The United States announced on Monday (22 April) 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.
The White House said that Saudi Arabia and the United Arab Emirates – close US allies that back President Donald Trump’s hawkish stance against regional rival Iran – would work to make up the difference in oil to ensure that global markets are not rocked.
“This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue,” the White House said in a statement.
“The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies and security in the Middle East,” it said.
Eight governments were initially given six-month reprieves from the unilateral US sanctions on Iran. They include India, which has warm ties with Washington but disagrees on the US insistence that Iran is a threat.
Other countries that will be affected include China and Turkey, opening up new friction in contentious relationships if the US goes ahead with sanctions over buying Iranian oil.
China and India are currently the largest importers of Iranian oil.
The others – Greece, Italy, Japan, South Korea and Taiwan – have already heavily reduced their purchases from Iran.
Trump last year withdrew the US from an accord negotiated by his predecessor, Barack Obama, under which Iran drastically scaled back its nuclear program in return for promises of sanctions relief.
The Trump administration, backed by Saudi Arabia and Israel, has instead unilaterally imposed sanctions and demanded that other countries follow suit.
Iran is India’s third-largest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).
The waiver to India was also seen as a recognition by Washington of New Delhi’s role in development of the Chabahar Port, which is of immense strategic importance for the development of war-torn Afghanistan.
In May 2016, India, Iran and Afghanistan had inked a pact which entailed establishment of Transit and Transport Corridor among the three countries using the port as one of the regional hubs for sea transportation in Iran, besides multi-modal transport of goods and passengers across the three nations.
