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Iran Devises Plan to Keep Oil Trade as 2nd Wave of US Sanctions Nears - Reports

© AFP 2023 / ATTA KENAREAn oil tanker is seen off the port of Bandar Abbas, southern Iran (File)
An oil tanker is seen off the port of Bandar Abbas, southern Iran (File) - Sputnik International
The US wants Iran’s oil exports to drop to zero and has threatened secondary sanctions on any country that continues to buy oil from the Islamic Republic.

With the second wave of US sanctions targeting its oil exports less than a month away, Iran is looking for creative ways to get around the sanctions and keep its oil export business alive.

One way of doing this is to revive the practice Tehran resorted to until 2015 when it allowed “middlemen” to buy Iranian crude through a domestic energy exchange, or “bourse” and resell it under the guise of “private business.”

Haiyang Shiyou oil rig 981, the first deep-water drilling rig developed in China, is pictured at 320 kilometers (200 miles) southeast of Hong Kong in the South China Sea. - Sputnik International
Chinese Increase in Iran Oil Imports Could Offset Impact of US Sanctions - Novak
The “bourse” has not traded oil since the Islamic Republic and international mediators inked a deal in 2015 whereby Iran agreed to roll up its nuclear program in exchange for the lifting of hard-hitting international sanctions.

Tehran has been encouraged by the 2015 nuclear deal signatories Britain, France and Germany, who are going to set up a financial mechanism to help Iran to continue to export oil to Europe and Asia.

“European governments’ support umbrella will embolden companies — in particular those which do not have interests in the US such as small- and medium-sized companies — to help Iran sell crude,” insisted Mohammad Ali Khatibi, who was in charge of selling crude under the previous sanctions in 2011 and 2012.

“This era [of sanctions on Iran’s oil] is not going to last too long. In the worst-case scenario we will sell at least 1 million bpd,” he added.

Iran is also pinning great hopes on China which continues to buy Iranian oil, amid its ongoing trade spat with the US.

Although expected to scale down its imports of Iranian crude to please Washington, India, which is the second largest buyer of Iranian oil after China, will hardly cease them altogether.

Tehran also believes that, despite strong US pressure, Saudi Arabia will not be able to completely compensate for a decline in oil supply from Iran.

Apart from oil exports, Iran is considering other options in its bid to secure foreign currencies. Last week it decided to grant residency permits to foreign nationals who invest $250,000 in the country.

Still, the threat of US sanctions has already forced many foreign oil companies, such as France’s Total, to stop doing business with Iran.

The lifting of international sanctions following the signing of the landmark nuclear accord in 2015 has helped Iran to more than double its oil exports, revive the economy and curb inflation.

READ MORE: Chinese Increase in Iran Oil Imports Could Offset Impact of US Sanctions — Novak

On May 8, President Donald Trump said he was withdrawing the US from the 2015 nuclear agreement with Tehran and promised to impose the “highest level” of sanctions on the country’s energy petrochemical and financial sectors despite objections from Europe as well as Russia and China — the other parties to the deal, known as the Joint Comprehensive Plan of Action (JCPOA).

Washington also warned countries to stop buying Iranian oil from November 4 and threatened to use sanctions against those who do not.

The first wave of US sanctions on Iran took effect on August 6, targeting the country’s automotive sector, trade in gold, and other vital metals.

The remaining sanctions will take effect on November 4 targeting Tehran’s energy sector, petroleum-based transactions, and transactions with Iran’s Central Bank.

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