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As U.S. oil sanctions against Iran start, Washington grants waivers to major buyers

Reuters  |  SEOUL/TOKYO 

By and Osamu Tsukimori

SEOUL/TOKYO (Reuters) - The re-introduced sanctions against Iranian exports on Monday, although it also gave some of its closest allies exemptions that will allow Tehran's biggest customers, mostly in Asia, to still buy crude for now.

restored measures lifted under a 2015 nuclear deal negotiated with by the administration of Barack Obama, adding as well 300 new designations including Iran's oil, shipping, insurance and sectors, aiming to cripple Iran's main export revenues from the petroleum industry.

Despite this, will continue to sell some as the has granted sanctions waivers to some of its closest allies in

said on Friday it will temporarily allow eight importers to keep buying Iranian It did not name who had received the exemptions or provide any further details.

said on Monday it has been granted a waiver to at least temporarily continue to import condensate from and also still continue financial transactions with the Middle Eastern country. The super-light is a critical feedstock for South Korea's large petrochemical industry.

South Korea, a U.S. ally and one of Asia's biggest buyers of Iranian oil, asked for "maximum flexibility" last week, after some of its construction firms cancelled energy-related contracts in the Islamic republic due to financing difficulties.

Under U.S. law, exceptions to the renewed sanctions can be granted for up to 180 days.

said on Monday it was in close communication with the on the measures, although declined to provide any details.

has asked that sanctions should not have an adverse impact on the activities of Japanese companies, Suga said.

Other Asian buyers of Iranian oil, including its two biggest, and India, are also seeking waivers.

Chinese said on Monday that expressed regret at the U.S. decision to re-impose sanctions on Iran and reiterated its objections to unilateral sanctions, but she would not directly say if had or had not been granted an exemption.

"China and Iran carrying out normal cooperation under the framework of international law is lawful and reasonable, and should be respected and protected," Hua told a daily briefing in

Turkish said on Saturday that has received indications that it will be among the countries to be granted a waiver from U.S. sanctions against Iran, but it is still awaiting clarification on Monday.

Some European countries may also receive exemptions.

Iran's biggest over the past years have been China, India, South Korea, Turkey, Italy, the and also occasionally buys cargoes of Iranian crude, but is not a major buyer.

Iran itself said it would simply ignore the sanctions.

With major buyers receiving exemptions, markets did not react strongly to the start of the sanctions, with benchmark Brent prices trading around $72.60 per barrel at 0655 GMT, down 0.3 percent from their previous close and more than 15 percent below their most recent peak in early October.

"Oil fell as U.S. sanctions on Iran proved to be less severe than previously anticipated," said Hussein Sayed, at futures brokerage

"Exempting eight countries from the U.S. sanctions means Iranian Oil will continue to flow and there's no longer risk of a supply shortage," he said.

have been preparing for the sanctions for months.

"Iranian exports and production had been declining steadily ... Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May," said of Emirates NBD

(Reporting By in SEOUL, Kaori Kaneko and in TOKYO, and Ben Blanchard in BEIJING; Writing by Henning Gloystein; Editing by Tom Hogue)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, November 05 2018. 14:10 IST