The United States has announced that it will no longer waive sanctions for nations buying crude oil from Iran. The waivers are due to expire in May.
The sudden move is directed at a group of nations which are Iran’s biggest clients and have previously been beneficiaries of the US waivers; India, China, Japan, South Korea and Turkey.
The US aims to reduce Iran’s oil exports to zero, thereby cutting off the Government of Iran’s main source of revenue. Iran has protested, calling the move “economic terrorism”.
The announcement has elicited knee-jerk reactions from the nations affected, not least India, which imports more than 80% of its oil needs.
Why is the US trying to cut off Iran’s oil revenue? What are the reasons behind this move and what is India planning to do?
Read on to find out:
In November 2018, US President Donald Trump reinstated economic sanctions against Iran, after the infamous withdrawal from the Iran Nuclear Deal.
However, a group of eight countries were allowed to continue to import Iranian crude; India, China, Japan, South Korea, Turkey, Greece, Italy, and Taiwan.
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The US granted six-month waivers to these nations but placed a cap on the amount of oil that could be imported. For India this meant that Iran, which was previously its second largest supplier, fell rapidly to sixth place in November last year.
India and four other nations reportedly requested the renewal of these waivers, which are due to expire in May 2019, but this time, the US declined.