Sputnik - The US government fully reinstates energy and banking sanctions against Tehran on Monday, however, eight countries will receive temporary sanctions waivers due to their significantly reduced import of oil from Iran.




A South Korean government official already announced that Seoul has been allowed to�continue transactions with�Iran amid�the sanctions, Reuters reported. The official also said that South Korea got an exemption on�Iranian oil imports.

In May, US President Donald Trump announced that Washington would be withdrawing from�the Iran nuclear deal, formally known as�the Joint Comprehensive Plan of�Action (JCPOA). In addition, Trump said the United States would reinstate sanctions on�Iran that were previously lifted under�the JCPOA, with�some of�the restrictions having been reimposed on�August 6 and the main ones slated for�November 5. This unilateral move has been opposed by�other signatories to�the JCPOA, with�the European Union, Russia and China looking for�ways to�continue doing business with�Iran.

US Secretary of�State Mike Pompeo announced on�Friday the United States would grant temporary waivers to�eight countries to�allow them to�continue importing oil from�Iran after�November 5. He said a list of�the jurisdictions receiving the waivers would be released on�Monday. Pompeo pointed out�that six of�the countries agreed to�significantly reduce imports of�Iranian oil, while two others plan to�halt their imports entirely.

US Special Representative for�Iran Brian Hook said Friday the Iran sanctions waivers, or significant reduction exemptions (SRE), would last for�six months, adding that Washington did not plan to�grant any additional SREs after�the 180-day period.

MAIN TARGET

Washington is seeking to�cut Tehran�s lifeline � its energy sector � by�banning the purchase of�petroleum from�Iran, as�well as�transactions by�foreign financial institutions with�the Central Bank of�Iran. Moreover, the November 5 package of�restrictive measures includes sanctions on�Iran�s port operators, shipping and shipbuilding sectors.

The United States told foreign companies to�phase out�their operations in�Iran before�the 180-day wind-down period ends on�November 4. In response, France�s Total was the first to�announce the company had left Iran in�mid-July because it received no concessions from�the US government regarding sanctions on�the Islamic republic. The oil and gas company lost $40 million after�walking out�of the expansion project for�Phase 11 of�South Pars Gas Field in�the Persian Gulf, but�hoped it could return to�Iran in�the future.

According to�the US Energy Information Administration (EIA), France has imported no crude oil or condensate from�Iran since�June while imports to�Italy and Spain in�September were lower than�average for�the first half of�the year by�27,000 barrels per day (b/d) and 15,000 b/d respectively.

According to�the Organization of�the Petroleum Exporting Countries (OPEC), Tehran�s oil production dropped by�150,000 barrels per day to�3.447 million barrels per day (mb/d) in�September. Meanwhile, the country�s production quota under�OPEC-non-OPEC Vienna deal stands at�3.8 mb/d.

Pompeo said on�Friday that according to�the US assessments, Iran�s exports of�crude oil already declined by�1 million barrels per day even before�the re-imposition of�US energy-related sanctions against�Tehran.

Although Iran�s OPEC Governor Hossein Kazempour Ardebili assured press in�September that Tehran would continue to�export oil despite�the US attempts to�hamper the country's trade with�other countries by�reimposing sanctions, Iran's Oil Minister Bijan Zanganeh has been a no-show at�several major events during�the past�months, skipping the OPEC�s ministerial monitoring committee in�September in�Algiers and the Russian Energy Week in�October in�Moscow.

EU TRIES TO SAVE TIES WITH IRAN

Following the US withdrawal from�the JCPOA, Brussels has shown its interest in�maintaining relationship with�Tehran despite�US sanctions. Consequently, the European Union updated its Blocking Statute to�shield EU companies wishing to�continue doing business with�Iran from�US penalties. The amended act entered into�force on�August 7 and would invalidate Washington's judicial decisions and administrative actions within�the framework of�anti-Iran sanctions on�the territory of�Europe.

Furthermore, German Foreign Minister Heiko Maas called on�EU member states to�come up�with an alternative to�the US-controlled SWIFT payment system in�order to�better respond to�the sanctions policy pursued by�the United States against�Russia, China, Turkey and other important economic partners of�the European Union. SWIFT is used by�thousands of�banks and other financial institutions around�the world to�securely exchange messages regarding transactions.

As a result, in�September the European Union and five other remaining signatories�� China, Russia, the United Kingdom, France and Germany�� to�the Iran nuclear deal announced the decision to�establish a Special Purpose Vehicle (SPV) that would facilitate legitimate transactions with�Iran, including transitions in�US dollars. The new payment system will comply with�international standards and will be open to�other partners in�the world.

Although the new protective measure announced by�EU foreign policy chief Federica Mogherini was expected to�come into�effect before�November, the SVP is still under�discussion. According to�Tehran, talks between�Iran and the European Union on�the barter mechanism are progressing and "on the right path."

US Treasury Secretary Steven Mnuchin said on�Friday the SWIFT payment system would be subject to�US sanctions if it provides financial services to�financial institutions designated under�Iranian sanctions.

Finance ministers of�France, Germany and the United Kingdom said in�a joint statement on�Friday they would hold a meeting soon to�work out�a mechanism for�securing transactions with�Tehran, as�the European Union remains committed to�protecting the interests of�European companies trading with�Iran, despite�the US sanctions.

KEY IRANIAN OIL IMPORTERS HOPE FOR WAIVERS

Despite the looming sanctions, top Iranian oil importers, which include China, India, and South Korea among�others, have been reluctant to�stop purchases. South Korea, for�example, said firms would not cut ties with�Iran, although the restrictions would have to�be taken into�account.

Meanwhile, India has been at�lengthy talks with�the United States to�be granted permission to�continue importing at�least some volume of�Iranian oil. New Delhi, Tehran�s second-largest buyer, imported 9.8 million tonnes of�oil from�Iran in�the 2017-2018 fiscal year. According to�media reports, Washington may allow New Delhi to�import around�1.25 million tonnes of�oil per month until�March 2019, which would mark a significant reduction compared to�India�s initial plans.

The aforementioned option became possible after�Pompeo said in�early October that Washington would consider waivers for�the importers of�Iranian oil, including India, to�give them time to�adjust to�the new conditions. However, the United States still expected all countries to�eventually reduce their oil imports from�Iran to�zero.

At the same time, China, who imported around�700,000 barrel per day in�the first quarter of�2018, is currently in�the middle of�a trade war with�the United States and it is highly unlikely the country would be granted any exemptions. Although Beijing insisted it would not limit its Iranian crude imports to�comply with�the US sanctions, several media reported in�late October that Sinopec Group and China National Petroleum Corp (CNPC), the country�s top two state-owned refineries, both suspended placing new orders for�crude oil from�Iran.

Turkish Energy and Natural Resources Minister Fatih Donmez announced on�Friday that Turkey was one of�the eight countries that the United States would exempt from�sanctions for�importing Iranian oil. The US Treasury Department also said on�Friday its sanctions against�Tehran would exempt pipeline and other energy projects that transport natural gas from�Azerbaijan to�Turkey and Europe.

According to�the JCPOA, Tehran vowed not to�produce weapons-grade plutonium at�its Arak facility�� which it is obliged to�reconfigure�� and not to�build new heavy-water reactors for�15 years to�curb its nuclear program. Tehran is also committed to�keeping its stock of�heavy water, used to�cool the Arak nuclear reactor, at�no more than�130 metric tonnes. Despite Washington�s claims, the International Atomic Energy Agency (IAEA) has repeatedly stated that Iran adheres to�its nuclear-related commitments.