Reuters: U.S. Temporary Exemptions for Iranian Oil Customers Have Reduced Prices

Reuters reports that the U.S. action to grant temporary exemptions to Iranian oil customers has reduced the price of this energy source at the beginning of the second round of sanctions against Iran. The U.S. government had announced its intention to bring Iranian oil exports to zero with the start of the second round of sanctions against Tehran. However, on November 9, John Bolton, National Security Advisor to Donald Trump, stated that Washington's goal with the oil sanctions against Iran is 'maximum pressure' on the Islamic Republic, but the U.S. does not want to harm its allies. Bolton noted that the U.S. understands that some countries, including those geographically close to Iran, 'may not be able to go all the way and bring [oil imports from Iran] to zero.' Nevertheless, he emphasized that the consequences of Washington's policies are already evident. Just hours before the implementation of the second round of U.S. sanctions against Iran on Monday, U.S. Secretary of State Mike Pompeo stated, 'Currently, more than one million barrels of Iranian oil exports have been reduced. This figure will decrease further. There are countries that have already reduced their oil imports from Iran but need more time to bring it to zero, and we are moving in that direction.' Pompeo mentioned that eight countries buying Iranian oil 'need more time to bring their imports to zero.' Bloomberg previously reported that countries such as Japan, India, South Korea, China, and Turkey are among those likely to receive exemptions. According to Business Insider, the European Union will not receive an exemption. Reuters' report on Monday morning indicates that the price of Brent oil has decreased by about six-tenths of a percent, and the price of West Texas Intermediate has decreased by about eight-tenths of a percent. However, both Brent and West Texas Intermediate have decreased by a total of 16 and 18 percent, respectively, since the beginning of October. In recent weeks, reports have emerged regarding surplus oil, increased production in countries like the U.S., Saudi Arabia, and Russia, a slowdown in purchases, and other economic issues. Considering these reports and the temporary exemptions, the current decrease in oil prices was not unexpected. This year's report from the U.S. Energy Information Administration shows that countries like France, Italy, and the United Arab Emirates have been other customers of Iran in recent months, with China and India at the top of the list. The amount of imports from countries like Japan and South Korea has fluctuated and, in some cases, has reached zero. These four countries and Turkey have either continued to purchase some Iranian oil in recent months or, while halting imports, have been negotiating with the U.S. for exemptions. The United States claims that the goal of the sanctions is to compel the Iranian government to 'change its behavior' and return to negotiations covering a range of issues from its nuclear program to missile program and Iran's activities in the region. Iranian officials, led by the Supreme Leader, who is essentially the main decision-maker regarding negotiations with the U.S., have not agreed to this so far.