SINGAPORE (Reuters) – The US government has agreed to continue buying Iranian oil from eight countries, including its close allies South Korea and Japan and India, after it imposed sanctions on Tehran next week, Bloomberg quoted a US representative.

A gas torch on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf in Iran on July 25, 2005. REUTERS / Raheb Homavandi / File Photo

Iran's largest oil customers – all in Asia – have sought sanctions to continue buying oil, arguing that a total ban would trigger another crude oil price rally.

Bloomberg said on Friday that South Korea and Japan have received exceptions, along with India, which relies heavily on Iranian supplies.

A list of all waiver countries was expected to be officially released on Monday, Bloomberg said.

There was no immediate comment from the White House. The State Department did not respond immediately to a request for comment.

"Eight is much higher than anyone expects … Despite the tough conversation, issuing so many disclaimers provides a lifeline for Iran," said Olivier Jakob of the Petromatrix Advisory Council.

The United States imposed new sanctions on the Iranian oil industry Monday after Washington withdrew earlier this year from a nuclear agreement between Tehran and other world powers.

However, the move against US President Donald Trump has declined, leading to a strong rally in oil prices, including fuel costs, ahead of the US midterm elections.

It was unclear how much crude oil these eight countries in Iran are likely to buy, with crude oil exports having fallen in recent weeks from an average of more than 2.5 million barrels a day to around 1.5 million barrels a day.

In addition to crude oil, Iran also exports gas condensate of 0.5 to 1.0 million bpd. Buyers would also have to apply for a US waiver of further imports.

Goldman Sachs said that Iran will reduce crude oil exports to 1.15 million Bpd by the end of the year. During a previous round of sanctions at the beginning of the decade, Iran's oil exports temporarily fell to below 1 million Bpd without condensate.

Iran said Friday that the report on exceptions showed that the market needed the country's crude oil.

"The waivers granted to these eight countries show that the market needs the oil of Iran and can not be taken off the market … I do not know if these waivers are permanent or temporary," said Iran's deputy oil minister Ali Kardor television to say.

The LCOc1 oil price rose to a four-year high of over $ 85 a barrel this year as Washington feared Iran's oil exports could drop to zero.

However, in recent weeks, the rally has eased and markets feared that the global economy may weaken, with the expectation that Iran may still export significant volumes.

On Friday, the Brent Futures LCOc1 was trading at around $ 73, having fallen 12 percent since early October.


A Chinese official told Reuters that talks with the US government on disclaimers are continuing, with results expected in the coming days.

"We believe Trump will agree that China imports some quantities, similar to the treatment India and South Korea receive," said Clayton Allen of Height Securities on Friday in a statement.

The South Korean Foreign Ministry refused to comment and Japanese officials were not immediately available for comment.

Another country seeking to lift sanctions is Turkey. The Turkish Ministry of Energy announced Friday that it had received no written notification of an exception.

Analysts said waivers would likely be temporary.

"The US can use disclaimers to slow down implementation, but they will not last indefinitely," said Allen.

Among the countries closely linked to the Iranian energy system is Iraq, which imports gas through a pipeline. The United Arab Emirates imports large quantities of Iranian fuel oil into ships, and Egypt imports oil from Iran for the Sumed pipeline.

Russia has planned to import oil from Tehran, but no major projects have been implemented.

Reporting by Henning Gloystein in SINGAPORE, Aizhu Chen in BEIJING and Dmitry Zhdannikov in London; Additional reporting by Hyonhee Shin to SEOUL, Osamu Tsukimori TOKYO, Gulsen Solaker to ANKARA; Cut by Richard Pullin, Tom Hogue and Dale Hudson

Our standards:The Thomson Reuters Trust Principles.



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