U.S. to end waivers on Iranian oil exports by May 2nd

U.S. Secretary of State Mike Pompeo announced that the temporary waivers vis-à-vis oil purchases from Iran, which were granted to eight countries and jurisdictions that relied heavily on Iranian oil supply, for the purpose of a “transition period”, would expire on the second of May.

In a State Department press briefing that was held last night, the American top diplomat emphasized that the decision to lower Iran’s oil exports to zero is in line with the U.S. Administration’s declared goal of “depriving the (Ayatollah) regime of the funds it has used to destabilize the Middle East.” In his words: “Our goal has been to get countries to cease importing Iranian oil entirely. Last November, we granted exemptions from our sanctions to seven countries and to Taiwan. We did this to give our allies and partners to wean themselves off Iranian oil, and to assure a well-supplied oil market. Today I am announcing that we will no longer grant any exemptions. We’re going to zero – going to zero across the board. We will continue to enforce sanctions and monitor compliance. Any nation or entity interacting with Iran should do its diligence and err on the side of caution. The risks are simply not going to be worth the benefits.”

Two of the countries and a jurisdiction that received the temporary waiver, including Italy, Greece and Taiwan, have already ceased all oil purchases from the Islamic Republic of Iran. In contrast, the remaining five countries, which include China, India, Japan, South Korea and Turkey, have continued importing Iranian oil, despite looming exposure to crippling U.S. sanctions.

That said, seeking to avoid a reality in which Washington will be forced to sanction its allies and partners, Secretary Pompeo pointed to a series of measures that will accommodate the projected deficit, effectively allowing those countries to timely transition to alternative markets. The U.S. Secretary of State said: “The United States has been in constant discussion with allies and partners to help them transition away from Iranian crude to other alternatives. And we have been working with major oil-producing countries to ensure the market has sufficient volume to minimize the impact on pricing. Both the Kingdom of Saudi Arabia and the United Arab Emirates have assured us they will ensure an appropriate supply for the markets. And of course, the United States is now a significant producer as well.”

Despite Pompeo’s efforts to alleviate concerns regarding ‘market stability’, the announcement impacted oil prices, which topped at 74 dollars a barrel yesterday – the highest in six months. That said, Secretary Pompeo insisted that the decision to target Iran’s remaining oil exports, which constitute up to 40 percent of the Ayatollah regime’s total revenue, are part of Washington’s “maximum pressure” campaign that aims at forcing the Islamic Republic to abandon its malign activities – and as such – ‘if Iran is willing to address U.S. demands, these measures will be re-evaluated.’ Pompeo said: “With the announcement today, we have made clear our seriousness of purpose. We are going to zero. We – how long we remain there at zero depends solely on the Islamic Republic of Iran’s senior leaders. We have made our demands very clear to the ayatollah and his cronies. End your pursuit of nuclear weapons. Stop testing and proliferating ballistic missiles. Stop sponsoring and committing terrorism. Halt the arbitrary detention of U.S. citizens. Our pressure is aimed at fulfilling these demands and others, and it will continue to accelerate until Iran is willing to address them at the negotiating table.”

While India, Japan and South Korea have indicated compliance with the U.S. demand, Turkey and China have voiced their dismay. It is important to note, however, that in contrast to China; Turkish Foreign Minister Mevlut Cavusoglu stressed in a post on Twitter that “Turkey rejects unilateral sanctions and impositions on how to conduct relations with (its) neighbors,” yet stopped short from revealing whether Ankara would disregard the American decision. Meanwhile in Beijing, the Chinese Foreign Ministry Spokesman underscored his countries resolve to maintain open cooperation with Iran. According to Geng Shuang, the Chinese Foreign Ministry Spokesman, “China has always opposed the U.S. imposition of so-called ‘unilateral sanctions’ and ‘long-arm jurisdiction’. China’s cooperation with Iranian companies and Iran is open, transparent, reasonable and legal, and should be respected. The Chinese government is dedicated to safeguarding Chinese companies’ legitimate rights. We are willing to play a positive and constructive role in order to promote the stability of the international energy market.”

Meanwhile in Tehran, the Islamic Revolutionary Guard Corps warned that Iran may close the Strait of Hormuz, if the United States would prevent its ships from using the strategic waterway. The threat was made by the IRGC’s Navy Commander, Rear Admiral Alireza Tangsiri, who further insisted in an interview with the Iranian Arabic-language broadcaster ‘al-Alam‘, that in case of any threat to Iranian shipping lanes, the Revolutionary Guards ‘will close (the Strait of Hormuz) to other countries.’ In response to the Iranian threat, a senior U.S. Administration official emphasized that ” Any move by Iran to close the strategic Strait of Hormuz… would be unjustified and unacceptable.” While the official did not elaborate on possible consequences, if the IRGC would follow through on its threat, the U.S. Navy made multiple statements on its mandate to use all means necessary to assure freedom of maritime navigation. It is important to note the global significance of the Strait of Hormuz, where about a third of global sea-borne oil shipments and about a quarter of oil traded worldwide, are transported through on a daily basis.

Meanwhile in Israel, Prime Minister designate Benjamin Netanyahu warmly welcomed the American decision. During a high-holiday tour of the Capernaum National Park, which is located near the Sea of Galilee; the Israeli leader insisted that the important U.S. decision to increase sanctions against Iran is the right path to block the Islamic Republic’s aggression. The Israeli Prime Minister stated”The decision of President Trump and the American administration to increase the sanctions against Iran is a decision of very great importance. This is the path to deal with Iran’s aggression, and this is path to block it.”