US will not renew Iran oil exemptions, sources say

The administration of Trump will not renew exemptions that allow some countries to buy Iranian oil without facing the sanctions of the United States, according to four people familiar with the subject, a move that has convulsed the energy markets and This could bother major importers like China and India.

The Secretary of State of the United States, Michael Pompeo, had planned to announce the decision Monday morning in Washington, said the people who requested that their identity not be revealed on the grounds that the plan had not yet been officially presented. Existing exemptions, which apply to China, South Korea, Taiwan, Turkey, Greece, India, India Italy and Japan, expire on May 2nd.

The Administration will also announce commitments from other suppliers, including Saudi Arabia and the United Arab Emirates, which will offset the loss of Iranian crude in the market, according to two people.

The decision to not renewing exemptions is a victory for National Security Advisor John Boltonand its allies, who had argued that US commitments to maintain a firm stance against Iran made no sense as long as the exemptions were maintained. Pompeo and his team had been more cautious, although they also claimed that the market was sufficiently supplied to increase pressure on Iran.

"With this decision, the Iranian economy will be under strong pressure as its currency gains run out and its foreign currency reserves collapse"said Mark Dubowitz, executive director of the Foundation for the Defense of Democracies and defender of additional sanctions against Iran.

The State Department declined to comment Sunday night. One of the people said that President Donald Trump had informed Saudi Crown Prince Mohammed Bin Salman and United Arab Emirates Crown Prince Mohammed Bin Zayed of the decision made during phone calls in recent days. The Washington Post had previously reported on the US decision.

The price of Brent crude, a global benchmark, rose 3.3 percent to 74.31 USD a barrel on Monday, its highest intraday level in nearly six months.

Trump's efforts to reduce Iran's supplies have shaken oil markets over the past year. After reaching more than $ 85 a barrel in anticipation of sanctions, oil has fallen to about $ 50 in the last three months of 2018, when the Administration unexpectedly granted exemptions.

China, main buyer of Iranian crude, He reiterated Monday his opposition to unilateral sanctions and accused the United States of having exceeded their jurisdiction. "Cooperation between China and Iran is open, transparent, reasonable and legitimate, and must be respected," Foreign Ministry Spokesman Geng Shuang said in response to a question about exemptions at a regular press briefing in Beijing. Geng did not anticipate China's reaction.