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Iran feels the heat as U.S. scraps oil sanction waivers

Iran feels the heat as U.S. scraps oil sanction waivers

"This decision is meant to bring Iran's oil exports to zero, denying the regime its principal source of revenue", the White House said in a statement.

The Trump administration will partner with Iran's regional rivals Saudi Arabia and the United Arab Emirates to offset the drop in Iranian supplies, the White House said.

Brent for June settlement climbed $2.49 to $74.46 a barrel at 12:20 p.m.

An Iraqi government official said Baghdad was ready to boost oil exports by 250,000 barrels a day, to compensate for any shortfalls, once U.S. sanctions waivers for Iranian oil end.

President Trump is looking to drive Iran's oil exports to zero by ending the exemptions to the sanctions which were granted to eight countries which buy Iranian oil.

President Trump is touting his administration's move to stop granting sanction waivers to countries still making oil deals with Iran. "We welcome the support of our friends and allies for this effort", Sanders said.

On April 17, Frank Fannon, U.S. Assistant Secretary of State for Energy Resources, repeated the administration's position that "our goal is to get to zero Iranian exports as quickly as possible".

The others - Greece, Italy, Japan, South Korea and Taiwan - have already heavily reduced their purchases from Iran.

Kerry responded to the decision by claiming that it "weakens our security, breaks America's word, isolates us from our European allies, puts Israel at greater risk, empowers Iran's hardliners, and reduces our global leverage to address Tehran's misbehavior".

Oil-explorer stocks also benefited, with Pompeo noting that surging American production will help replace Iranian barrels.

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The decision is the latest in a series of actions by the administration to crack down on Iran. "In the event of any threats, we will not have the slightest hesitation to protect and defend Iran's waterway".

The waivers move, granted by Trump in November, shocked global oil markets and created a supply overhang that the OPEC+ group of producers is now working to eliminate. A Turkish official reportedly told a news conference last week, for example, that his country "expects" the Trump administration to grant it a new waiver.

In a statement carried by the official IRNA news agency on Monday, the Foreign Ministry said: "Regarding the illegal status of the sanctions, the Islamic Republic of Iran basically has not seen and does not see any worth and validity for the waivers". Geng didn't elaborate on how China would respond.

"As of May 2, the State Department will no longer grant sanctions waivers to any country that is now importing Iranian crude or condensate", the Washington Post's Josh Rogin reported on Sunday.

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The government, however, declined to comment officially.

Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia.

President Donald Trump restored crippling sanctions on Iran and its vital oil industry a year ago after withdrawing the United States from the 2015 nuclear accord with world powers. He said the link between oil prices and the US economy has diminished as American oil production has increased.

Dong Xiucheng, director of energy policy research at Beijing's University of International Business and Economics, said "Chinese companies may reduce imports from Iran to show some level of compliances" but added "it is impossible for China to cut off Iranian oil completely, simply because it does not conform to China's long-term diplomatic policy". The person described that not as a waiver but more as a brief grace period. The waivers were set to expire next month.

"China has already indicated its opposition to the United States implementation of unilateral sanctions, so it is probably unlikely to see Iranian exports to fall to zero", said Giovanni Staunovo, an analyst at UBS.