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U.S. renews Iran sanctions, grants oil waivers to China, seven others

Reuters  |  WASHINGTON 

By Humeyra and Gardner

WASHINGTON (Reuters) - The snapped sanctions back in place on Monday to choke Iran's and shipping industries, while temporarily allowing top customers such as and to keep buying crude from the Islamic Republic.

Having abandoned a 2015 nuclear deal, U.S is trying to cripple Iran's and force to quash not only its nuclear ambitions and ballistic missile program but also support for militant proxies in Syria, Yemen, and other parts of the

Earlier, Iranian said would continue to sell its despite Washington's "economic war." said U.S. "bullying" was backfiring by making Washington more isolated.

Washington has pledged to eventually halt all purchases of crude from globally but for now it said eight countries - China, India, South Korea, Japan, Italy, Greece, and - can continue imports without penalty. Crude exports contribute one-third of revenues.

"More than 20 importing nations have zeroed out their imports of already, taking more than 1 million barrels of crude per day off the market," U.S. told reporters in a briefing. "The regime to date since May has lost over $2.5 billion in "

Pompeo said the waivers were issued to countries that have already cut purchases of Iranian crude over the past six months, and to "ensure a " The exceptions are designed to last 180 days.

Trump said he wanted to go slow on the sanctions, citing concerns about causing global price spikes.

"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," he told reporters before flying to a campaign event.

Iran's exports peaked at 2.8 million barrels per day (bpd) in April, including 300,000 bpd of condensate, a lighter form of oil. Overall exports have since fallen to 1.8 million bpd, according to Wood Mackenzie, which expects volumes to drop to 1 million bpd.

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

'SQUEEZE IRAN HARD'

in October rallied above $85 per barrel on fears of a steep decline in Iranian exports. Prices have fallen since then on expectations that some buyers would receive exemptions and as supply from other big producers has increased.

Ellen Wald, an and fellow at the Atlantic Council, said the impact on global should be "blunted" for the 180-day length of the waivers to the eight countries. The hopes more will come next year from and from a so-called neutral zone between and Kuwait, if a dispute between the two countries over the zone is resolved.

In addition, U.S. hit a record high this year of about 11.3 million barrels, and sustained high output could reduce the impact of sanctions. On Monday, international benchmark Brent futures erased earlier gains to trade at $72.85 a barrel while U.S. crude futures fell 0.4 percent to $62.87. [O/R]

Oil markets have been anticipating the sanctions for months and the world's biggest producers have been increasing output.

Joint output from the world's top producers - Russia, the and - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.

U.S. officials have said the countries given temporary exemptions will deposit revenue in escrow accounts for to use solely for humanitarian purposes.

The sanctions also cover 50 Iranian banks and subsidiaries, more than 200 people and vessels in its shipping sector, Tehran's national airline, Iran Air, and more than 65 of its aircraft, a statement said.

"We've said for a long time: Zero should mean zero," John Bolton, told in an interview. "These are not permanent waivers - no way, we're going to do everything we can to squeeze Iran hard."

(Additional reporting by in NEW YORK, Jane Chung in SEOUL, Kaori Kaneko and Osamu Tsukimori in TOKYO, Ben Blanchard in BEIJING, Nidhi Verma in NEW DELHI and Lesley Wroughton, and Roberta Rampton in WASHINGTON; Writing by and Dmitry Zhdannikov; Editing by David Gaffen, and James Dalgleish)

(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: Tue, November 06 2018. 06:09 IST
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