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

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.