Published: Fri, November 09, 2018
Markets | By Otis Pena

The knowns and unknowns of US Iran oil sanction waivers

The knowns and unknowns of US Iran oil sanction waivers

In Moscow's first official reaction since the restoration of Washington's bans on Tehran, Russian Foreign Minister Sergei Lavrov said on Tuesday that the USA sanctions are "not legitimate".

The new round of U.S. sanctions, which had been lifted under a multilateral 2015 nuclear accord with Iran, came back into force on November 5, drawing criticisms from the United Nations as well as Washington's allies in the European Union.

Lavrov emphasized that Russian Federation and its European partners were looking for ways to maintain economic ties with Iran.

India has warm relations with Iran and has joined China and European powers in saying it was not obligated to comply with the unilateral USA sanctions, although it has sought to appease Washington by curbing some of its Iranian oil imports.

A first round of American sanctions took effect in August, targeting Iran's access to the U.S. dollar, metals trading, coal, industrial software, and auto sector. Moreover, Trump's sanctions against Iran's financial sector essentially make 30 banks and their subsidiaries off-limits to foreign lenders, undermining its means to facilitate trade.

Front-month Brent crude oil futures were at $72.27 a barrel at 0800 GMT, up 21 cents, or 0.3 percent, from their last close.

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"We've already reduced Iranian crude oil experts by over a million barrels per day".

On Tuesday, Zanganeh, the oil minister, wrote a letter to the OPEC chief, asking that the so-called Joint Ministerial Monitoring Committee - which consists of all OPEC and non-OPEC countries -some members of the committee "openly" take side with the United States on the matter of sanctions on Iran.

Iran emerged in early 2016 from years of global sanctions under a deal with world powers that curbed its disputed nuclear programme.

The report also quoted a Fitch solutions analyst as saying that the new sanctions would not lead to the collapse of the Iranian economy, as the country would be able to keep exporting a significant volume of its crude oil.

A collision between an oil tanker and a military frigate off Norway's coast temporarily shut down the nation's largest crude-export terminal, halted the pumping of several North Sea grades, and boosted immediate natural gas prices in the United Kingdom. The oil import bill for the current financial year, 2018-19, is expected to rise to $125 billion, i.e., by 42 per cent. We have so many countries that are on our side.

On Wednesday, President Trump took credit for keeping oil prices low. First of all, unlike the earlier UN sanctions, it has been unilaterally imposed by the United States. While ordinary Iranians struggled, Iran's clerical and security establishment and business world sought kept the economy running by means including resorting to barter as well as foreign currencies other than the U.S. dollar. To defy the United States sanctions and preserve its strategic autonomy would require a break from this strategic alliance - something which the Modi regime can not even contemplate.

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