Oil seesaws on reported Iran sanction waivers, US-China trade hopes

Oil seesaws on reported Iran sanction waivers, US-China trade hopes

The United States is preparing to reimpose sanctions on Iran's oil industry on November 5 after withdrawing from Tehran's nuclear deal with world powers. "Administration officials used to tell us it's OK to give Iran concessions on SWIFT because they would force oil exports down to zero", the source said. Of the eight countries receiving the waivers, six will import at "greatly reduced levels", he said.

Although some waivers had been expected, crude oil prices fell, with Brent futures down by 10 cents at 0752 GMT to $72.79 per barrel, as the number of waivers granted surprised many traders.

Secretary of State Mike Pompeo has confirmed earlier reports that eight nations will receive exemptions from the reimposed penalties, but refused to name them and said the European Union was not among them.

Pompeo said, the U.S. is to issue temporary exemption to eight "jurisdictions" from Iranian sanctions recognising their significant reduction in imports of oil from Iran. China - the leading importer of Iranian oil - is still in discussions with the U.S. on terms, but is among the eight, according to two people familiar with the discussions who also asked not to be identified.

Iranian President Hassan Rouhani has warned Iranians they face hard times when new USA sanctions take effect on Sunday but said the government would do its best to alleviate them.

Hours before he spoke, Iranian President Hassan Rohani warned Iranians they could face more economic hardship in the months ahead as the USA imposes a new round of sanctions.

Separately, Oil Minister Bijan Zanganeh said on Wednesday that 280,000 barrels of oil had been sold on the country's energy bourse and that an additional 720,000 barrels would be offered for sale again on the exchange, according to SHANA, the news website of the Iranian Oil Ministry.

"In May, President Donald Trump pulled the U.S. out of the 2015 landmark joint comprehensive plan of action (JCPOA) terming it as disastrous".

Barack Obama, the USA president at the time, had argued the deal would prevent Iran from developing nuclear arms.

The administration's decision to issue waivers to eight countries also marked a significant reduction from the Obama administration, which issued such exemptions to 20 countries over three years.

Traders said oil was lifted along with Asian stock markets after a phone call between the US and Chinese presidents raised hopes that the trade dispute between the world's two biggest economies could be resolved.

Countries that get waivers under the revived sanctions must pay for the oil into escrow accounts in their local currency. This way, the United States will be able to continue constraining Iran's economy.

Indian and the USA officials have been negotiating for months on terms of waiver from sanctions.

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