Press Esc to close
Friday 25 July 2014
News updated at 5:43 AM IST
Weather
Max: 28.5°C
Min : 19.8°C
In Bangalore
Sunny day

U.S. likely to extend waivers to India, others

WASHINGTON , Dec 7, 2012, Reuters
Malta-flagged Iranian crude oil supertanker ''Delvar'' is seen anchored off Singapore March 1, 2012.  Reuters

The United States will likely give India, South Korea, Turkey and others another six-month reprieve on Friday from financial sanctions because they have reduced their purchases of crude oil from Iran, two U.S. government sources said on Thursday.

Oil shipments by Iran, the country's main source of foreign exchange, have more than halved in 2012 due to U.S. and European Union sanctions aimed at reining in Tehran's nuclear ambitions, pressuring its rial currency and igniting inflation.

Most of its remaining crude exports flow to energy-hungry Asia, where all of Iran's buyers are expected to eventually receive the waivers to sanctions, known as "exceptions", in exchange for cutting purchases of oil from the Islamic Republic.

Shipping sources say Iran's crude exports are set to drop by about a quarter in December from the preceding month to the lowest level since tougher sanctions were imposed this year, representing a loss of about $800 million at current prices.


On June 11, a number of countries, including Taiwan and South Africa, received their first round of reprieves to a sanctions law signed by President Barack Obama a year ago. The waivers are issued by the State Department.

Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless the purchases are reduced.

U.S. waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.

"There's nothing in the sanctions law that says the U.S. has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.

Japan and 10 EU countries received six-month sanction reprieves from the United States in September.

SANCTIONS HIT

The sanctions aim to choke funding to Tehran's nuclear program by slashing demand for Iran's oil exports.

The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.

Iranian exports took a deep hit from July once EU sanctions banning insurance cover for ships carrying Iranian oil came into force. That has meant major buyers China, South Korea and India ask Iran to ship the oil because they are unable to secure insurance cover for vessels.

But delivery has often been delayed because the Iranian fleet is severely stretched, with an increasing number of its tankers being used as floating storage for unsold oil.

Iran's customers, including Turkey, the only non-Asian buyer, will lift 834,000 barrels per day (bpd) of crude in December compared with 1.08 million bpd in November, an industry source with direct knowledge of Tehran's shipping plans said. The numbers are preliminary and actual imports may vary.

The December number would make Iranian crude imports by Asia's top buyers for the full year about 1.06 million bpd, down roughly a quarter from a year ago, Reuters calculations show.

China, the world's second-largest oil consumer, has repeatedly voiced its opposition to unilateral sanctions such as those imposed by the United States. It says any measures should be multilateral and agreed through the United Nations.

Still, China's imports have fallen in recent months as Iranian tankers struggled to ship even the reduced volumes requested by importing countries. Earlier this year, China slashed imports by as much as half as the country wrangled over annual contract terms with Tehran.

China's imports from Iran are down 22 percent on the year to 426,000 bpd in January-October, the months for which official data is available.

South Korea has reduced purchases 39 percent to 148,000 bpd and Japan 41 percent to 188,000 bpd over the same period. In contrast, India has raised imports to 328,000 bpd, up 7 percent.

Go to Top

Photo Gallery
India's Sanjita Khumukcham completes a lift during the 48-kg women's weightlifting event...

India's Sanjita Khumukcham completes a lift during the 48-kg women's weightlifting event...

Sachin Tendulkar speaks at the launch of the campaign “Shuddh Paani, Swastha Bharat” to curb...

Sachin Tendulkar speaks at the launch of the campaign “Shuddh Paani, Swastha Bharat” to curb...

Kajol with her mother actress Tanuja at a seminar on breast cancer in Pune...

Kajol with her mother actress Tanuja at a seminar on breast cancer in Pune...

Hironori Kanayama, President & CEO 0f Honda Cars India Ltd. and Yoshiyuki Matsumoto...

Hironori Kanayama, President & CEO 0f Honda Cars India Ltd. and Yoshiyuki Matsumoto...

School students wades through a flooded street after heavy rains in Ahmedabad...

School students wades through a flooded street after heavy rains in Ahmedabad...

Aishwarya Rai Bachchan at a promotional event in Glasgow on Wednesday...

Aishwarya Rai Bachchan at a promotional event in Glasgow on Wednesday...

Monsoon clouds over Taj Mahal in Agra...

Monsoon clouds over Taj Mahal in Agra...

A over view of fireworks that gallored the sky at Celtic Park during the opening ceremony...

A over view of fireworks that gallored the sky at Celtic Park during the opening ceremony...

A  man rows his boat on a river in Buthidaung...

A man rows his boat on a river in Buthidaung...

A worker sorts coffee berries at a factory in Kienjege, Nairobi...

A worker sorts coffee berries at a factory in Kienjege, Nairobi...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523