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Iran warns Israel of 'firm response' if it acts against oil

15 March 2019

US Secretary of State Mike Pompeo has stressed Washington's commitment to swiftly bring Iranian crude oil exports to zero, saying Tehran's role in the energy market has been diminishing due to US pressure.

T he U.S. imposed sanctions on Iran in November after abrogating a nuclear deal in a dispute over Tehran's nuclear and missile ambitions, although India and other countries were exempted from the curbs.

The warning comes a week after Israeli Prime Minister Benjamin Netanyahu threatened to stop what he called Iran's "oil smuggling" by intercepting tankers carrying Iranian crude.

The U.S. sanctions have also resulted in stalled early negotiations between Iran and South Korea for new supertankers, while Panama has de-flagged many Iranian ships from its registry, according to Reuters' sources.

While tracking Iran's oil exports has become an increasingly hard task after the USA sanctions returned, some of the key Iranian oil customers that received US waivers resumed buying Iran's oil in 2019 or increased imports to their respective ceiling allowed under the waivers, after an initial "wait-and-see mode" for November and December purchases amid uncertainties as to who was getting waivers.

India's oil imports rose 4.6 percent in February from a year earlier to about 5 million barrels per day (bpd), according to tanker arrival data from shipping and industry sources.

LONDON - Iran will respond firmly to any Israeli naval action against its oil shipments, Iran's defense minister said on Wednesday, in comments that came a week after Israel's prime minister said its navy could act against Iranian oil "smuggling" to evade United States sanctions.

Hook pointed to US Energy Information Administration projections that global oil supply will outweigh demand in 2019, indicating that a removal of US waivers on Iranian imports could be done without dramatically impacting the market.

"On the numbers part, we'll get an updated assessment as we get closer to the end of the 180 day period", of the first round of waivers that ends in May, the spokesperson said.

It is not yet clear if reduced volumes of 8 million barrels a month is the new condition imposed by Washington for granting a second waiver to New Delhi from sanctions against Tehran.

Still, Hook said the decision on waivers will be made by President Trump, who is closely watching oil prices.

"India, China and Turkey - the three tough cases - will continue to negotiate with the administration and are likely to keep their waivers", one of the sources said. Since India also buys a lot of oil from Venezuela, the USA will struggle to convince India that it can do without much of its oil imports unless a new supplier emerges from thin air.

The administration would likely struggle to cut Iran's exports much below 1 million bpd due mainly to strong demand from China, India and Turkey, said Amos Hochstein, who was in charge of Iran sanctions as the top U.S. energy diplomat under former President Barack Obama.

He said he expects China and India purchases alone to account for around 800,000 to 900,000 bpd.

Iran warns Israel of 'firm response' if it acts against oil