US doesn’t want to harm friends, allies with Iran sanctions: Bolton

WASHINGTON / TOKYO - Reuters

U.S. national security adviser John Bolton said on Oct. 31 the Trump administration wants sanctions on Iran’s crude exports to strain Tehran, but does not want to harm countries that depend on the oil.

The United States is preparing to impose the new sanctions on Iran’s oil industry after Washington withdrew from a nuclear deal between Tehran and other global powers earlier this year, but is also considering offering waivers to some allies that rely on Iranian supplies.

“We want to achieve maximum pressure but we don’t want to harm friends and allies either,” Bolton said in a talk at the Hamilton Society.

Bolton said the administration understands that a number of countries, some close geographically to Iran which he visited last week, and others “may not be able to go all the way, all the way to zero immediately.”

It was a more conciliatory tone about the sanctions from Bolton, a proponent of being tough on Iran and winding down its crude exports to zero.

Still, Bolton said that consequences can already be seen in Iran including the collapse of the rial, its currency.

“I think it’s important that we not relax in the effort,” he said.

In a presidential memorandum addressed to secretaries of State, Treasury and Energy, Trump said he determined there was sufficient supply of petroleum and petroleum products elsewhere than Iran to permit a reduction in purchases from the Islamic Republic.

Under the law, the U.S. president must periodically issue a “determination” on whether there is sufficient supply in the market from non-Iranian sources for countries to significantly cut their Iranian purchases.

The administration’s renewed sanctions are set to come into effect on Nov. 5.

Under U.S. law, Washington can sanction the financial institutions of foreign countries that fail to significantly reduce their purchases of Iranian oil and petroleum products.

The purpose of the law, which came into effect during the Obama administration, was to put pressure on Iran to curtail its nuclear program by forcing its major oil customers to reduce their purchases.

Three of Iran’s five largest buyers of crude - China, India and Turkey - have resisted calls by Washington to end their oil purchases outright.

Meanwhile, imports of Iranian crude oil by major buyers in Asia hit a 32-month low in September, as China, South Korea and Japan sharply cut their purchases ahead of upcoming U.S. sanctions on Tehran, government and ship-tracking data showed.

China, India, Japan and South Korea last month imported 1.13 million barrels per day (bpd) from Iran, according to the data, down 40.9 percent from a year earlier.

This marks the lowest imports since January 2016, right before the previous sanctions targeting Tehran’s nuclear program were lifted.

The Organization of the Petroleum Exporting Countries (OPEC) agreed in June to boost supply to help make up for the expected disruption to Iranian exports.

Washington is pushing allies to cut Iranian oil imports to zero, and U.S. Treasury Secretary Steven Mnuchin said last week it will be harder for countries to get waivers on the sanctions than it was under the Obama administration.

The United States cannot stop Iranian oil exports, Iran’s oil minister said last week, warning that such restrictions only ensure that oil prices remain volatile.