US terminates Iran sanctions waivers: Update 2
Washington -- President Donald Trump will not renew waivers from US sanctions for the remaining buyers of Iranian oil, the White House said today.
The administration in November issued six-month exemptions from US sanctions to enable China, Greece, India, Italy, Japan, South Korea, Taiwan and Turkey to continue buying Iranian oil. But it has decided not to renew them after 2 May 'to bring Iran's oil exports to zero, denying the regime its principal source of revenue.'
Riyadh and Abu Dhabi already are negotiating directly with Iran's remaining customers to make up the shortfall in supply, secretary of state Mike Pompeo said today.
Saudi Arabia and the UAE have assured Washington they will make up the gap left by eliminating exports from Iran, Pompeo said. 'I have had conversations, the president has had conversation (with Saudi and UAE leaders) and they have committed to ensuring enough supply in the market.'
Saudi Arabia is closely monitoring developments in the oil markets and in coming weeks 'will consult with other oil producing countries and the main oil consuming countries to maintain market balance and its stability,' Saudi oil minister Khalid al-Falih said, according to the official Saudi Press Agency.
While Italy, Greece and Taiwan already have stopped imports from Iran, Asia-Pacific crude importers would face a scramble to replace more than 1mn b/d of Iranian imports to comply with the US decision to end sanctions waivers.
Pompeo contends the decision to end the Iran waivers will not affect the stability of global oil markets. 'The oil market remains well supplied,' he said.
But the decision will put an additional strain on the global supply at a time when the US is separately enforcing sanctions on Venezuelan oil exports.
Pompeo cited US Energy Information Administration data to make the case that the oil market is well supplied. But the agency in its most recent assessment of the effects of sanctions on Iran suggested the opposite would be true if that Opec country were to be cut off from the market.
Ice Brent crude futures already had risen to their highest since October in anticipation of the US announcement. But the US dismissed the rise as unconnected with its policy decision. 'It is hard to conflate our announcement' and other factors that affect oil markets, assistant secretary of state Frank Fannon said. He noted the global oil inventories are at five-year average levels, which he said gave the US confidence about its decision.