Donald Trump says firms doing business in Iran to be barred from US

Firms doing business with Iran will be barred from the United States, President Donald Trump said on Tuesday, as new US sanctions took effect in spite of pleas from Washington's allies.

Iran dismissed a last-minute offer from the Trump administration for talks, saying it could not negotiate while Washington had reneged on a 2015 deal to lift sanctions in return for curbs on Iran's nuclear programme.

Trump decided this year to pull out of the agreement, ignoring pleas from the other world powers that had co-sponsored the deal, including Washington’s main European allies Britain, France and Germany, as well as Russia and China.

European countries, hoping to persuade Tehran to continue to respect the deal, have promised to try to lessen the blow of sanctions and to urge their firms not to pull out. But that has proven difficult: European companies have quit Iran, arguing that they cannot risk their US business.

“These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!” Trump tweeted on Tuesday. White House national security adviser John Bolton said on Monday Iran’s only chance of escaping sanctions would be to take up an offer to negotiate with Trump for a tougher deal.

“If the ayatollahs want to get out from under the squeeze, they should come and sit down. The pressure will not relent while the negotiations go on,” Bolton told Fox News. 

How oil buyers are positioning for US sanctions
 

In three months’ time, US sanctions on Iran are due to enter into force that could drive the Persian Gulf nation’s exports down toward zero and upend the global oil market. A summary of the major Iranian oil importers’ reactions and their positions: 
 

China
 

Observed flows (Jan-June): 675,000 bpd
Share of observed exports (Jan-June): 26%
Share of imports  (Dec-May): 7%
Government:  Beijing has agreed to not ramp up purchases from Iran, but has rejected a US request to cut them. It continues to pay for Iranian crude imports in yuan
Companies: Nothing  

India
 

Observed flows (Jan-June):  597,000 bpd
Share of observed exports (Jan-June): 23%
Share of imports  (Nov-April): 11%
Government:  Foreign Minister Sushma Swaraj at first stated that India only complied with UN-mandated sanctions. Then, in June, the oil ministry held a meeting with refiners and asked them to prepare for a scenario of ‘drastic or zero’ imports of Iranian oil from November
Companies: IOC and Bharat Petroleum Corp. kept buying Iranian crude in July and have started contracting oil from there for August deliveries. Hindustan Petroleum is unlikely to buy any more Iranian oil until India gets a waiver from the US


South Korea

Observed flows (Jan-June):  286,000 bpd
Share of observed exports (Jan-June):  11%
Share of imports (Dec-May): 10%
Government: South Korea is waiting for an official response from the US on whether its refiners can continue importing Iranian crude and condensate during the 180-day wind-down period. It had put some imports on hold in June
Companies: Refiners are substituting condensate from Iran with a processed fuel known as naphtha from elsewhere


Japan

Observed flows (Jan-June):  125,000
Share of observed exports (Jan.-June):  5%
Share of imports (Dec-May): 4%
Government: Japan has sought a waiver from the US measures. Japan’s Finance Minister Taro Aso in June asked the US to give more clarity and reassurance to Japanese firms
Companies: The refining industry wants the government to “tenaciously hold talks” with the US to get a waiver on America’s renewed sanctions on Iran. Fuji Oil is considering halting crude imports from Iran



European Union

Observed flows (Jan-June):  516,000 bpd
Share of observed exports (Jan-June):  20%
Share of imports (Dec-May): 5%
Officials: The bloc is determined to preserve the Iran nuclear deal and considers that the consequences of abandoning it could be “catastrophic”
Companies: Austria’s OMV AG has suspended investment projects in Iran, but still has made no decision on imports. Swiss lender Banque de Commerce et de Placements SA told customers that it would stop financing Iranian oil cargoes by June 30. Vitol Group said in May it will be near impossible to avoid the sanctions



Turkey

Observed flows (Jan-June):  176,000 bpd
Share of observed exports (Jan-June): 7%
Share of imports (Dec-May): 49%
Government: Turkey will not take part in US sanctions against Iran
Companies: Nothing

Note: Average export data January–June 2018.   bpd: (barrels per day)
Source: Bloomberg tanker tracking and JODI