US reconsiders 'zero tolerance' policy on Iran oil imports

May grant waivers to good-faith allies.

OIL DERRICKS. (photo credit: REUTERS)
(photo credit: REUTERS)
WASHINGTON – The Trump administration signaled for the first time on Friday it will consider sanctions waivers for countries that have significantly reduced, but not completely eliminated, their intake of Iranian oil.
It faces a November 4 deadline to reimpose harsh sanctions on Iran, lifted in 2015 by the US under terms of an international nuclear deal with Tehran that President Donald Trump abandoned in May. White House officials had said over the summer they would push to bring Iranian crude exports “down to zero” and would be unlikely to grant any waiver exemptions, including to allies such as India and South Korea, two of Iran’s largest oil customers.
But the administration is “in the midst of an internal process” of considering exceptions called SRE waivers, or significant reduction exemptions, said a government official who spoke on the condition of anonymity.
White House National Security Adviser John Bolton said on Thursday that the administration’s objective was that there be no waivers and “exports of Iranian oil and gas and condensates drops to zero.” He added that the administration would not necessarily achieve that.
The administration is “prepared to work with countries that are reducing their imports on a case-by-case basis,” the official said.
India, second only to China in its purchases of Iranian oil, said last week that it would buy nine million barrels from Iran in a different currency from the US dollar. China, too, attempted in March to launch crude futures contracts in local currency to circumvent US sanctions barring Tehran access to the greenback.
Crude futures rose to a four-year high this past week as the market prepares for the return of US sanctions on Iran, the world’s seventh largest producer of oil and a significant military power in the Strait of Hormuz, through which a third of the world’s oil supply passes each day.
Saudi Arabia’s ARAMCO has said it will make up for market demands for crude in Iran’s place.
“The president has directed all of us in the government to come up with steps to re-impose the economic sanctions and to do whatever else is necessary to ensure we bring maximum pressure on the regime to stop its malign behavior across the board – not just in the nuclear field, but across the board,” Bolton said on Thursday.
Addressing foreign governments seeking to circumvent renewed US sanctions, he added: “As I’ve said to them, it’s like a book that was written several decades ago in this country– it was called something like the ‘Six Stages of Grief.’ You know, first you have denial, then you have anger.”
“Eventually, you get to acceptance,” he added.
Reuters contributed to this report.