The United States is unlikely to entirely remove waivers for Iran sanctions it granted to eight large importers of the commodity in November, according to analysts, as quoted by Reuters.
The countries most likely to receive waiver extensions are also the countries most in need of the oil supply they receive from Tehran: China, India, Japan, South Korea, and Turkey. Italy, Taiwan, and Greece, which were granted waivers in November, are smaller importers of Iranian crude.
Earlier this week, Washington’s special representative for Iran, Brian Hook, said there were no plans to extend any waivers or grant more of them, the ultimate goal of the Trump administration remaining to bring Iranian crude oil exports down to zero. However, if analysts are to be believed, this is unrealistic.
“Other geopolitical priorities will moderate the administration’s desire to halt Iranian exports, particularly with Iran’s top two purchasers, China and India,” Eurasia Group analysts said, adding “The reductions will probably hit the Iranian economy hard especially because President Hassan Rouhani’s administration is planning its budget around unrealistically high expectations for oil revenue.”
Tanker-tracking company Kpler noted this week in an update on Iranian oil flows that the country has suffered a decline in export-bound oil shipments after the announcement by President Trump he was pulling the U.S. out of the Iran nuclear deal, with that decline becoming particularly sharp ahead of the November sanctions.
Iran is still exporting at rates of over 1 million bpd, despite the fact Japan and South Korea suspended all intake of Iranian crude—at least officially—before November. As of December, Kpler said, as much as 51 percent of Iranian oil cargos traveled off the radar, often leaving their final destination a secret by discharging their cargo to another ship.
What’s more, buyers are looking for and finding ways to circumvent the sanctions: India set up a mechanism using local banks and the local currency to pay for Iranian crude excluding dollars for the equation. China has used ways to avoid sanctions in its trade relations with Iran before and it has made clear it will use them again. It makes sense, then that Brian Hook said Washington will be looking to balance U.S. national security and economic interests when deciding how to proceed with the waivers.