New Delhi: The United States is looking to slash Iran’s crude oil exports by around 20 percent to below 1 million barrels per day (bpd) beginning in May, with Washington insisting that importers cut down purchases or face more US sanctions, sources say. US President Donald Trump aims to put an end to Iran’s primary source of revenue by stopping oil exports from the Middle Eastern country. The US has demanded that Iran limit its nuclear program and stop backing militant proxies across the Middle East.
US to renew waivers to sanctions for importers
The US is expected to renew waivers to sanctions for most nations purchasing crude from Iran, including the biggest buyers China and India if they pledge to cut combined imports to below 1 million bpd.
“The goal right now is to reduce Iranian oil exports to under 1 million barrels per day,”
A report by Reuters based on sources says the Trump administration was concerned that if they pushed for a complete shutdown of Iran’s oil, it would result in a global oil price spike in the short-term. “The goal right now is to reduce Iranian oil exports to under 1 million barrels per day,” a source said.
The US may also deny waivers to some nations that have not purchased crude from Iran recently, the sources added.
Iran’s oil exports halved after November sanctions
After pulling out of a 2015 nuclear accord between Iran and six other world powers, the US had imposed sanctions again in November. The sanctions have cut Iran’s oil exports by half by now.
“Zeroing out could prove difficult,” said a source, who added that a price of around US$ 65 a barrel for international benchmark Brent crude was “the high end of Trump’s crude price comfort zone.”