Will The U.S. Seek Zero Iranian Oil Exports Once Waivers Expire?

Despite the fact that the U.S. is not looking to grant any waivers to Iranian oil customers when the current ones expire in early May, it shouldn’t be taken for granted that no waivers will be issued, according to the U.S. Special Representative for Iran, Brian Hook, and to analysts and an official with the previous U.S. Administration.

“We did not want to lift the price of oil, and we were successful doing that.  So when the president left the deal it was trading at $74. When our sanctions went back into effect, and we had taken off a million barrels of Iranian crude, oil was at $72,” Hook said at Atlantic Council’s 2019 Global Energy Forum in Abu Dhabi on Saturday. 

“So we had very carefully calibrated the balancing of our national security goals and our economic interests. We did not – the president was very clear that he did not want to cause a spike in oil, and so we granted eight oil exceptions – significant reduction exceptions. All of those countries demonstrated significant reductions in their purchases of Iranian crude that made them eligible for an exception,” Hook said.

“We are not looking to grant any waivers or exceptions to the import of Iranian crude,” U.S. Special Representative for Iran said.

However, asked about waivers, Hook replied “Well, I can’t preview that specifically.”  

“All I can say is that we believe that a – that certainly when we have a better-supplied oil market then that puts us in a much better climate to accelerate the path to zero,” Hook noted.

While the U.S. Administration and many analysts believe that there will be a direct correlation between the U.S. Iran waivers policy and the price of oil at the time it has to decide, Amos Hochstein, the former international energy envoy who oversaw Iran sanctions under President Obama, told CNBC that “There will 100 percent be exemptions in May.”

According to Hochstein, the U.S. granted exemptions because it was unable to reach agreements with some of Iran’s largest oil customers to stop importing oil from Tehran and the Administration probably doesn’t want to sanction countries that would continue imports.

“The reason for that is if you don’t give an exemption and someone is importing, then you have to sanction them, and you probably don’t want to sanction them,” Hochstein told CNBC.