US official: Iran oil buyers cutting imports further

Importers of Iranian oil expected to reduce purchases for fear of being cut from US financial system under US sanctions on Iran.

By REUTERS
April 10, 2013 11:28
1 minute read.
Oil Drill

Oil 2. (photo credit: Jim Urquhart/ REUTERS)

 
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LONDON- The United States expects importers of Iranian crude oil to make further significant cuts in their purchases, a senior US official said on Wednesday, though she noted that there are seasonal fluctuations.

"I do expect that reductions in the importation of oil will continue," the senior State Department official told reporters on condition of anonymity. "There is seasonality, there are spikes, it does go up. There are prior contracts and seasonality to those contracts, so we know there will be fluctuations, but I expect that there will be continued reductions."

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Asked if she expected these to be significant reductions, the official replied "yes."

Under US law, countries that import Iranian crude oil must make "significant reductions" -- as determined by the US government -- or their banks run the risk of being cut off from the US financial system under US sanctions.

The United States on March 13 granted a 180-day reprieve from such sanctions to Japan and 10 European Union nations after determining they had made such cuts. The official's comment suggested Washington may grant a further six-month reprieve when it next assesses how much countries have cut their imports.

The U.S. sanctions aim to choke off funding for Tehran's nuclear program, which the West suspects is trying to develop weapons, by slashing Iran's crude exports. Iran says its nuclear program is for civilian purposes.

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