ERBIL, Kurdistan Region – The United States will not renew oil waivers given to eight countries last November that are set to expire next month, according to media reports, ending weeks of speculation about the move that will have dire consequences for the Iranian economy.
Washington Post columnist Josh Rogin broke the news on Sunday evening, citing State Department officials. Reuters also confirmed the news.
US Secretary of State Mike Pompeo will announce the decision on Monday that all eight countries that had been issued waivers, including China and India, will have to end their import of Iranian crude oil in early May or face sanctions, according to the reports.
Oil prices jumped by about three percent in reaction to the news.
The landmark 2015 nuclear deal gave Iran some relief from decades of sanctions. But after US President Donald Trump withdrew from the agreement last summer, Washington re-imposed sanctions on Iran’s energy, banking, and shipping sectors. US hawks pledged to bring Iranian crude exports to zero under what they called the “toughest ever” sanctions.
Iranian leaders have said they are accustomed to the sanctions they have lived under for 40 years, and Washington’s stance against them will not dent their revolutionary resolve.
Greece, Italy, and Taiwan – three of the countries that were issued waivers – have already complied are now import zero Iranian oil. China, India, Turkey, Japan, and South Korea must now do the same.
The United Arab Emirates (UAE) and Saudi Arabia are expected to offset supplies if the end of the waivers destabilizes the oil market, according to the Washington Post.
Trump’s administration will “try to rely on Saudi Arabia… to reverse policy and increase volumes to calm market fears of oil supplies quickly tightening,” predicted energy analyst Peter Kiernan, Reuters reported.
Tensions between Washington and Tehran have been on the rise after the US State Department designated Iran’s Islamic Revolutionary Guard Corps (IRGC) a terrorist organization earlier this month and Iran reciprocated by slapping the same label on US Central Command (CENTCOM). Iranian Supreme Leader Ali Khamenei appointed a new IRGC chief yesterday.
The IRGC terror designation could have dire consequences for Iraq, whose armed forces have close ties with the Iranian Guards. Washington may, however, be making some exemptions so that countries who have contacts with the IRGC and aid agencies working in Syria, Iraq, and Yemen can avoid sanctions.
“Simply engaging in conversations with IRGC officials generally does not constitute terrorist activity,” a State Department spokesperson told Reuters on condition of anonymity Sunday.
“Our ultimate goal is to get other states and non-state entities to stop doing business [with] the IRGC,” the spokesperson added.
Iraq’s Popular Mobilization Forces (PMF, known locally as Hashd al-Shaabi), have very close ties with the IRGC.
Chargé d’affaires of the US Mission in Iraq Joey Hood, in an interview on Saturday with Iraq’s Dijlah TV, said Baghdad will have to end Iran’s influence on their security forces, saying such dependency weakens Iraq’s sovereignty.
The Shiite PMF militia groups linked to the Revolutionary Guards are also connected to conflicts in Syria and Yemen and Washington will take steps to try to limit this in the coming days, he added in comments that were dubbed into Arabic by the TV station.
It’s time for the Iraqi army to impose its own authority throughout the country, he said.