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Daniel Bases

The United States on Monday turned the screws harder on Iran, as well as China and other nations that import its oil, by demanding they stop buying from Tehran by May 1 or face possible sanctions.
China is the world’s No 1 oil importer and a major buyer of Iranian oil.
US Secretary of State Mike Pompeo’s announcement that Washington would no longer issue exemptions from sanctions for the import of Iranian oil represents the Trump administration’s latest move to starve Iran of its main source of revenue. Crude oil prices surged higher on fears of a supply crunch.
Pompeo tried to allay those concerns by saying that major oil-producing nations such as Saudi Arabia and the United Arab Emirates had assured they could make up any supply shortfalls to maintain a steady market. He also touted the US as a major source of oil production.




“We are going to zero,” Pompeo said of the waivers, adding that there would be no grace period for compliance.
“We will continue to enforce sanctions and monitor compliance. Any nation or entity interacting with Iran should do its diligence and err on the side of caution.”
Washington had granted so-called Significant Reduction Exceptions waivers to nations such as China, India, Japan, South Korea, Italy, Greece, Turkey and Taiwan that allowed them to continue their purchases.
Iran exports approximately 1.1 million barrels of crude oil a day, down from around 2.5 million barrels before Washington reimposed sanctions in November.
China tells state-owned oil firms to stop buying from Iran
The May 1 deadline occurs just as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to travel to Beijing to continue trade talks, which had injected some hope into global markets that a deal would be reached and uncertainty removed.
A 2015 agreement to curb Iran’s nuclear programme, signed by Tehran and six world powers, had provided Iran with sanctions relief. But the restrictions were eventually put back into play after US President Donald Trump’s decision last May to unilaterally pull out of the deal.
Eliminating the sanctions waiver for China has analysts wondering if there isn’t some daylight between what Pompeo said and getting “to zero”.
“This might be linked to the trade talks, but that is hard to know,” said Adam M Smith, partner at the law firm of Gibson Dunn & Crutcher in Washington. “The China-US relationship is multifaceted, deep and complicated. It is hard for me to believe that the decision to end the waiver wasn’t done without prior discussions with Beijing and the other countries losing the waiver.”




“The move today definitely could serve as an irritant between Beijing and Washington because, not least of all, China needs energy. To make China’s importation of energy difficult, for whatever reason, could be challenging, and China does not like to be susceptible to US jurisdictions, with respect to sanctions, or on anything else for that matter,” said Smith, a former senior adviser to the Office of Foreign Assets Control, a division of the US Treasury Department, during the Obama administration.
Even though Trump has said the two sides are close to a trade deal, there are still reported to be differences over an enforcement mechanism to address American complaints about unfair Chinese trade practices and technology theft.
“I think it’s very unusual timing in the middle of a supposed 10th round of trade negotiations. Does the right hand know what the left hand is doing? I would not want to be Lighthizer or Mnuchin going to Beijing with this,” Dennis Wilder, assistant professor of practice in Asian studies at Georgetown University, said at a Brookings Institution meeting on Monday.
Donald Trump names Iran’s Revolutionary Guard a terrorist group
“Is the priority Iran sanctions or a trade agreement? A trade agreement should be the priority,” said Wilder, a former chief of China analytic studies in the Directorate of Intelligence during the administration of George HW Bush and senior reviewer of the president’s Daily Brief during the Obama administration.
Pompeo’s announcement adds to a growing slate of actions taken against Iran. A week ago, Washington officially designated the elite Islamic Revolutionary Guards as a foreign terrorist organisation. That makes it easier for the US to prosecute companies and people that “knowingly provide material support or resources” to the Revolutionary Guards.
“The goal remains simple: to deprive the outlaw regime of the funds it has used to destabilise the Middle East for four decades, and incentivise Iran to behave like a normal country,” Pompeo said.

Benchmark Brent crude oil futures prices settled at a near six-month high of US$74.04 a barrel on Monday. One analyst said the US move would cause oil markets to operate in a much tighter supply environment for the rest of the year because spare capacity would be exhausted if Iran was unable to sell its oil.
“A key question at this point is enforcement by China and India,” said S&P Global Platts Analytics’ Shin Kim. “Iran’s reaction will almost certainly be aggressive, and threats to the Strait of Hormuz have already commenced.”
Additional reporting by Mark Magnier in Washington


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Iran

China to be exposed to sanctions as US says it will end Iran oil import waivers on May 1

US Secretary of State Mike Pompeo announces the end of sanction exemptions for the import of Iranian oil, starting May 1. Photo: Xinhua

FILE PHOTO: A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi/File Photo/File Photo

‘We’re going to zero’: US to end Iran oil waivers on May 2, opening up China to US sanctions

US Secretary of State Mike Pompeo speaks during a press conference at the US Department of State in Washington on April 22, 2019. Photo: AP

Secretary of State Mike Pompeo, left, listens to President Donald Trump speak during a Cabinet meeting in the Cabinet Room of the White House on July 18, 2018, in Washington, D.C. (Olivier Douliery/Abaca Press/TNS)

US Secretary of State Mike Pompeo speaks during a press conference at the US Department of State in Washington, DC on April 22, 2019. - The United States announced on Monday it will no longer grant sanctions exemptions to Iran's oil customers, potentially punishing allies such as India as it tries to squeeze Tehran's top export. (Photo by ANDREW CABALLERO-REYNOLDS / AFP)

In this photo released by the official website of the office of the Iranian Presidency, President Hassan Rouhani speaks during a ceremony commemorating "National Day of Nuclear Technology" in Tehran, Iran, Tuesday, April 9, 2019. Rouhani declared that Iran's elite paramilitary Revolutionary Guard's popularity would only surge in the wake of the designation, saying guard members would be dearer "than any other time in the hearts of Iranian nation" following the White House's decision to designate the force a foreign terrorist organization. (Iranian Presidency Office via AP)

The US eventually aims to halt Iranian oil exports and thereby choke Tehran’s main source of revenue. File photo: Reuters

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The move represents the Trump administration’s latest move to starve Iran of its main source of revenue
China is the world’s No 1 oil importer and a major buyer of Iranian oil


The move, announced by US Secretary of State Mike Pompeo, represents the Trump administration’s latest move to starve Iran of its main source of revenue.


China to be exposed to sanctions as US says it will end Iran oil import waivers on May 1

The move represents the Trump administration’s latest move to starve Iran of its main source of revenue China is the world’s No 1 oil importer and a major buyer of Iranian oil

The move represents the Trump administration’s latest move to starve Iran of its main source of revenue

China is the world’s No 1 oil importer and a major buyer of Iranian oil