Washington: The US added seven economies to the list of nations qualifying for an exemption from financial sanctions on Iranian oil imports, penalties intended to pressure Iran’s leaders to abandon any nuclear weapons ambitions.
India, South Korea, Turkey, South Africa, Malaysia, Sri Lanka and Taiwan will not be penalized by the US for continuing to import oil from Iran over the next six months because they have proven they have all significantly reduced the volume of the oil they buy from Iran, secretary of state Hillary Clinton said in a statement on Monday.
Oil prices fell for a fourth day in New York on speculation that the US exemptions will limit the risk of global supply disruptions. Crude for July delivery dropped as much as 2% to $81.07 a barrel in electronic trading on the New York Mercantile Exchange, extending its loss this year to 17%.
China, the leading importer of Iranian crude in the first half of last year, and Singapore were not granted exemptions. US officials familiar with the decision said talks are continuing, and they may win exemptions before the 28 June deadline for the sanctions to take effect. China imports crude from Iran based on its economic needs and has told the US that its actions are completely fair and transparent, foreign ministry spokesman Liu Weimin told a briefing on Tuesday.
“China didn’t breach UN security council resolutions or cause harm to the international community or other countries,” Liu said. “We believe China’s crude oil trade is completely lawful and reasonable.”
Singapore is engaged in “constructive discussions” with the US and has asked its financial institutions to more closely monitor transactions involving Iran, according to a statement from the ministry of foreign affairs. While Singapore enforces only security council sanctions, “companies and financial institutions know they must consider the impact of unilateral sanctions on their commercial decisions,” it said.
Singapore imported 1% of its crude from Iran in the last two years and none in May, according to the statement.
India and South Korea were the third and fourth largest buyers of Iranian oil in the first half of last year, according to the US department of energy.
“By reducing Iran’s oil sales, we are sending a decisive message to Iran’s leaders: until they take concrete actions to satisfy the concerns of the international community, they will continue to face increasing isolation and pressure,” Clinton said.
Analysts say that whether China, the world’s largest energy consumer, ultimately reduces its purchases of Iranian oil may not make much difference in the oil revenue earned by the Persian Gulf state, since every other major buyer has substantially scaled back imports.
President Barack Obama’s administration hasn’t defined what constitutes a significant reduction, and three US officials said they were weighing a number of factors, including each nation’s energy needs and ability to switch to alternative sources. The officials spoke on condition of anonymity to discuss internal deliberations.
The sanctions are part of a coordinated campaign by the US and EU to ratchet up economic pressure on Iran over its disputed nuclear programme.
US officials pointed on Monday to figures from the International Energy Agency (IEA) in Paris showing a decline in Iran’s oil exports as proof that the sanctions campaign is working. The IEA reported that Iran exported 2.5 million barrels of crude a day last year; the independent agency estimates that figure has dropped to between 1.2 million and 1.8 million barrels per day, US officials said.