US President Donald Trump has defended his decision to spare India and seven other major importers of Iranian oil from immediate penalties, saying it was done to keep the global oil prices down and avoid causing a "shock" to the market.
The US on Monday reimposed all penalties that had been lifted as part of the 2015 Iranian nuclear deal as the Trump administration added nearly 700 targets, including 50 Iranian financial institutions, to a sanctions list.
It marked an intensifying effort to strangle Iran's economy to pressure the regime to change its ways, especially to force Tehran to stop the ballistic missiles programme and abandon its nuclear ambitions if wants to seek a path to sanctions relief.
Secretary of State Mike Pompeo said that India, China, Italy, Greece, Japan, South Korea, Taiwan and Turkey were temporarily allowed to continue buying Iranian oil as they showed "significant reduction" in oil purchase from the world's fifth-biggest producer.
"We have the toughest sanctions ever imposed. But on oil, we want to go a little bit slow because I don't want to drive the oil prices in the world up," Trump told reporters at Joint Base Andrews outside Washington on Monday before leaving on a campaign trail for the mid-term polls being held on Tuesday.
When asked about his decision to give temporary exemptions to eight economies from the ban on Iranian oil imports, Trump said, "I'm not looking to be a great hero and bring it down to zero immediately. I could get the Iran oil down to zero immediately, but it would cause a shock to the market. I don't want to lift oil prices."
"If you notice, oil prices are going down very substantially, despite the fact that already half of their capacity is gone. But I don't want to do that," he said.
"I saw some people saying, 'Oh, why aren't you tougher on that?' Well, the sanctions are very tough and I don't want to lift the oil prices worldwide by clamping down 100 per cent. It will be gradual," the US president said.
India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports.
Iran is its third-largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of total needs. Currently, India pays its third largest oil supplier in euros using European banking channels.
Oil prices initially soared on fears that the Iran sanctions would knock the world's fifth-biggest producer offline. However, fears of a supply shortage have been eased by the Trump administration's temporary waivers for China and India and stronger oil output from Saudi Arabia and the United States, CNN reported.
On Monday, Pompeo said over 20 importing nations have zeroed out their imports of crude oil already, taking more than 1 million barrels of crude per day off the market. The Iranian regime to date since May has lost over USD 2.5 billion in oil revenue, he said.
Additionally, 100 per cent of the revenue Iran receives from the sale of oil will be held in foreign accounts. Iran can only use this money for humanitarian trade or bilateral non-sanctioned goods, the Secretary of State asserted.
House Democratic Whip Steny H Hoyer said, "Rather than achieving its stated goal of eliminating Iran's oil exports altogether, the administration has issued 'exemptions' for major Iranian oil importers, allowing Iran to earn billions of dollars from oil sale."
Hoyer alleged that by "tearing" up the Joint Comprehensive Plan of Action (JCPOA), the Trump administration has isolated the United States and undermined the multilateral efforts to curb Iran's "dangerous" behaviour.
"Further, its negotiators failed to secure any restrictions on Iran's other destabilising activities, including the regime's ballistic missile development and proliferation," he told a New York audience.
Democratic Senator Tom Udall, who is also a member of the Senate Foreign Relations Committee, said, "Led by people like John Bolton, who believe that we should bomb Iran, I fear the Trump administration is marching toward another catastrophic war in the Middle East."
But Senator Bob Corker, the chairman of the Senate Foreign Relations Committee, said the Trump administration deserves credit for re-imposing sanctions and dramatically reducing Iran's oil exports and revenues.
Imposing maximal economic pressure on Iran is vital for getting Tehran back to the table, he said.
In May, President Trump had pulled the US out of the 2015 landmark JCPOA terming it as disastrous". Under the Obama-era deal, involving five permanent members of the UN Security Council and Germany, Iran had agreed to stop its nuclear programme in exchange for relief from economic sanctions.
After the US' withdrawal from the deal, Trump signed fresh sanctions against Iran, which claims its nuclear programme is peaceful and for civilian purpose.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)