil­iar with the dis­cus­sions who also asked not to be iden­ti­fied. The other four coun­tries that will get waivers weren’t iden­ti­fied.

Reuters had re­ported that Chi­nese oil im­ports from Iran slumped by 34 per­cent on the 518,300 bar­rels per day in Septem­ber, at the same time, China’s crude oil im­ports from U.S. grew to 253,000 bar­rels per day de­spite the trade war be­tween the two large economies.

The ad­min­is­tra­tion is on a tightrope, and must main­tain a del­i­cate bal­anc­ing act with the waivers, en­sur­ing the oil mar­ket has suf­fi­cient sup­ply and avoid­ing a po­lit­i­cally dam­ag­ing spike in fuel prices, while also en­sur­ing that Iran’s govern­ment doesn’t col­lect enough rev­enue that the U.S. sanc­tions be­come ir­rel­e­vant, ex­perts have said.

Brent crude has fallen about 15 per­cent from over $85 a bar­rel to $72 per bar­rel on in­creas­ing spec­u­la­tion that at least some na­tions will get waivers, as well as signs that other OPEC mem­bers will pump more to off­set any sup­ply gap.

Pom­peo has pre­vi­ously said “it is our ex­pec­ta­tion that the pur­chases of Ira­nian crude oil will go to zero from ev­ery coun­try or sanc­tions will be im­posed,” but also ac­knowl­edged that waivers were be­ing ne­go­ti­ated with na­tions that say crude from the Mid­dle East pro­ducer are crit­i­cal to their en­ergy in­dus­try.

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