USA curbs looming, India reduces Iran oil imports by 30%

US Secretary of State Mike Pompeo talks with South Korean Foreign Minister Kang Kyung-wha during their meeting at Foreign Ministry in Seoul

US Secretary of State Mike Pompeo talks with South Korean Foreign Minister Kang Kyung-wha during their meeting at Foreign Ministry in Seoul

The US administration has agreed to allow eight countries to continue purchasing Iran's crude oil after Washington's sanctions on Tehran take place next Monday, a senior official said Friday.

The US has insisted all along that it wanted every country to reduce oil imports from Iran to zero eventually, but was open to country-specific waivers that would allow limited imports by those pledging "significant" cut.

Other countries, including Iraq and Afghanistan, also depend on some imports from Iran.

Bloomberg reported on Friday that South Korea and Japan had received waivers along with India, which relies heavily on Iranian supplies.

US national-security adviser John Bolton says the White House wants sanctions on Iran's oil sector to put a strain on Iran's economy, but it does not want to harm "friends and allies" that depend on the oil.

The objective of the law, which came into effect during the Obama administration, was to put pressure on Iran to curtail its nuclear programme by forcing its major oil customers to reduce their purchases.

The Iranian rial has hit record lows against the US dollar in recent months under the threat of revived USA sanctions, with heavy demand for dollars among ordinary Iranians trying to protect their savings.

India had imported about 22 million tonnes of crude oil from Iran in 2017-18 and initially planned to raise that to about 30 million tonnes in 2018-19.

Bolton said the administration understands that a number of countries, some close geographically to Iran which he visited last week, and others "may not be able to go all the way, all the way to zero immediately".

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A waiver will come as a big relief to Indian Oil and MRPL, the two largest Iranian oil consumers. "I don't know whether these waivers are permanent or temporary", state TV quoted Iran's Deputy Oil Minister Ali Kardor as saying.

On Friday, Brent futures LCOc1 traded flat at around $73, having fallen 12 percent since the beginning of October. The waivers "look likely but not yet formally decided", a government official told The Hindu, indicating that the final word rests with U.S. President Donald Trump who must sign them before November 4.

According to the Iranian Oil Ministry, 60 percent of the country's oil exports go to Asian countries, including China and India - the two top clients - as well as South Korea and Japan, and the remaining 40 percent to European countries including Turkey.

Another country that has been seeking a sanctions waiver is Turkey.

"The US may use waivers to slow-walk implementation, but these will not apply indefinitely", Allen said.

U.S. Arab allies Saudi Arabia and the United Arab Emirates as well as Israel have long sought for Washington to work to curtail non-Arab and predominantly Shiite Muslim Iran's influence in the Middle East, including in war-torn Syria.

There have been indications that India may not totally stop import of crude oil from Iran.

Russian Federation has been planning to import oil from Tehran but no major projects have materialized.

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