Saturday, 17 November, 2018

USA exempts three Iranian nuclear sites from sanctions

A Chinese vessel approaching beleaguered Iranian tanker Sanchi to help extinguish a fire that started after it collided with a Chinese vessel off China's shores US exempts India from certain sanctions related to development of Chabahar port in Iran
Melinda Barton | 09 November, 2018, 14:23

The exception granted by Secretary of State Mike Pompeo to USA sanctions reimposed on Iran on Monday also will permit the construction of a railway line from Chabahar port to Afghanistan, and for shipments to the war-torn country of non-sanctionable goods, like food and medicines, the spokesman said.

However, Washington granted waivers to Iran's biggest customers to allow limited imports for 180 days.

Iranian officials have said the waivers provide proof that the United States can not achieve its goal of cutting off all of Iran's oil exports.

Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges. Big power disunity and European Union moves to circumvent Trump's sanctions regime have given Tehran a psychological boost - but not dissuaded foreign businesses ranging from oil majors to trading houses and shipping concerns from pulling out of Iran for fear of incurring new USA penalties. WTI is set for a fifth weekly fall, down 4 percent so far this week.

The committee is due to hold a meeting next week in Abu Dhabi, the capital of the United Arab Emirates, an ally of Iran's regional rival Saudi Arabia.

Earlier in the session on Wednesday, oil traded lower as rising US inventories and sanction waivers allowing Iran to keep exporting crude reinforced an outlook for ample supplies. "I could get the Iran oil down to zero immediately but it would cause a shock to the market".

The original aim of the sanctions was to cut Iran's oil exports as much as possible, to quash its nuclear and ballistic missile programs, and curb its support for militant proxies.

Background: Since U.S. President Donald Trump announced the United States' withdrawal from the Iran nuclear deal, OPEC oil production has increased from 31.9 million barrels per day in May to 33.3 million barrels per day in October despite declining oil output from Iran. All of them maintain that they will continue to trade with Iran. "The US has given waiver to some countries including India".

But Iran supply is expected to rise after November as waivers are used to start ordering more Iranian oil. In May 2018, however, Trump withdrew the United States from the agreement, making a return of sanctions all-but-inevitable.

On November 5, the Trump administration had imposed the "toughest-ever" sanctions on Iran's banking, energy and shipping industries, in a move aimed at altering the "behaviour" of the country's regime. Still, Iran demonstrated considerable resilience and ingenuity in coping with earlier global sanctions, and there is little to suggest Tehran could not do this again.

The first round of penalties, which included cars, carpets, metals trading and access to the USA dollar, entered force in August.