The United States on announced it will not extend sanctions exemptions to countries importing oil from Iran when they expire in early May. The White House said waivers for China, India, Japan, South Korea and Turkey would expire in May, after which they could face US sanctions themselves. This decision is intended to bring Iran’s oil exports to zero, denying the government its main source of revenue.
Iran insisted the sanctions were illegal and that it had attached “no value or credibility” to the waivers. Mr Trump reinstated the sanctions last year after abandoning a landmark 2015 nuclear deal between Iran and six world powers. “The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies and security in the Middle East,”
India has warm ties with Washington despite disagreeing with the US view that Iran is a threat, but the decision may exacerbate tensions with China and Turkey. Greece, Italy, Japan, South Korea and Taiwan have already substantially reduced their purchases from Iran.
Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil. Iran is being given VERY BAD advice by @JohnKerry and people who helped him lead the U.S. into the very bad Iran Nuclear Deal. Big violation of Logan Act?
— Donald J. Trump (@realDonaldTrump) April 22, 2019
What has been the impact on oil prices?
The price of global benchmark Brent crude rose by 3.33% to $74.37 a barrel in trading on Monday – the highest since 1 November. US oil – known as West Texas Intermediate – was meanwhile up 2.90% at $65.93. In recent months, the price of oil has risen due to an agreement between the Organization of the Petroleum Exporting Countries (Opec) cartel and its allies, including Russia, to cut their output by 1.2 million bpd.