US throttles Iranian oil flows to top buyers who vowed resistance

Iran will keep selling oil in spite of an expected resumption of US sanctions on the country's crude shipments, said Rouhani

The world’s top oil buyers are discovering that US sanctions on Iran will  squeeze their trade flows whether they  agree with America or not.

It was only about three months ago that  India’s Foreign Minister Sushma Swaraj, said that the country  won’t adhere to unilateral restrictions and  will continue buying Iranian crude. China  also made similar comments and was said  to have rejected an American request to cut  imports. Japan and South Korea have held  talks with the US aimed at securing  exemptions.

Yet for all the pushback and negotiations, an  emerging pattern shows US sanctions are  succeeding in throttling Iran’s sales to its  customers even before the measures take  effect in early November. While the US  initially wanted a complete halt in  purchases, traders are now concerned that  even a revised aim for only cuts would take  out enough supply to create a market deficit  — which other producers may struggle to fill.

“All of Iran’s oil customers are affected by  increasing US pressure to halt purchases,  even as they request for concessions to  cope with the consequences,” said Den  Syahril, a senior analyst at industry  consultant FGE. “We expect India and  especially China to maintain some degree of  imports, while buyers in Japan and Korea  who’ve cut imports considerably will  continue to aggressively seek waivers up till  the last minute.”

Will exert every effort to export oil: Rouhani 

Iran will keep selling oil in spite of an expected resumption of US sanctions on the country’s crude shipments, President Hassan Rouhani said.  The Islamic Republic is “facing an economic and psychological war, and oil, gas and petrochemicals are in the front line,” Rouhani said in a speech on Tuesday.

“We will make every effort to continue to produce and export oil, though there may be some ups and downs.” Iran’s crude output declined 6.4 per cent to 3.5 million barrels a day last month, the biggest drop among its peers in the OPEC, data showed.

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