By Mohammad Sadat Khansari
US Treasury Secretary Steven Mnuchin told Reuters on Sunday that if countries that import oil from Iran want sanctions waivers, they will have to cut their Iran imports by at least 20%.
He said: “I would expect that if we do give waivers it will be significantly larger reductions [than under the last Iran oil sanctions].”
The US will restore sanctions on Iran’s oil industry from November 4, as part of the new US policy on the Gulf nation, since Donald Trump pulled out of the nuclear deal in May. Countries that do business with the US will have to stop importing Iranian oil or face major sanctions.
Iran’s oil exports are expected to drop by two-thirds, but Mnuchin then dismissed fears that oil prices would rise, citing that the market has already factored the US sanctions into their current price estimates.
He also explained that he doesn’t expect all countries to cut their oil imports from Iran to zero by November 4 – a common pledge by the Trump administration – but hopes that it will happen eventually, citing the “very significant reductions” already.
Indeed, Japan and South Korea have stopped importing Iranian oil, prior to the sanctions going into effect, although China has increased its imports, likely due to slashed Iranian prices.
SWIFT
While the US is now calling on SWIFT, the cross-border transaction settlement service, to cut Iran out of its network.
Mnuchin said: “I can assure you our objective is to make sure that sanctioned transactions do not occur whether it’s through SWIFT or any other mechanism. Our focus is to make sure that the sanctions are enforced.”
Russia
The US has also warned Russia against helping Iran evade US sanctions on its oil, according to a senior Trump official who spoke anonymously to the Financial Times.
The source said: “Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions. I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of US sanctions.”
Last month at an Iran-Russia-Turkey summit, Russia and Iran reportedly agreed on a deal to help Iran evade US sanctions, according to a document from the Israeli Foreign Ministry. It would supposedly allow Iran to export crude oil to Russia via the Caspian Sea, which Russia would refine and then export worldwide. Russia would then would provide Iran with unspecified trade and service benefits.
