US considering 'significant reduction exceptions' for nations to cut oil purchase from Iran

The US has told various countries, including India, to cut oil imports from the Persian Gulf nation to "zero" by November 6 or face sanctions.

India, which is the second biggest purchaser of Iranian oil after China, is willing to restrict its monthly purchase to 1.25 million tonnes or 15 million tonnes in a year (300,000 barrels per day), down from 22.6 million tonnes (452,000 barrels per day) bought in 2017-18 financial year, sources in New Delhi said.

In May, US President Donald Trump pulled the US out of the 2015 landmark nuclear the Joint Comprehensive Plan of Action (JCPOA) terming it as disastrous". Under the Obama-era deal, involving five permanent members of the United Nations Security Council and Germany, Iran agreed to stop its nuclear programme in exchange of relief from economic sanctions.

Moments after coming out the deal, Trump singed fresh sanctions against Iran and warned countries against any cooperation with Tehran on its controversial nuclear weapons programme.

"The United States is in the midst of an internal process to consider significant reduction exceptions for individual countries, but that is only on a case-by-case basis," State Department's Deputy Spokesperson Robert Paladino told reporters.

He was responding to questions on the news reports from South Korea and India that they are getting waiver from the US on the punitive Iranian sanctions.

Paladino said that the US will continue to discuss America's Iran policy with its counterparts across the world.

"We will continue to discuss our Iran policy with our counterparts around the world and the implications of our re-imposition of sanctions previously lifted or waivered under the JCPOA," he said.

He said that the US will continue to exert pressure on the the Iranian regime

"We ask that it to modify its behaviour, and the Secretary (of State) has been clear frequently on what we expect from the regime and human rights are certainly an important aspect of that," he said.

"This is something that we're going to ask others to help us with and we're going to maintain this pressure on this regime. There is much more that it's going to need to do," he said.

Earlier, Secretary of State Mike Pompeo said that the punitive Iranian sanctions would return on Monday, November 5.

"On Monday, in front of us, all of the sanctions that had been relieved by the Obama administration will return. And that's important, because Iran remains – after a couple years plus of the JCPOA, they still remain the world's largest state sponsor of terror," he said.

"They continue to produce better and better missiles that can threaten the Middle East and eventually potentially Europe as well.

"These are not the kinds of behaviours of a normal nation," Pompeo said.

Pompeo said that he is convinced these sanctions are going to have an enormous impact on the Iranian leadership.

"Most European countries – in spite of the UK, Germany, and France having determined that they want to stay inside the JCPOA, in spite of that, nearly every significant European company has already fled Iran. So while their governments say it's okay to do business there, they know," he said.

Pompeo said that President Donald Trump was very clear about the policy against Iran.

"They know the President's words, which are that if you choose to do business with Iran, that is your choice, but if you do you won't do business with America as well. You have to choose between us.

"And the history, since May, now almost six months on, is that most European companies are choosing – not surprisingly – to do business with America. So I'm very confident these sanctions will have their intended effect," said the top American diplomat.

Sources in New Delhi said that India is close to a deal with the US that will allow it to continue buying crude oil from Iran without attracting any sanction after it agreed to cut imports and escrow payments.

India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third-largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of total needs.

Currently, India pays its third largest oil supplier in euros using European banking channels. These channels would get blocked from November.

Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes -- Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.