Iranian oil sanctions may backfire as waivers are granted

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Some countries will now not have to adhere to new rules about buying Iranian oil.

American efforts to impose sanctions on the purchase of Iranian oil may backfire after a number of countries were granted waivers and exemptions to the new rules.

The original aims of the sanctions imposed by the Trump administration were to reduce Iranian oil exports and quash its nuclear and ballistic missile programs, as well as to punish it for what America sees as support for military factions in countries such as Libya.

However, exemptions have now been granted to China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey, meaning they will be able to import at least some oil from Iran for another 180 days.

This group of buyers consumes more than three-quarters of Iranian oil sent by sea alone, according to trade data, meaning exports may start to rise after the sanction deadline this week.

US secretary of state Michael Pompeo has defended the waivers and insisted they are temporary, despite claims that the US is going back on its word and being too lenient.

The news comes after an Indian government source told Reuters it had met with the American government to insist it will be impossible for India to stop importing Iranian oil until at least next March.

US state department representative Robert Palladino said at a briefing: "Our goal remains to get to zero oil purchases from Iran as quickly as possible. That's not changed. But we are prepared to work with countries that are reducing their imports on a case-by-case basis."

President Donald Trump - who is facing pressure in the mid-term elections - also said he will be imposing sanctions gradually, highlighting fears of shocking the markets and potential price spikes as being behind his reasoning.

The last time sanctions against Iranian oil were lifted in 2016, the country's oil exports increased sharply immediately afterwards.