Iran says because US sanctions are ‘principally illegal … it does not attach any value’ to the sanctions waivers.

Iran denounced US sanctions on its oil sector as “illegal” on Monday after the United States announced it will no longer grant sanctions exemptions to Iran’s oil customers.

“Since the sanctions in question are principally illegal, the Islamic Republic of Iran did not and does not attach any value or credibility to the waivers given to the sanctions,” the Iranian foreign ministry said in a statement issued on its official website.

The US on Monday told five countries – Japan, South Korea, Turkey, China and India – that they will no longer be exempt from US sanctions if they continue to import oil from Iran after their waivers end on May 2.

Tehran remained defiant over Washington’s decision, saying it was prepared for the end of waivers, while the Revolutionary Guards repeated their threat to close the Strait of Hormuz, a major oil shipment channel in the Gulf, Reuters news agency reported, citing Iranian media.

The Iranian foreign ministry said Iran was in “constant talks with its international partners including the Europeans” on the ending of the exemptions. It added that a “necessary decision” will be announced later, without elaborating.

The Trump administration granted eight oil sanctions waivers when it reimposed sanctions on Iran after President Donald Trump pulled the US out of the landmark 2015 nuclear deal. They were granted in part to give those countries more time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude.

Since November, three of the eight countries receiving waivers – Italy, Greece and Taiwan – have stopped importing oil from Iran.

Secretary of State Mike Pompeo insisted that the US would punish countries that buy Iranian oil after May 2, without spelling out the scope of the sanctions.

190422101257907

“We’ve made clear – if you don’t abide by this, there will be sanctions,” Pompeo told reporters. “We intend to enforce the sanctions.”

A senior Trump administration official, briefing US reporters on the condition of anonymity on Monday, said any move by Iran to close the Strait of Hormuz in response to the US move would be unjustified and unacceptable.

The official said the administration is now looking at ways to prevent Iran from circumventing existing oil sanctions.

Turkey: US decision will ‘harm Iranian people’

Turkey slammed the US decision, saying it will “harm the Iranian people” and will not “serve regional peace and stability”.

Ankara “rejects unilateral sanctions and impositions on how we build our relationship with our neighbours,” Turkish Foreign Minister Mevlut Cavusoglu tweeted. “The US decision … will harm Iranian people,” he added.

Geng Shuang, a Chinese foreign ministry spokesman, said at a daily news briefing in Beijing on Monday that it opposed unilateral US sanctions against Iran and that China’s bilateral cooperation with Iran was in accordance with the law.

190416161636586

South Korea‘s Yonhap news agency quoted the foreign ministry as saying the South Korean government had been negotiating with the US at all levels to extend the waivers and that it would continue to make every effort to reflect Seoul’s position until the May 2 deadline.

In India, refiners have started a search for alternative supplies but the government declined to comment officially.

Embassies of India, China and South Korea in Washington did not immediately respond to requests for comment, along with Japan, whose Prime Minister Shinzo Abe will be in the US capital on Friday for an official visit.

The Trump administration said it was working with top oil exporters Saudi Arabia and the United Arab Emirates to ensure the oil market was “adequately supplied” but the market, already fretting about tight supplies, raised scepticism about whether Riyadh could take a slower approach in boosting exports.

The international Brent crude oil benchmark rose to more than $74 a barrel on Monday, highest since November, due to the uncertainty surrounding increased supply from Saudi Arabia and other OPEC nations, while US prices hit a peak of $65.99 a barrel for the first time since October 2018.

“Combined with declines in global crude stocks, continued losses in Venezuela production as well as a possible disruption in Libya, a zero-waivers Iran decision will present a challenge to keeping global oil prices in check,” Joe McMonigle of Hedgeye Risk Management said in a note to clients.