December 06-2013
The United States last week renewed sanctions exemptions for the six countries that have bought oil from Iran this year.
US Secretary of State John Kerry personally announced the renewals.
Normally, the renewals—which are good for six months—would contain an announcement that those countries must “significantly reduce” their purchases of Iranian oil over then next six months in order to get another renewal six months hence.
But in keeping with the agreement reached with Iran last month, Kerry announced that the United States was not leaning on the six countries to reduce their oil purchases further.
However, he emphasized that they could not increase their purchases of Iranian oil during the coming six months. And, if they do increase their buys, they will face sanctions immediately. The sanction is to bar their banks from doing business in the United States, a killer punishment for any major bank.
Kerry said, “As part of the Joint Action Plan [as the agreement with Iran is called], we will pause for six months our efforts to further reduce Iran’s crude oil sales. However, the Joint Action Plan does not offer relief from sanctions with respect to any increases in Iranian crude purchases by existing customers or any purchases by new customers.”
Sri Lanka, which has not bought any Iranian crude since the middle of 2012, has said it would like to begin buying Iranian oil again since its sole refinery was designed to use Iranian oil. Other crudes don’t produce as much of the kinds of refined products that Sri Lanka wants. But Kerry’s announcement made pointedly clear that Sri Lanka will come under sanctions if it buys any Iranian oil.
Kerry did not provide a table of the volumes of oil bought by Iran’s clients over the last six months, so there was no clear benchmark against which to judge them. But Reuters says Iran’s total sales over the first 10 months of 2013 have come to 1.02 million barrels day.
The six purchases have been China, Japan, India, South Korea, Turkey and Taiwan. Taiwan has bought only one or two tanker loads. The other five have all been regular buyers.
