State Department to End Iran Oil Waivers

The State Department is expected to announce the end of waivers for countries to import Iranian oil on Monday, part of the Trump administration’s effort to drive Iran’s exports to zero, people familiar with the decision told the Wall Street Journal.

The U.S. had previously granted eight countries a 180-day waiver to continue to buy Iranian crude despite U.S. sanctions, provided that each took steps to reduce purchases and move toward ending imports. The deadline for renewing the waivers was set to fall on May 2.

China, India and Turkey were among Iran’s top customers and had been expecting to receive a renewed waiver to continue to buy Iran’s oil. It wasn’t immediately clear whether the decision to end oil waivers would put a complete halt to permitted exports, the Journal adds.

A “wind down” grace period would allow certain customers to continue to receive the oil it had already purchased, or agreed to buy, two people familiar with the matter said. It wasn’t immediately clear how such a mechanism would work.

“China consistently opposes U.S. unilateral sanctions and long-arm jurisdiction,” said Geng Shuang, a spokesman for China’s Foreign Ministry, at a regular news briefing on Monday. “China-Iran cooperation is open, transparent and in accordance with law, it should be respected.”

Earlier this month, the State Department’s top envoy for Iran, Brian Hook, said that three jurisdictions out of the eight that received oil waivers last year had already moved to zero imports. Hook didn’t name them, but analysts that study the oil market have said Italy, Greece and Taiwan have halted imports this year, the Journal adds.

U.S. sanctions targeting oil exports from Iran and Venezuela have tightened global supply and driven prices higher this year. Markets are closely watching the latest outbreak of chaos in Libya, which has been pumping more than 1.2 million barrels of oil a day.

Libyan officials have warned that output risks dropping to zero if hostilities escalate. The uncertainty has helped cause the global benchmark oil price to rally to its highest levels in nearly six months, surging above $74 a barrel on Sunday evening.

Trump and the team led by his national security adviser, John Bolton, have pushed for a more hard-line strategy leading up to the May 2 deadline, urging a more complete push to zero out Iranian exports.

Buyers had received conflicting messages: Some State Department officials, even in recent weeks, had assured waiver recipients of more to come. That led White House officials to take more direct control of diplomatic efforts in order to end the waivers.

White House officials expected an announcement about the end of waivers to come through its own channels, reflecting the President’s own role in managing the removal of Iranian oil from the market.

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