Secretary of State Mike Pompeo on Sunday issued a thinly veiled warning to Russian Federation and China putting both countries on notice that it will suffer the consequences if they continue to purchase Iranian oil after USA economic sanctions on such exports snap back this week.
They could upset world oil markets, though the United States has granted temporary waivers to eight jurisdictions to continue importing Iranian oil. Experts predict oil exports will drop further in the near future. This could continue even in FY19.
The U.S. president abandoned the nuclear agreement in May, accusing Iran of violating the deal.
"All eyes will be on Iranian exports, whether there will be some cheating around U.S. sanctions, and on how quickly production will fall", said Riccardo Fabiani, an analyst for Energy Aspects. "Alternatively, we have asked other Opec countries to help us get our requirement of crude at better terms".
Among the targets are 92 entities owned or controlled by Ghadir Investment Company, which the U.S. government had previously identified as an investment firm with ties to the Execution of Iman Khomeini's Order, a state-owned enterprise under direct control of Iran's Supreme Leader.
China says it is conducting normal cooperation with Iran within framework of global law. They blamed Israel for the attack and both referenced Stuxnet, which destroyed thousands of centrifuges involved in Iran's contested nuclear program in 2011. We've been able to do that in a way that hasn't had a huge impact on crude oil prices. But New Delhi is keen to continue buying oil from its traditional ally.
However, some Iranians have taken to Twitter to vent their frustration with the regime, with the hashtag #Sorry_US_Embassy_Siege attracting more than 19,000 tweets.
India will revive a previous arrangement of making payments in an account in UCO Bank, which does not have worldwide exposure and is therefore not vulnerable to sanctions.
Rouhani separately said leaders from "four powers" met with Iran on the sidelines of the September meeting of the United Nations General Assembly to try to save the deal, including brokering a possible meeting with Trump. Also, the earlier practice of routing money for oil through UCO Bank and IDBI Bank may be explored. They will also add 300 new designations in Iran's oil, shipping, insurance and banking sectors. The waiver would be granted for six months period and then would be re-evaluated by the United States, Special US Representative on Iran, Brian Hook told reporters.
Under US law, exceptions can be granted for up to 180 days.
Also in its press release, the administration declared it is "providing fewer exceptions to sanctions than the last administration".
"The sanctions will force Iran's hand as Mike Pompeo argued that at the rate that the Iranian economy is declining, and protests are intensifying, it should be clear to the Iranian leadership that negotiations are the best way forward", said Dr. Albadr Al-Shateri, politics professor at the National Defense College in Abu Dhabi.
The European Union is not one of the recipients, according to Pompeo who said those who receive waivers "have made important moves towards getting to zero crude oil importation". While, oil futures were at $72.80 a barrel in London on Friday.