The US has agreed to temporarily allow eight countries to continue buying Iranian oil after it reimposes crippling sanctions on Tehran on November 5, Secretary of State Mike Pompeo said on Friday, citing significant reduction in imports of oil from the Persian Gulf nation.
While the US had previously wanted countries including India to completely halt oil purchases from Iran by November 4 when its full sanctions against Tehran come into force, it seems to have relented considering the havoc the move to completely take out Iranian supplies from the market would have had on prices.
India, which is the second biggest purchaser of Iranian oil after China, is willing to restrict its monthly purchase to 1.25 million tonnes or 15 million tonnes in a year (300,000 barrels per day), down from 22.6 million tonnes (452,000 barrels per day) bought in 2017-18 financial year, sources in New Delhi said.
Pompeo said the US is to issue a temporary exemption to eight "jurisdictions" from Iranian sanctions recognising their significant reduction in imports of oil from Iran. The names of the jurisdictions would be released on Monday.
The US will allow the eight nations to import Iranian oil but only at much lower levels after the reimposition of sanctions on Monday, Pompeo said.
The US will also demand the Society for Worldwide Interbank Financial Telecommunication (SWIFT) global financial network stop supporting Iranian banks as part of enforcing sanctions over Tehran's nuclear programme and alleged support for terrorism.
The sanctions will penalise countries that do not end importing Iranian oil and foreign companies that do business with blacklisted Iranian firms.
Pompeo and Treasury Secretary Stephen Mnuchin made the announcement on Friday. They said sanctions will remain until Iran meets demands that include ending support for terrorism, ending military engagement in Syria and completely halting its nuclear and ballistic missile programme.
In May, President Donald Trump pulled the US out of the 2015 landmark Joint Comprehensive Plan of Action (JCPOA) terming it as disastrous". Under the Obama-era deal, involving five permanent members of the UN Security Council and Germany, Iran agreed to stop its nuclear programme in exchange for relief from economic sanctions.
After the US' withdrawal from the deal, Trump signed fresh sanctions against Iran and warned countries against any cooperation with Tehran over its controversial nuclear weapons programme.
Iran has dismissed these charges and maintains that its nuclear programme is for peaceful purposes.
"The United States is in the midst of an internal process to consider significant reduction exceptions for individual countries, but that is only on a case-by-case basis," State Department Deputy Spokesperson Robert Paladino said on Thursday.
(With inputs from agencies.)