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White House Hints At Easing Of Iran Sanctions For 'Friends And Allies'

White House Hints At Easing Of Iran Sanctions For 'Friends And Allies'

Under U.S. law, Washington can sanction the financial institutions of foreign countries that fail to significantly reduce their purchases of Iranian oil and petroleum products.

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.

Any country, or company, trading with Iran without United States consent after sanctions kick off risks getting cut off from the American financial system.

Donald Trump's presidential determination, not an executive order but a kind of directive issued by the White House to the members of his administration on some policy matters, comes less than 100 hours before the deadline set by him for countries like India to bring its purchase of oil to zero from Iran by November 4.

His comments come just one day after the country's foreign minister said US sanctions will have "severe consequences".

But Washington also has been considering waivers from the sanctions requested by allies such as India and Turkey.

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"We have sought to bypass an unwilling regime in Islamabad by establishing in June 2017 an air freight corridor between India and Afghanistan, [and] develop the Chabahar Port as a gateway for onward connectivity to and from Afghanistan and Central Asia", Mr Gokhale said. But, as a condition of waiver, Indian oil firms will reduce their imports to 14-15 million tonnes, the source said. The companies will be allowed to import 1.25 million tons a month up to March 2019, the same as they ordered for October and November.

In September, Chinese oil imports from its single biggest supplier Russian Federation rose to 1.65 million bpd from 1.54 million bpd a year earlier, while imports from the second-largest supplier, Saudi Arabia, dropped by 12 percent year on year to 919,800 bpd, according to the Chinese customs data. Under this, rupee is used for import of rice, drugs, and other products from India while the balance proceeds in rupee and euro sit idle in the Indian bank waiting for sanctions to go. Nonetheless, major Indian refiners Reliance Ltd. and Indian Oil Corporation Limited - citing a decision by the State Bank of India to cease transactions with Iran as complicating efforts to stay engaged with Iran - have announced they are considering cutting oil buys from Iran. "I am not in a position to make statements on this issue at this time", U.S. Ambassador to India Kenneth Juster told reporters recently. India and Iran still have to figure out shipping and insurance details for a smooth trade.

A waiver would allow companies to buy limited volumes of Iranian oil without running the risk of being shut out of the US financial system.

After global sanctions were lifted, India reportedly also paid Iran the Dollars 6.5 billion it owed for oil purchased during 2012-2016.

Nearly all buyers have been negotiating with the US for waivers.

India prefers Iranian oil as it comes cheap and suits many refineries' technical configuration.