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The U.S. has sent feelers to major buyers of Iranian oil that they can avoid sanctions by restraining imports by the end of June 2012. This includes major oil importers namely the Asian countries such as China, India and South Korea. Secretary of State Hillary Clinton said that Japan and other 10 European nations have significantly reduced their dependence on Iranian oil and thus are exempt from sanctions for a renewable period of 180 days. However, China, India and South Korea who are amongst the top three buyers of Iranian crude in the first half of last year were not granted waiver by U.S. Department of Energy. Japan; once the second largest buyer of Iranian crude was praised by Clinton for taking difficult steps to cut back Iranian oil imports as well rethink their energy requirements at such a critical time. Countries face the deadline of June 28 to significantly reduce dependence on Iranian crude purchases or their banks may be cut off the U.S. financial system. Countries now face a clear picture as how the Barack Obama administration will apply the oil market sanctions to comply with U.S. law. It looks, U.S. will also pressurize South Korea, India, China, Turkey, and South Africa to abide the sanctions on Iran. The U.S. is expecting a cut of 15% or more from the nation depending on the circumstances they face. According to U.S. officials, oil sanctions offer very little breathing space compared to other sanctions. China, India, South Korea, Turkey and other buyers will be sanctioned if they are unable to make substantial cuts to oil imports before the deadline. Japan has cut back its imports from 15 percent to 22 percent in the second half of last year, despite suffering from a setback from an earthquake, tsunami and following nuclear disaster. Along with Japan, EU nations like Belgium, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain and the United Kingdom have purchased oil from Iran but in restrained quantities to qualify for the exemption. Meanwhile, oil prices have dropped to a new three-month low after Saudi Arabia assured of a supply that would set off shortages. As U.S sees it, the sanctions are working since Iran’s currency has plunged and oil shipments have plummeted. Iran is the second largest producer of oil according to Organization of Petroleum Exporting Countries and for the most part its government is dependent on revenues from oil export. The author is a veteran journalist in oil related fields, who periodically writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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