Energy & Power
08 Dec,2012 09:16 IST
US Extends Iran Sanction Waiver To China, India
Waivers, also known as "exceptions," granted to South Korea, South Africa, Turkey, Sri Lanka, Malaysia, Singapore and Taiwan
President Barack Obama's administration has now renewed waivers for all 20 of Iran's major oil buyers, after granting them to Japan and 10 European Union countries in September. F r i day's action was the second renewal for all 20 after Obama signed the sanctions into law a year ago.
The sanctions aim to choke funding to Iran's nuclear program, which the West suspects is enriching uranium to levels that could be used in weapons. Tehran says the program is for civilian purposes.
"The United States and the international community remain committed to maintaining pressure on the Iranian regime until it fully addresses concerns about its nuclear program," Secretary of State Hillary Clinton said in a statement.
Clinton also granted waivers, known as "exceptions," on Friday to South Korea, South Africa, Turkey, Sri Lanka, Malaysia, Singapore and Taiwan.
Under the sanctions law, banks in countries that buy oil from Iran can be cut off from the US financial system unless their purchases decline.
Iran's oil exports have fallen 50 percent this year in the face of US sanctions and a EU embargo that began on July 1. That has cost Iran up to $5 billion a month and led to a plunge in Iran's currency, the rial, David Cohen, undersecretary for terrorism and financial intelligence at the US Treasury Department said this week.
But some lawmakers in the US Congress want tougher enforcement.
"The administration continues to let transgressions slide and enable the profits of (Iran's) energy sector to fuel their nuclear ambitions," said Florida Republican Ileana Ros-Lehtinen, chairwoman of the House of Representatives' Foreign Affairs Committee, who was critical of the waivers.
Iran's Currency Reserves
How long Iran can function without exporting as much oil is unclear, as Tehran has tens of billions of dollars in currency reserves accumulated over decades as one of the world's largest oil suppliers.
In September and October, the latest months for which data were available, Iran's crude production fell by 1 million barrels per day, compared with the same time last year, according to the U.S. Energy Information Administration.
Clinton said Iran should take "concrete actions" to satisfy the international community through negotiations with the U.N. Security Council members plus Germany "or face increasing isolation and pressure."
China, which is Iran's top oil customer and a permanent member of the Security Council, has opposed unilateral sanctions such as those imposed by Washington.
But its oil imports from Iran are down 22 per cent on the year to 426,000 bpd from January to October. Early in the year, the imports were cut as China and Iran butted heads over a contract dispute. More recently, Iranian tankers have struggled to ship even reduced volumes requested by importers.
Top sanctions backers in Congress, Senators Robert Menendez, a New Jersey Democrat, and Mark Kirk, an Illinois Republican, have urged Obama to require oil importers to reduce purchases by 18 percent or more to qualify for the further waivers.
US officials from the State Department and other agencies have fanned out this year, visiting Iran's major buyers.
They have not asked countries to cut by specific percentages to get the waivers. Rather, they say, they had conversations with the buyers about alternative oil suppliers like Iraq and Saudi Arabia.
The talks have also taken into account seasonal factors like some countries needing more oil in winter for heating.
The US Senate last week resoundingly approved a third round of sanctions that if passed into law, would target loopholes including the flow of gold from Turkey to Iran in payment for natural gas exports.
Critics of the US sanctions say they will not rein in Iran's nuclear program unless they are accompanied by adequate diplomacy.