WASHINGTON (Reuters) – The United States wants to prevent the global oil markets from being disrupted by imposing sanctions on Tehran and, in certain cases, considering exemptions for countries that need more time to liquidate their oil imports from Iran, the US said Finance Minister Steven Mnuchin.

FILE PHOTO: US Treasury Secretary Steven Mnuchin announces the hearing of House Financial Services on the state of the international financial system on Capitol Hill in Washington, US, July 12, 2018. REUTERS / Joshua Roberts

"We want people to reduce their oil purchases to zero, but in certain cases, if people can not do it overnight, we will consider exceptions," Mnuchin told reporters on Friday and told some US officials that there would be no exceptions. Mnuchin's comments were suspended for publication on Monday.

Mnuchin spoke with reporters on the way from Mexico, where he was part of a high-level US delegation headed by Secretary of State Mike Pompeo to meet Mexico's next president, Andres Manuel Lopez Obrador.

The Trump administration is forcing countries to stop all Iranian oil imports from November onwards, as the US sanctions Tehran after Trump has withdrawn its nuclear deal between Iran and six major powers, against the advice of allies in Europe and elsewhere.

Mnuchin said he would meet with colleagues from developed and developing countries in Buenos Aires on the margins of a G20 meeting of finance ministers from 19 to 22 July. US sanctions against Iran are likely to increase in its talks.

"In concrete terms, there are no blanket exceptions, there is no grandfathering," Mnuchin said. "We want to be very careful to run the energy markets to make sure people have time."

He added, "The State Department is able to forgo significant oil market reductions, which Treasury and State will do."

Mnuchin said that Washington has made its allies aware that they expect them to enforce sanctions on Iran, "but if there are specific situations, we are open to listening."

French Finance Minister Bruno Le Maire said at the weekend that Washington had rejected a French request for exemption for its companies operating in Iran, according to Le Figaro.

Paris had selected key areas where either exceptions or extended dismantling periods were expected for French companies, including energy, banking, pharmaceuticals and automobiles.

The Trump administration has said that there are more than 50 foreign companies that have withdrawn their business from Iran since Trump announced that the US is coming out of the nuclear deal between Iran and the US, Germany, France, Britain, China and withdraw Russia.

Speaking to reporters Friday, Pompeo said he had discussed US plans to reintroduce sanctions on Iran with "all but one" country. He did not name the land he had not consulted yet.

"What you asked us is check how we get there and the timeline for it," he said, "and I'm very confident that they understand."

Iranian President Hassan Rouhani said in a speech broadcast on state television on Saturday that Washington is more isolated than ever against sanctions against Iran, even among its allies.

His comments seemed to ease the popular concerns triggered by Trump's decision to withdraw from the agreement with Iran over his nuclear program.

The likely return of US economic sanctions has led to a rapid decline in the Iranian currency and protests from bazaar traders, who were generally loyal to Islamist rulers.

Trump has said that he has asked Saudi Arabia to increase oil production, if necessary, to ensure global oil supply, and the country has 2 million barrels a day of unused capacity.

The Organization of Petroleum Exporting Countries agreed with Russia and other oil-producing allies on June 23 to increase production from July, with Saudi Arabia promising a "measurable" supply boost but no specific figures.

Reporting by Lesley Wroughton; Editing by Phil Berlowitz


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