India on Thursday said it was engaged with the US, Iran and other stakeholders on the issue of American sanctions on import of Iranian oil, amid indications that the Trump administration may grant New Delhi waiver from punitive measures. The other four countries that will get waivers weren't identified.
Under the law, the US president must periodically issue a "determination" on whether there is sufficient supply in the market from non-Iranian sources for countries to significantly cut their Iranian purchases.
It was unclear how much crude those eight countries would be allowed to buy from Iran, whose oil exports have plummeted from an average of more than 2.5 million barrels per day to around 1.5 million bpd in recent weeks.
The United States is imposing new sanctions on Iran's oil industry after Washington withdrew from a nuclear deal between Tehran and other global powers.
Already, through its pressure campaign, the USA has managed to reduce Iran's oil exports from 2.7 million to 1.6 million barrels a month, according to internal US estimates. After the latest round of U.S. sanctions was announced, HPCL was the first Indian refiner to halt purchases from Iran after its insurer backed out.
Separately, Oil Minister Bijan Zanganeh said on Wednesday that 280,000 barrels of oil had been sold on the country's energy bourse and that an additional 720,000 barrels would be offered for sale again on the exchange, according to SHANA, the news website of the Iranian Oil Ministry.
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 ones", IRIB quoted Iran's Deputy Oil Minister Ali Kardor as saying.
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"We think Trump will agree to China importing some volumes, similar to the treatment that India and South Korea receive", Clayton Allen of Height Securities said in a note on Friday.
"We want to achieve maximum pressure, but we don't want to harm friends and allies either", Bolton told the Hamilton Society in Washington on October 31, signalling a possible softening of the White House's demand that all countries reduce their Iranian oil imports to "zero".
However, the waivers seem to be making the sanctions totally irrelevant, as the countries receiving them account for a lion's share of the oil Iran exports.
The Indian side, while building its case for a waiver, assured the U.S. that this payment mechanism ensures Iran can't use oil money from India for any terror-related activity, a key American concern.
Russian Federation has been planning to import oil from Tehran but no major projects have materialized.