Exclusive: U.S. likely to extend Iran sanction waivers-sources

Fri Dec 7, 2012 2:27am EST
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By Timothy Gardner

WASHINGTON (Reuters) - The United States is likely to exempt India, South Korea, Turkey and others from Iranian financial sanctions for another six months on Friday as a reward for reducing crude purchases from the Islamic republic, two U.S. government sources said.

Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.

The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.

The sanctions have sharply curtailed the market for Iranian crude, with Asian buyers and Turkey the only customers this month, according to shipping sources. EU sanctions included a ban on members from buying Iranian crude.

The International Energy Agency (IEA) estimates that Iranian oil exports dipped below 1 million barrels per day (bpd) over the summer as Western sanctions on Tehran tightened.

According to official Iranian government data available through the Joint Oil Data Initiative (JODI), Iran exported an average of just over 2 million bpd in 2011.

On June 11, a number of countries received their first round of reprieves from U.S. sanctions that President Barack Obama signed into law a year ago. The waivers are issued by the State Department.

Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases are reduced.   Continued...

A general view of the Neka oil terminal 300 Kms North east of Tehran April 29, 2004. REUTERS/Morteza Nikoubazl