by Reuters and Israel Hayom Staff
Sources say goal is to cut Iranian oil exports to under 1 million barrels per day
The United States
aims to cut Iran's crude exports by about 20% to below 1 million barrels
per day from May by requiring importing countries to reduce purchases
to avoid U.S. sanctions, two sources familiar with the matter told
Reuters.
U.S. President Donald Trump eventually aims
to halt Iranian oil exports and thereby choke off Tehran's main source
of revenue. Washington is pressuring Iran to curtail its nuclear program
and stop backing militant proxies across the Middle East.
The United States will likely renew waivers
to sanctions for most countries buying Iranian crude, including the
biggest buyers China and India, in exchange for pledges to cut combined
imports to below 1 million bpd. That would be around 250,000 bpd below
Iran's current exports of 1.25 million bpd.
"The goal right now is to reduce Iranian
oil exports to under 1 million barrels per day," one of the sources
said, adding the Trump administration was concerned that pressing for a
complete shutdown of Iran's oil in the short-term would trigger a global
oil price spike.
Washington may also deny waivers to some countries that have not bought Iranian crude recently, the sources said.
The U.S. reimposed sanctions in November
after pulling out of a 2015 nuclear accord between Iran and six world
powers. Those sanctions have already halved Iranian oil exports.
To give time to importers to find
alternatives and prevent a jump in oil prices, the U.S. granted Iran's
main oil buyers waivers to sanctions on the condition they buy less in
the future. The waivers are due for renewal every six months.
"Zeroing out could prove difficult," one of
the sources said, adding a price of around $65 a barrel for
international benchmark Brent crude was "the high end of Trump's crude
price comfort zone."
Brent crude settled at $67.55 a barrel on Wednesday.
Both sources said they were briefed by the
Trump administration on the matter but were not authorized to speak
publicly about it.
While the latest talks on waivers aimed for
a reduction in exports, the sources said the administration remained
committed to a complete halt in the future.
Brian Hook, the State Department's special
representative on Iran, also said in remarks at an industry conference
in Houston on Wednesday that Washington is pursuing its plan to bring
Iranian crude exports to zero.
Trump "has made it very clear that we need
to have a campaign of maximum economic pressure" on Iran, Hook said,
"but he also doesn't want to shock oil markets."
A State Department energy bureau
spokesperson declined to comment on new volume targets for importers but
said U.S. officials were constantly assessing global oil markets to
determine the way forward with Iran sanctions waivers.
"On the numbers part, we'll get an updated
assessment as we get closer to the end of the 180-day period," of the
first round of waivers that ends in May, the spokesperson said.
Washington in November provided waivers to
eight economies that had reduced their purchases of Iranian oil,
allowing them to continue buying it without incurring sanctions for six
more months. They were China and India, along with Japan, South Korea,
Taiwan, Turkey, Italy and Greece.
All eight are in bilateral talks about the waivers, sources said.
The administration is considering denying
extension requests made by Italy, Greece and Taiwan – in part because
they have not made full use of their waivers so far, one of the sources
said.
Greece and Italy were not buying any Iranian oil, Iran's oil minister Bijan Zanganeh was quoted as saying in February.
It is unclear whether the administration
will be able to convince China, India and Turkey – all of whom depend
heavily on Iranian oil and have criticized the U.S. sanctions on Iran –
to reduce imports.
"India, China and Turkey – the three tough
cases – will continue to negotiate with the administration and are
likely to keep their waivers," one of the sources said.
Washington is pressuring allies Japan and South Korea to reduce purchases of Iranian crude, the source said.
The administration would likely struggle to
cut Iran's exports much below 1 million bpd due mainly to strong demand
from China, India and Turkey, said Amos Hochstein, who was in charge of
Iran sanctions as the top U.S. energy diplomat under former President
Barack Obama.
"Looking at the market right now it seems
reasonable that Iranian exports will remain at the 800,000 to 1.1
million bpd average," said Hochstein, who talks with energy ministers
from big oil consumers.
He said he expects China and India purchases alone to account for around 800,000 to 900,000 bpd.
Reuters and Israel Hayom Staff
Source: http://www.israelhayom.com/2019/03/14/us-aims-to-cut-iran-oil-exports-by-20-starting-in-may/
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