Asian buyers hope for US waivers on Iran oil
Iranian exports have slumped by 30% , or over 800,000 barrels a day, over the past six months
Asian buyers of Iranian oil are gaining confidence they will win US consent for some imports to continue, even after American sanctions snap back next month.
Major Iranian customers South Korea, India and Japan are in talks with Washington for waivers, highlighting the specific reasons they need to continue purchases, say those familiar with the discussions. Despite the upbeat tone, the exemptions from the US haven’t been finalised and may not end up being approved, they said, asking not to be identified because the negotiations are confidential.
The US has so far insisted that all purchases from Iran must drop to zero in an effort to put pressure on the Islamic republic to negotiate a new nuclear deal, after President Donald Trump in May walked away from a 2015 pact negotiated by Barack Obama. Even before American sanctions take effect, the oil market has tightened beyond what the White House expected, briefly sending Brent crude to a fouryear high over $85 a barrel.
If South Korea, India and Japan obtain waivers, it’s likely to be for lower imports than in the past with a commitment to reduce purchases over time.
Iranian exports slumped by 30 per cent, or over 800,000 barrels a day, over the past six months as buyers shunned purchases to avoid risking being cut off from the US financial system.
Zero imports
South Korea has a specific need for an ultra-light form of oil known as condensate from Iran’s South Pars fields. That’s because several of the nation’s plants are geared for processing this grade. It’s been forced to turn to alternatives from Norway to Saudi Arabia. Japan has temporarily halted loading Iranian oil ahead of US sanctions that take effect on November 4.
Top Iranian customer China remains a wild card. It opposes unilateral measures by the US, with which it’s fighting a trade war. But over the past few months, Iran’s shipments to China have declined.