Hook: Trump Administration Will Not Extend Iran's Oil Sanctions Exemptions

Brian Hook, the head of the Iran Action Group at the U.S. State Department, stated that the U.S. has no plans to extend exemptions from oil sanctions on Iran. In an interview with Japan's NHK network published on Tuesday, February 5, he urged countries that purchase Iranian oil to stop buying from Iran. Hook emphasized that the strategy announced aims to bring Iranian oil imports to zero as quickly as possible and that the U.S. is not looking to grant exemptions or exceptions to the sanctions regime for any country, whether related to oil or other issues. He noted that the exemptions granted by the U.S. were intended to prevent a sudden spike in global oil prices, and it appears that crude oil supply in the market is sufficient this year. Following the U.S. withdrawal from the nuclear agreement with Iran and the announcement of the re-imposition of sanctions against the Islamic Republic, U.S. officials had stated that the goal of the oil sanctions was to reduce Iranian oil exports to zero by mid-November. However, considerations regarding potential increases in oil prices and some regional considerations convinced the U.S. government to impose oil exemptions. The U.S. government granted exemptions to eight countries purchasing Iranian oil until May 2019, which is 180 days. In this context, Iranian Oil Minister Bijan Zanganeh stated that Italy and Greece, which are exempt from U.S. sanctions, are not buying any oil from Iran and are refusing to explain the reason. He also mentioned that Russia recently purchased a stake in an Indian refinery, but India, which has only been granted an exemption to purchase 300,000 barrels of Iranian oil daily, does not allow Russia to buy oil from this refinery in Iran. Currently, Iran exports oil only to China, India, Japan, and South Korea, apart from Turkey. Taiwan, which had received an exemption from the U.S., has also halted its purchases of Iranian oil. According to a report from the Organization of the Petroleum Exporting Countries (OPEC) on January 16, Iran's oil production in December decreased by 159,000 barrels compared to the previous month and by about 1 million and 50,000 barrels compared to the average production in 2017. This report estimated Iran's production in December at 2 million and 769,000 barrels, which is even lower than Iran's oil production in December 2015, before the lifting of Western sanctions. In this regard, Mohammad Baqer Nobakht, head of the Planning and Budget Organization, stated last month, 'We are facing severe problems in the oil export sector' and added that Iran has significantly distanced itself from the $47 billion oil revenue projected in the 2018 budget.