United States curbs looming, India reduces Iran oil imports by 30%

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USA national-security adviser John Bolton says the White House wants sanctions on Iran's oil sector to put a strain on Iran's economy, but it does not want to harm "friends and allies" that depend on the oil.

The US has broadly agreed to grant India a waiver from Iran sanctions after the Indian side chose to cut oil imports from Tehran by about a third in 2018-19, sources familiar with the matter said, adding that an official announcement could be made over the next few days.

Goldman Sachs said it expects Iran's crude oil exports to fall to 1.15 million barrels per day (bpd) by the end of the year, down from around 2.5 million bpd in mid-2018.

Questioned on the possibility of sanctions or waiver, U.S. ambassador to India, Ken Juster sidestepped questions from journalists on the margins of a conference on connectivity, refusing to answer in advance of official pronouncement from Washington. "I don't know whether these waivers are permanent or temporary", state TV quoted Iran's Deputy Oil Minister Ali Kardor as saying.

While the European Union (E.U.) has sought to preserve the flawed trade agreement with Iran by negotiating backdoor methods of trade, most major companies have chosen to exit the country.

Oil prices LCOc1 rallied this year to a four-year high above $85 per barrel on fears Washington may want to cut Iranian oil exports to zero. In October, WTI crude oil settled 10.9 percent lower, while Brent finished 8.8 percent lower for the month.

The waivers "look likely but not yet formally decided", a government official told The Hindu, indicating that the final word rests with U.S. President Donald Trump who must sign them before November 4.

"We think Trump will agree to China importing some volumes, similar to the treatment that India and South Korea receive", Clayton Allen of Height Securities said in a note on Friday.

While European powers believe the deal has been successful and have sought to preserve trade with Iran, most major companies have chosen to exit the country rather than incur the wrath of U.S. authorities.

The United States is preparing to reimpose sanctions on Iran's oil industry on November 5 after withdrawing from Tehran's nuclear deal with world powers.

Among other countries closely connected to Iran's energy system is Iraq, which imports gas via a pipeline.

Iran on Friday said that the waivers granted by the United States showed the Iranian crude was needed and could not be withdrawn from the market. As such, this has eased concerns over a potential supply shock from the imposition of oil sanctions on Iran and thus keeping oil prices on a downward spiral.

Russian Federation has been planning to import oil from Tehran but no major projects have materialized.

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