Mnuchin says U.S. to consider waivers on Iran sanctions

[July 17, 2018]  By Lesley Wroughton

WASHINGTON (Reuters) - The United States in certain cases will consider waivers for countries that need more time to wind down imports of oil from Iran as it seeks to avoid disrupting global oil markets while reimposing sanctions against Tehran, U.S. Treasury Secretary Steven Mnuchin said.

"We want people to reduce oil purchases to zero, but in certain cases if people can't do that overnight, we'll consider exceptions," Mnuchin told reporters on Friday, clarifying some U.S. officials' comments that there would be no exemptions. Mnuchin's comments were embargoed for release on Monday as other U.S. officials were expected to begin talks in India this week on cutbacks in Iranian oil supplies.

Mnuchin spoke to reporters while en route from Mexico, where he was part of a high-level U.S. delegation led by Secretary of State Mike Pompeo to meet Mexico's next president, Andres Manuel Lopez Obrador.

The Trump administration is pushing countries to cut all imports of Iranian oil from November, when the United States reimposes sanctions against Tehran. Trump withdrew from the multi-national 2015 Iran nuclear deal against the advice of allies in Europe and elsewhere.

A delegation from the U.S. State Department and U.S. Treasury are expected for talks in Delhi this week to discuss Iran sanctions, according to Indian officials. U.S. crude oil exports to India hit a record in June as Indian refiners moved to replace supplies from Iran and Venezuela.

Andrew Lipow, president of Lipow Oil Associates in Houston, said India was expected to ask the United States to ensure adequate global oil supplies as Washington presses countries to cut back on Iran oil.

"That might include pressure to release oil from the Strategic Petroleum Reserve, which the administration indicated they were considering on Friday," said Lipow.

"To put things in context, if we were to look at Iran in total, it's exporting roughly 2.2 million barrels a day of sales, of which half is going to both China and India," he said. "It's very important for the U.S. to get India on board with the sanctions policy."

Mnuchin said he would meet with counterparts from developed and developing countries during a G20 finance ministers' meeting in Buenos Aires this week. U.S. sanctions against Iran are likely to be raised in his talks on the sidelines of the event.

"We've said very specifically, there's no blanket waivers, there's no grandfathering," Mnuchin said. "We want to be very careful in the wind down around the energy markets to make sure that people have the time."

"The State Department has the ability to issue waivers around significant reductions in the oil markets. That's something that Treasury and State will be doing," he said.

FRENCH REQUEST REJECTED

Mnuchin said Washington had made clear to allies that it expects them to enforce the sanctions against Iran, "but if there are specific situations we're open to listening."

French Finance Minister Bruno Le Maire said over the weekend that Washington had rejected a French request for waivers for its companies operating in Iran, according to Le Figaro.

U.S. Secretary of the Treasury Steven Mnuchin testifies to the House Financial Services hearing on state of the international financial system on Capitol Hill in Washington, U.S., July 12, 2018. REUTERS/Joshua Roberts

Paris had singled out key areas where it expected either exemptions or extended wind-down periods for French companies, including energy, banking, pharmaceuticals and automotive.

The Trump administration has said more than 50 foreign companies have withdrawn their business from Iran since Trump announced the U.S. was withdrawing from the 2015 nuclear deal between Iran and the United States, Germany, France, Britain, China and Russia.

Pompeo, also speaking to reporters on Friday, said he had discussed U.S. plans to reimpose sanctions on Iran with "all but one" country. He did not name the country he had not yet consulted.

"What they've asked us to do is review how we get there and the timeline for that," he said. "I'm very confident they understand."

Iranian Foreign Minister Mohammad Javad Zarif tweeted on Monday that Iran had filed a complaint with the International Court of Justice in the Hague against unilateral U.S. sanctions.

"Today Iran filed a complaint @CIJ_ICJ to hold US accountable for its unlawful re-imposition of unilateral sanctions," Zarif tweeted. "Iran is committed to the rule of law in the face of US contempt for diplomacy & legal obligations. It's imperative to counter its habit of violating int'l law."

The court could not be reached for comment.

Iranian President Hassan Rouhani, in remarks carried live on state television on Saturday, said Washington was more isolated than ever over sanctions against Iran, even among its allies.

His comments appeared to be trying to ease local concerns fueled by Trump's decision to withdraw from the nuclear deal with Iran.

The likely return of U.S. economic sanctions has triggered a rapid fall of Iran's currency and protests by bazaar traders usually loyal to the Islamist rulers.

Trump has said he asked Saudi Arabia to raise oil production if needed to ensure global oil supplies and the country has 2 million barrels per day of spare capacity.

The Organization of the Petroleum Exporting Countries (OPEC)agreed with Russia and other oil-producing allies on June 23 to raise output from July, with Saudi Arabia pledging a "measurable" supply boost, but giving no specific numbers.

(Reporting by Lesley Wroughton,; Additional reporting by Stephanie Kelly in New York; Editing by Phil Berlowitz and Bill Berkrot)

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