India, Korea said to agree outline of Iran oil waiver with US

By BLOOMBERG

SEOUL • India and South Korea agreed with the US on the outline of deals that would allow them to keep importing some Iranian oil, according to Asian officials with knowledge of the matter.

No final decision has been made and an announcement is unlikely before US sanctions on Iran are reimposed on Nov 5, the officials said, asking not to be identified because the information is confidential. That opens the possibility that the terms could still be modified or the deals scrapped entirely.

The waivers would ensure at least some Iranian oil continues to flow to the global market, potentially calming fears of a supply crunch and further suppressing international oil prices just before midterm elections in the US. Brent crude has fallen 14% from over US$85 (RM355.30) a barrel last month on signs that other OPEC producers will pump more to offset any supply gap.

Almost all buyers have been negotiating with the US for waivers. That was after US President Donald Trump in May withdrew from a nuclear agreement with Tehran hammered out by his predecessor, Barack Obama, and said he would reimpose economic curbs lifted under that 2015 accord.

India’s payments for the Iranian oil will go into a local escrow account, which can be used for barter trade with the Middle East producer, one of the people said. No money will directly go to Iran, according to the person.

While the waivers would signal an easing of Washington’s hard-line stance that buyers cut purchases to zero, the limiting of payments to an escrow account would mean the US can maintain economic pressure on Iran by squeezing a critical source of its revenue.

Spokespeople for India’s Oil Ministry and South Korea’s Energy Ministry declined to comment.

The US State Department on Wednesday referred to comments by spokesman Robert Palladino at a press briefing on Tuesday that while the goal of the US remains to get buyers to cut Iranian oil purchases to zero, it’s prepared to work with countries that are reducing their imports on a case-bycase basis. When asked which countries were being considered for granting waivers, Palladino said there was “nothing to announce today”.

Several countries “may not be able to go all the way to zero” right away on purchases of Iranian oil after US sanctions take effect, White House National Security Advisor John Bolton said on Wednesday at an event in Washington.