India
Continues Cut in Iran Oil to Qualify for Exemption to US Sanctions
Oil-importing nations are continuing to cut back
their purchases from Iran, making it likely those countries will earn a new
round of exceptions from U.S. sanctions next week.
Two U.S. officials said on 29 November that
publicly available oil trading figures indicate that the seven nations whose
waivers are up for renewal on Dec. 8 have continued to significantly reduce
their Iranian oil imports over the last 180 days.
The Obama administration certified six months ago
that India, Turkey, South Korea, Sri Lanka,
Taiwan, Malaysia and South Africa had “significantly reduced” their purchases
of Iranian oil, in keeping with a December 2011 law that imposes U.S. sanctions
on foreign financial institutions that facilitate oil transactions with Iran.
On Dec. 8, those 180-day exceptions from sanctions
will expire, and the administration must certify whether the countries have
continued to reduce their purchases and qualify for a renewal.
Malaysia and South Africa have stopped importing
oil from Iran, and the other five nations appear to have continued to reduce
their purchases, putting them on track to earn a second round of exceptions
from sanctions if all the figures are certified, the officials said. The
officials spoke on condition of anonymity since the final decision by Secretary
of StateHillary Clinton
hasn’t been made and relies on data other than
publicly available trade figures.
All
20 nations that imported Iranian oil last year, including 10 European Union
countries, China and Japan, were able to show a significant reduction in their
imports earlier this year, allowing them to continue buying smaller quantities
of Iranian oil without facing sanctions. The EU imposed an embargo on all oil purchases from Iran that took effect July 1.
The December 2011 law cuts off from the U.S. banking
system any foreign financial institution that handles oil trade with Iran if
their home country hasn’t earned an exception from sanctions by reducing its
oil imports.
The International Energy Agency said Iranian oil exports dipped below 1 million
barrels a day in July after the European Union banned purchases of the
country’s crude. The Paris-based IEA estimates that Iranian exports rebounded
to 1.3 million barrels in October.
Iran’s oil output, formerly the second-largest in
OPEC, has dropped to fifth among the 12 members of the Organization of
Petroleum Exporting Countries as a result of economic sanctions imposed by the
U.S. and its allies.
In the first half of 2011, China was the biggest
importer of Iranian crude, followed by the European Union, Japan, India and
South Korea, according to the U.S. Department of Energy.
Oil capped its first monthly increase since August on
signals that economic expansion in the U.S. is accelerating. Crude oil for
January delivery advanced 84 cents to $88.91 a barrel on 29 November on the New
York Mercantile Exchange, the highest settlement since Nov. 19. Futures
increased 0.7 percent this week and gained 3.1 percent this month. Prices are down 10 percent
this year.