Brief relief as US says India can buy Iran oil

The US has agreed to temporarily allow eight countries to continue buying Iranian oil after it reimposes crippling sanctions on Tehran on November 5, Secretary of State Mike Pompeo said on Friday, citing “significant reductions” in imports of oil from the Persian Gulf nation.

India is one of the countries expected to get the exemptions. But senior administration officials refused to spell out the names on Friday. The list of these exemptions would be announced on Monday, Pompeo told reporters during a conference call on Iranian sanctions, with US Treasury Secretary Steven Mnuchin.

While the US had previously wanted countries including India to completely halt oil purchases from Iran by November 4 when its full sanctions against Tehran come into force, it seems to have relented considering the havoc the move to completely take out Iranian supplies from the market would have had on prices. Pompeo said that countries like India, if it gets the exemption, would be asked to bring down their oil imports from Iran to zero in six months’ time. Negotiations are still ongoing, he said explaining the reasons for not revealing the names of the countries that are expected to get exemptions from the US from this latest and so far the toughest American sanctions on Iran.

“We expect to issue some temporary allotments to eight jurisdictions, but only because they have demonstrated significant reductions in their crude oil and cooperation on many other fronts and have made important moves towards getting to zero crude oil importation. These negotiations are still ongoing. Two of the jurisdictions will completely end imports as part of their agreements. The other six will import at greatly reduced levels,” Pompeo said.

These economic sanctions are just a part of the US government’s total effort to change the behaviour of the Iranian regime, he said. “On November 5, the US will reimpose sanctions that were lifted as part of the nuclear deal on Iran’s energy, shipbuilding, shipping and banking sectors. These sanctions hit at core areas of Iran’s economy. They are necessary to spur changes we seek on the part of the regime,” he said.

The rupee was the second-best performer in Asia, rising the most in over five years on Friday, on lower global oil prices and as China and the US expressed optimism about resolving the trade war. A decline in oil prices and the rally in the currency also boosted bonds, which rose to their highest in nearly two months. The rupee rose as high as 72.4350 vs the dollar, gaining 1.44 per cent during trade, the most since September 19, 2013. The currency closed just off the day’s high at 72.44 versus 73.4750