Secretary of State Mike Pompeo said Tuesday that the U.S. will “consider” granting waivers to countries seeking to avoid being sanctioned for buying oil from Iran.
“There will be a handful of countries that come to the United States and ask for relief …. We’ll consider it,” Pompeo told Sky News Arabia during a Tuesday visit to Abu Dhabi.
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Pompeo added that countries not granted waivers would pay a price.
“Come Nov. 4, there will be a U.S. sanction that prevents crude oil from passing from Iran to other countries,” he said. “It will be sanctionable activity. We will enforce those sanctions.”
The statements show the Trump administration is offering wiggle room to what it had previously described as a hard-line policy. In June, the Trump administration said it would take a zero-tolerance approach to enforcing sanctions on Iran after it abandoned the nuclear agreement with Tehran in May.
The U.S. expects all countries to cut oil imports from Iran to “zero” by November or risk sanctions cutting their access to U.S. markets and financial institutions, a senior State Department official told reporters at the time.
If that happens, most experts expect higher prices for oil and gas.
OPEC last month agreed to boost oil production to head off rising oil prices, as some key producers, such as Venezuela and Libya, face output constraints.
Iran is OPEC’s third-largest producer, and sells around 2.4 million barrels a day, or more than 2 percent of global supplies, since the lifting of sanctions in 2016. Some countries that have growing energy consumption needs could struggle to move on from Iranian oil by November.
Most of Iran’s oil exports go to Asia, with China, India, South Korea, and Japan being the largest purchasers. China and India combined buy 60 percent of Iran’s total exports. The U.S. imports no Iranian crude.
India, the biggest buyer of Iranian oil after China, has said it is preparing for a cut in crude imports from Tehran. But China could be the hardest to wean off Iranian oil, analysts say. Beijing could look to buy Tehran’s oil at a discount after U.S. sanctions spook other purchasers.
