US says no change in plans to halt Iranian oil waivers

The U.S. State Department sought to quash speculation that the Trump administration is easing its clampdown on Iranian oil exports after a sanctions waiver program ended May 2, saying there was no softening in the American stance that any country buying Iran’s oil would be subject to penalties.

A U.S. decision not to renew the six-month waivers allowing limited exports is final and future trade will be subject to sanctions, Brian Hook, the U.S. special representative for Iran, said in a statement to Bloomberg News on Thursday. The U.S. had previously granted waivers, known as significant reduction exceptions, to eight governments in November — China, India, South Korea, Japan, Turkey, Taiwan, Greece and Italy.

“Our firm policy is to completely zero out purchases of Iranian oil — period,” Hook said. “Any new purchases of oil initiated after the expiration of the SREs on May 2 will be subject to U.S. sanctions, even if a country had not met its previously negotiated purchase caps during the SRE period from November to May 2.”

The statement was intended to clarify comments Hook made during a phone briefing with reporters earlier Thursday. Those remarks were construed as saying the U.S. might allow countries to keep buying Iranian oil after May 2 as long as they remained under the limits the U.S. set out when it originally granted the waivers.

For weeks, oil traders have asked how tough the U.S. position really is and whether there would be any loopholes for buyers of Iranian crude following the decision to end the waivers as part of the administration’s “maximum pressure” campaign.

President Donald Trump announced in late April the U.S. was ending the waiver program as it seeks to isolate Iran and craft a new agreement after abandoning a 2015 nuclear deal a year ago. Trump argued that the earlier accord failed to sufficiently limit Iran’s nuclear program or what the U.S. calls its malign activity in the Middle East.

Questions had focused in part on remarks made by Secretary of State Michael Pompeo in April that some “incidental” transactions might still be allowed.

No Loopholes

Officials had long said those transactions were a tiny fraction of the overall oil trade and were not meant to suggest a loophole. Thursday’s statement sought to clarify that further by saying the only possible exception to the position would be for oil that was already en route to its destination before the waivers expired.

“If oil was purchased, loaded and en route to its destination prior to the expiration of the significant reduction exceptions on May 2, these cargoes would not exceed the agreed-to caps on imports of Iranian crude oil negotiated under the now-expired SREs,” Hook said.

Later Thursday, Pompeo said evidence he has seen suggests that Iran was behind a spate of oil tanker attacks earlier in the month. He was echoing U.S. National Security Adviser John Bolton, who also said that Iran was to blame.

Bolton “got it right,” Pompeo told reporters flying with him to Berlin. “These were efforts by the Iranians to raise the price of crude oil around the world.”

Iranian Foreign Ministry spokesman Abbas Mousavi called Bolton’s allegations “laughable” and part of a “destructive” plan by Iran’s opponents, the state-run Mehr news agency reported.

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