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As U.S. starts oil sanctions against Iran, major buyers get waivers

Reuters  |  SEOUL/TOKYO 

By and Osamu Tsukimori

SEOUL/TOKYO (Reuters) - The reintroduced sanctions against Iranian on Monday while giving some of Washington's closest allies exemptions that allow Tehran's biggest customers, mostly in Asia, to keep buying crude for now.

has restored measures lifted under a 2015 nuclear deal negotiated with by the administration of

added 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 said on Friday it would temporarily allow eight importers to keep buying Iranian supplies.

It did not identify who had received the exemptions, which will last up to 180 days and have been granted on the basis that importers have already slashed purchases and will further reduce them in the future.

It was not clear yet what individual volumes or aggregate volume the waivers entail. During the previous wave of sanctions on in 2012 exemptions were given to China, India, Taiwan, Japan, and EU countries such as Italy, and for a total amount of over 1 million barrels per day.

said on Monday it had been granted a waiver to continue at least temporarily importing condensate from and running financial transactions with the Middle Eastern country. Condensate - a super-light - is a critical feedstock for South Korea's 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 Iran due to financing difficulties.

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

India's confirmed on Saturday that the country, Iran's top after China, had won a waiver from the U.S. sanctions after a 'forceful campaign' by

hopes to continue to buy about 1.25 million tonnes of oil a month until the end of the fiscal year to March 31, unchanged from November's level, a said.

is also seeking waivers, although it remained unclear on Monday what volumes, if any, it would be allowed to purchase.

The reiterated its objections to sanctions, but would not directly say whether had been granted an exemption.

Turkish said on Monday had been told it will receive a waiver but gave no detail.

Some European countries may also receive exemptions.

Iran's biggest in recent years have been China, India, South Korea, Turkey, Italy, the and

Click here to see a GRAPHIC on Iranian oil: 40 years of revolution, war, sanctions and bans.

FALLING EXPORTS

Iran said it would ignore the sanctions.

"It will be difficult for Iran to maximise exports when virtually all trade in oil is cleared in U.S. dollars, putting international oil companies, many national oil companies, traders and banks off limits," said Homayoun Falakshahi from the consultancy

Crude exports contribute one-third of revenues. Exports peaked at 2.8 million barrels per day in April, including 300,000 barrels per day of condensate, but have fallen to 1.8 million bpd since then, according to WoodMac, which expects volumes to drop further to 1 million bpd.

rallied above $85 per barrel in October on fears of a steep decline in Iranian exports. Prices have eased since then on expectations that some buyers would receive exemptions and were flat at around $73 on Monday.

"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.

(Reporting By in SEOUL, Kaori Kaneko and in TOKYO, and Ben Blanchard in BEIJING; Additional Reporting by in NEW DELHI; Writing by and Dmitry Zhdannikov; Editing by Janet Lawrence)

(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. 18:29 IST
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