Oil sanctions

U.S. exempts 11 states from Iran sanctions; China, India exposed

The United States exempted Japan and 10 EU nations from financial sanctions because they have significantly cut purchases of Iranian oil, but left Iran’s top customers China and India exposed to the possibility of such steps.

Financial Post,

21 March, 2012

The decision means banks in these countries have been given a six-month reprieve from the threat of being cut off from the U.S. financial system under new sanctions designed to pressure Iran over its nuclear program.

The list did not include China and India, Iran’s top two crude oil importers, nor U.S. allies South Korea and Turkey, which are among the top-10 consumers of Iranian oil.

Japan, China and India combined buy close to half of Iran’s crude exports of 2.6 million barrels a day, providing crucial foreign exchange for the OPEC member.

But the U.S. sanctions and an EU oil embargo have cut Iran out of financial networks, making it difficult to transfer funds to pay for trade and disrupting some oil shipments because of the difficulty of securing shipping insurance. Domestic prices in Iran have spiraled higher and the rial has slumped in value.

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