US sanctions on Iran come into effect: Details here
On Monday, the Trump administration's sanctions against Iran, covering the country's banking and energy sectors, came into effect. Describing the sanctions as the "toughest ever" on Iran, the Trump administration further said that it was confident that the sanctions would have their intended effect of altering the Iranian regime's behavior. However, the impact of sanctions on importers of Iranian oil remains unclear. Here's more.
Impact of sanctions on India, China, unclear
The sanctions on Iran impose restrictions on companies and countries doing business with Iran. Penalties have been reinstated on countries and companies around the world that do not halt oil imports from the Middle Eastern country. However, the Trump administration repeatedly dodged questions about the impact of the sanctions on India and China, two of the biggest importers of Iranian oil.
Reportedly, eight countries, including India, China, have been given exemptions
Although, the Trump administration did not explicitly specify it, India and China are believed to be among eight "jurisdictions" that have been given a rare, temporary exemption from the penalties of the sanctions. However, along with Japan, South Korea, Italy, Turkey, Iraq, and Taiwan, India and China have been asked to reduce their oil exports from Iran to zero by the next six months.
India has agreed to reduce imports, not stop them
In response to the sanctions, sources in New Delhi have said that India is willing to restrict its oil imports from Iran to 15 million tons in a year, down from the 22.6 million tons it imported in 2017-18, reported IE. However, it is unclear what action will be taken against India if oil imports are not reduced to zero within six months.
Iran has said that it will keep on selling oil
Reacting to the sanctions, Iranian President Hassan Rouhani, in a live broadcast to economists on Monday, said that Iran would continue to sell oil and "break" US sanctions. In the live broadcast, Rouhani further said that the US sanctions against Iran was an attack on the Iranian people. Further, Iranian authorities dismissed concerns that the sanctions would adversely affect the Iranian economy.
Oil prices see marginal slump after imposition of sanctions
Meanwhile, the imposition of the sanctions saw crude oil prices decrease marginally. At 0142 hours GMT on Monday, front-month Brent crude futures were at $72.39 per barrel, down 44 cents or 0.6% from its last close. Similarly, US West Texas Intermediate (WTI) crude futures touched $62.61 per barrel, down 53 cents or 0.8%. Since October, Brent crude and WTI have declined in value by 16% and 18%, respectively.