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Updated: Apr 22, 2019 22:06 IST

The Trump administration on Monday announced the United States will not grant any more waivers from sanctions to countries such as India and China that import Iranian crude in a bid to increase pressure on Teheran to “ end the regime’s destabilizing activity threatening” in the region and outside.

“President Donald J. Trump has decided not to reissue Significant Reduction Exceptions (SREs — as the waivers are called) when they expire in early May,” the White house said in a statement. “This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue.”

India was among eight countries that were granted waivers from US sanctions in November 2018 for a period of six months to enable them to reduce their import of Iranian crude to zero in a phased manner. The others were China, Japan, South Korea, Turkey, Taiwan, Italy and Greece. Three of them have already cut their imports to zero, leaving India and four others, the five largest importers of Iranian crude.

Their current exemptions expire on May 2. “Any nation or entity interacting with Iran should do its diligence and err on the side of caution. The risks are simply not going to be worth the benefits.,” Secretary of State Mike Pompeo told reporters at a news briefing.

If countries “don’t abide by this,” he added, “there will be sanctions”.

Countries found in violation of the Iran curbs will run the risk of secondary sanctions, which would, among other things, block them from the US financial system, which essentially is home to the world financial market. They would also be prevented from trading with the United States and conducting US-dollar transactions with other countries.

US officials would not say clearly, however, if Iranian crude buyers will be hit with sanctions on May 3 and after for receiving oil shipments already paid for in advance, before US announcement that there will be no more waivers. “It’s a hypothetical (situation),” an official said..

The United States also said it had worked with Saudi Arabia and the United Arab Emirates, together three of the world’s largest oil producers, to make sure countries weaning themselves off Iranian crude will not face shortfalls. Discussions with these countries were ongoing, it added.

India will be disappointed by the announcement. It was expecting another round of waivers having complied with the earlier SRE (which is called so because the waiver/exemption is granted only against a country showing significant reduction in its oil buys from Iran) in both “letter and spirit”, a person close to the discussion has said then. And the United States was also satisfied with the cooperation it had received, not only regarding Iranian crude but also imports from Venezuela.

The waiver from sanctions for Iran’s Chabahar Port, which is being developed by India for trading with Afghanistan and Central Asia, would remain in place. The Trump administration had exempted it also in November — calling it an “exception” — citing “close relationship” with India.

India, which is in the middle of elections, will also be watching out early May for a notification regarding removal from a zero-tariff US import scheme, the Generalized System of Preferences (GSP). It is due around the same time, 60 days after the administration notified US congress. India is hoping the Trump administration will delay the formal termination till after elections, enabling the next government to try and settle the underlying differences, essentially market access for American goods. Several US lawmakers, from both parties, have urged the administration to delay the decision till after the elections.

On oil sanctions, American officials had previously warned, as reported by Hindustan times, that the United States was “not looking” to extend the waivers that India and the others were granted in November because of a “fragile and tight oil market” at the time, which was not no longer the case.

“We have a very well-supplied oil market now,” said Brian Hook, the special representatives for Iran.

US oil sanctions that have been in force since May 2018 have taken off an estimated 1.5 million barrels of Iranian crude from the world market, denying Iran about $10 billion in revenues a month. Twenty-three of its importing countries have dropped their purchases to zero, and of the eight granted waivers in November, three are down to zero.

President Trump withdrew the United States from the Iran deal — called the Joint Comprehensive Plan of Action (JCPOA) in 2017, saying it did not sufficiently block Iran’s path to nuclear weapons, or ended its ballistic missiles programme and stopped its “malign activities” in the region.Sanctions were snapped back in two phases starting May 2018. Oil sanctions went into effect in November.