The US has agreed to grant India to buy crude oil from Iran, along with seven more countries which include Japan, South Korea, China, etc. This would allow Indian oil companies to access to trade 1.25 million tonnes of oil in a month.
Previously US president Donald Trump threatened authorizations against countries who will continue importing oil from Iran after a deadline of 4th November. A senior official said- keep purchasing Iranian oil after it reinforces authorizations on the OPEC producer on November 5th.
An official said that Donald Trump government objective remains to check the income to Iran’s economy, renunciations are being approved in exchange for constant import cuts so as not to drive up oil prices.
The countries that will get the renunciations are not identified yet but China who is the foremost importer of Iran oil is still in conversation with the US government on some terms and conditions.
The management must sustain a balance with the waivers by making sure that the oil market have adequate oil supply and while evading politically negative spike in fuel rates, on the other hand they also have to ensure that Iran government doesn’t accumulate adequate income that the US sanctions become immaterial.
Last month the global benchmark crude has dropped near 15 percent from $85 a barrel. OPEC (Organization of Petroleum Exporting Countries) which is an international organization of world’s major oil exporting 15 nations, are also insuring to stabilize the oil markets. OPEC members will push more to balance any supply gap in oil trading. On Friday in London oil stocks were at $73.04 a barrel.
The US government previously asked all the countries including India to stop all oil imports from Iran by 4th November. He mainly specifies India and China to stop buying oil from Iran as India and China are the largest importer of crude oil from Iran for long time. This was making the authorizations by America not very effective as Iran was able to produce income and keep running their economy even after the sanctions.
On Friday, United States Secretary of state, Mike Pompeo said that there will be significant reductions in imports of oil from Persian Gulf Nation. Previously, Pompeo said “it is our expectations that the purchases of Iran crude oil will go to zero from every country or sanctions will be imposed”.
India is also expected to be the one of the eight countries who will get the exemptions from importing the oil from Iran but senior administrative officials refused to revel out any of the countries name on Friday.
Pompeo also explained the reason for not revealing the names of the countries that are exempted from US Sanctions on Iran by explaining that the negotiations are still going on with other countries.
