U.S. Allows China, India and Others to Continue Buying Oil from Iran

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The United States’ continuing war against Iran’s nuclear program sucks in a lot of other nations that the U.S. insists must follow its edicts of sanctions against the oil producing nation, but the U.S. yesterday granted waivers to China, India and several other nations that allows them to continue buying oil from Iran.

The waivers, which last for another 180 days, require that the countries reduce their oil purchases from Iran. With the move, the Obama administration has now renewed waivers for all 20 of Iran’s major oil buyers, prompting Republicans to claim the U.S. is being too lenient. Japan and 10 European Union countries got waivers in September, meaning all 20 have gotten renewed twice since Obama signed the sanctions law a year ago.

“The administration continues to let transgressions slide and enable the profits of (Iran’s) energy sector to fuel their nuclear ambitions,” said Florida Republican Ileana Ros-Lehtinen, chairwoman of the House of Representatives’ Foreign Affairs Committee, who was critical of the waivers.

The United States granted 180-day waivers on Iran sanctions to China, India and a number of other countries on Friday in exchange for their cutting purchases of oil from the Islamic Republic.

The purpose of the sanctions is to deny Iran of much-needed funds to make sure the Islamic Republic’s nuclear program can’t flourish. Western nations and Israel have accused Iran of enriching uranium to produce nuclear weapons, but Iran denies the charge, claiming its nuclear program is for civilian energy,

“The United States and the international community remain committed to maintaining pressure on the Iranian regime until it fully addresses concerns about its nuclear program,” Secretary of State Hillary Clinton said in a statement.

The other countries that received “exceptions” on Friday were South Korea, South Africa, Turkey, Sri Lanka, Malaysia, Singapore and Taiwan.

Under the sanctions law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases decline.

Though it isn’t as harsh as some Republicans would like because these other nations need Iranian oil, Iran’s oil exports have fallen 50 percent this year in the face of U.S. sanctions and a EU embargo that began on July 1. The result has been a loss to Iran of up to $5 billion a month, leading to a plunge in Iran’s currency, the rial, David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department said this week.

Tehran has been stockpiling billions of its oil revenues in currency reserves for decades, so it’s not clear how long Iran can go on with such a drop in its exports.

According to the U.S. Energy Information Administration, Iran’s crude production fell by 1 million barrels per day in September and October, the latest months for which data were available,  compared with the same time last year.

Clinton said Iran should take “concrete actions” to satisfy the international community through negotiations with the U.N. Security Council members plus Germany “or face increasing isolation and pressure.”

Although China, Iran’s top oil customer and a permanent member of the Security Council, has opposed the U.S.’s unilateral sanctions, its oil imports from Iran are down 22 percent on the year to 426,000 bpd from January to October. Much of this may have been due to a contract dispute.

But while oil imports are down, the U.S. is still more than willing to take Iran’s money. According to a story in al Jazeera, U.S. exports to Iran have jumped by nearly a third this year, despite the tightening of financial sanctions.

According to the U.S. Census Bureau, exports to Iran rose by 32 per cent to $199.5 million in the first eight months of 2012, from $150.8 million during the same period last year.

The largest category of U.S. exports to Iran through August was $89.2 million in sales of wheat and other grains. In 2011, the US sold $21 million worth of corn to Iran.

Sales of dairy products and other related exports more than doubled to reach $20.3 million from $7.8 million, while medical, dental, surgical and other “electro-diagnostic apparatus” sales also rose to $8 million from $4.7 million.

The surprising data shows just how complicated it is to totally isolate a nation in the modern global economy, where companies on the open market are in constant search of customers around the world—even in places their governments would prefer they not sell.

 

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