Published: Tue, November 06, 2018
Markets | By Jeffery Armstrong

U.S. steps up Iran-bound cargoes despite sanctions

U.S. steps up Iran-bound cargoes despite sanctions

Iran greeted the re-imposition of US sanctions on Monday with air defense drills and an acknowledgement from President Hassan Rouhani the nation faces a "war situation", raising Mideast tensions as America's maximalist approach to the Islamic Republic takes hold.

Takashi Tsukioka, president of the Petroleum Association of Japan, said in September that Japanese oil distributors would temporarily suspend oil imports from Iran until the end of the negotiations. Gholamali Khoshroo called on Antonio Gooteresh to uphold the rule of law.

The administration says China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey will be allowed to continue importing Iranian oil for a limited time.

The sanctions end all the economic benefits America granted Tehran for its 2015 nuclear deal with world powers, though Iran for now continues to abide by the accord that saw it limit its enrichment of uranium.

Washington in May withdrew from a 2015 nuclear deal signed between world powers and Iran under which worldwide sanctions against Iran were lifted in return for curbs on its nuclear program.

Iran's energy, shipping and banking were the sectors which came under the "toughest sanctions ever" by the Trump administration on Monday.

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He, however, emphasised that his effort to keep the oil prices down has nothing to do with Iran. "I don't want to lift oil prices". "It will be gradual", the USA president said.

"That's our expectation. It's the reason for President Trump's policy", he said.

"These sanctions hit at the core areas of Iran's economy", he told reporters Friday.

In a statement issued over the weekend, the Kremlin's foreign ministry "strongly condemned" the new wave of USA sanctions, arguing that the move deals "another powerful blow to the Nuclear Nonproliferation Treaty (NPT)".

The U.S. Treasury Department imposed penalties on more than 700 Iranian and Iranian-linked individuals, entities, aircraft and vessels in the new sanctions.

Jahangiri said he had spoken to a handful of managers from companies on the USA sanctions list and that some had already formulated plans on how to deal with the measures. Among those are the biggest buyers of Iran's oil, China and India, as well as other key USA allies - Japan, South Korea, Turkey, Italy, Greece, and Taiwan.

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Trump on Monday said he wants to impose sanctions on Iran's oil gradually, citing concerns about shocking energy markets and causing global price spikes.

The three countries combined produced more than 33 million barrels per day (bpd) for the first time in October, meaning they alone meet more than a third of the world's nearly 100 million bpd of crude oil consumption. All of them lobbied heavily to be granted the six-month exemptions while promising to further reduce or end their imports and Secretary of State Mike Pompeo said the waivers were based on the specific circumstances of each and the need "to ensure a well-supplied oil market".

While Iran's crude exports could fall to little more than 1 million barrels per day (bpd) in November, traders and analysts say that figure could rise again from December as importers use their waivers to order crude from Iran.

However, the Democratic Party leadership criticised Trump for giving exemptions to some of the major Iranian oil importers.

Seoul was also granted an exemption to continue financial transactions with Iran's central bank, allowing South Korea to continue trading oil as well as nonsanctioned items with Iran, Seoul's Foreign Ministry said.

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