U.S. Sanctions against Iran include temporary oil waivers for India

President Donald Trump leaves the Oval Office before departing on Marine One at the White House on October 22, 2018 in Washington, DC. (Getty Images)

WASHINGTON, D.C. — India is among eight nations, including China, that have received temporary oil waivers from the “strongest ever” sanctions targeting Iran imposed by the Trump administration. The action comes in the wake of President Donald Trump’s decision to pull out from the 2015 nuclear agreement reached by the Obama administration in concert with several other global powers.

At a press conference Nov. 5 at the Foreign Press Center, Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin said the sanctions kicked in during the early hours of that same day as Trump had declared them the “strongest ever” to go after key sectors of Iran’s economy. Pompeo and Mnuchin said the move would cripple Tehran’s energy, shipping and financial sectors and would only be relaxed if Iran would “change its behavior.”

Trump had said during his campaign that one of his first acts would be to rip apart the Iran nuclear deal, which he had described as “the worst deal ever.” He considered it not stringent enough to pressure Iran to curb its march toward developing nuclear weapons, despite the fact that the International Atomic Energy Agency has said Tehran was abiding by the terms of the accord.

The Trump administration also alleged it was scrapping the agreement because Iran had not stopped its funding and support for international terrorism and other “malign” activities in the region.

India, a major oil importer from Iran, had expressed concern that the U.S. sanctions could impact its economy and engaged in negotiations with Pompeo and Defense Secretary Jim Mattis when the two visited New Delhi a few months ago for the two-plus-two talks. India had continued these negotiations with other senior officials, requesting a waiver till it could find an alternate supplier of oil.

On Nov. 5, the Treasury Department acknowledged that China, India, South Korea, Turkey, Italy, Greece, Japan and Taiwan would be granted temporary waivers of 180 days. The sanctions target more than 200 companies and individuals in Iran’s energy and shipping sectors, including the Atomic Energy Organization of Iran and its 23 subsidiaries and associated individuals, 50 Iranian banks and their subsidiaries, and other integral entities to the country economy. Pompeo warned that the administration would be “relentless” in ramping up the pressure on Iran and its international economic dealings.

Pompeo said that more than 20 countries had already acquiesced and cut their oil imports dramatically from Iran as a result of the sanctions, drastically reducing Iranian exports by more than 1 million barrels.

Echoing Pompeo’s warning, Mnuchin said that the U.S. expected the countries granted the temporary oil waivers to also cut their oil imports from Iran because the U.S. would “aggressively enforce” the sanctions.

A few hours before Pompeo and Mnuchin spoke, Trump called the sanctions unprecedented saying there would be no let up until Iran changed its ways.

"We'll see what happens with Iran. But they're not doing very well," he said, referring to Iran’s economy. On Nov. 2, Pompeo had disclosed that the administration was giving six-month waivers to eight countries but did not name them. Pompeo said all of these countries had already taken steps to eventually reduce their Iranian oil imports to zero. The U.S. had set Nov. 4 as the deadline for countries to stop buying oil from Iran and the sanctions and penalties were to take effect on November 5 for those countries that were not granted waivers.

Pompeo said that the sanctions were "necessary to spur changes we seek on the part of the (Iran) regime. In order to maximize the effect of the President's pressure campaign, we have worked closely with other countries to cut off Iranian oil exports as much as possible.”

On Nov. 2, although Pompeo, despite pressing by reporters, refused to reveal the names of the countries that would be granted temporary oil waivers, but U.S. Special Representative for Iran Brian Hook, who also participated in the briefing at the State Department, strongly hinted India would be among the eight countries that would be given a temporary reprieve.

One of India’s biggest concerns about being affected by the collateral damage by these sanctions was New Delhi’s helping to develop Iran’s Chabahar port project to envisage trade with Afghanistan, in addition to shipping and banking.

India, which is the second biggest buyer of Iranian oil after China, has informed the U.S. that it’s willing to restrict its monthly purchase to 1.25 million tons or 15 million tons in a year (300,000 barrels per day), down from 22.6 million tons (452,000 barrels per day) bought in 2017-18 financial year.

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