South Korea has become the last country to suspend Iranian oil imports in response to demands by the United States. The Korean boycott comes in line with a new wave of US economic sanctions imposed on Tehran.
While the number of countries suspending Iranian oil imports is on the increase, Iran continues to pretend that the sanctions are causing no harm to its economy.
The Iranian economy, Tehran says, will be able to overcome the effects of the US sanctions, thanks to a series of precautionary measures it took in preparation for these sanctions.
The first group of sanctions was imposed on Iran in August. It sought to prevent the delivery of the US currency to Iran, prevent the Islamic Republic from trading in gold and car spare parts.
Countries maintaining Iranian oil imports work now to adapt before the second group of sanctions is implemented in November. This group will target the Iranian energy sector and prevent the Islamic Republic from selling its oil in international markets.
Iran faces a number of economy challenges, amid growing public anger and increasing protests. The Iranian national currency is also losing a lot of value against the US dollar. Oil export revenues are also expected to fall down dramatically when the second group of sanctions is implemented in November.
China benefiting from sanctions
Malaysia and Japan are among a group of countries openly suspending Iranian oil import. Other countries are trying to reduce oil imports from Iran. In doing this, these counties seek to please the administration of US President Donald Trump, even as they are not severing ties with Iran in full. India, the second largest international importer of Iranian oil, is doing this.
Nonetheless, China, the largest importer of Iranian oil, says it will not abide by the US-imposed sanctions. Turkey is going the same.
Bloomberg quoted some Indian officials as saying that their country would work to reduce the importation of oil from Iran. India, they added, would try to get an exemption from the US so that it could maintain a low level of imports. New Delhi said it would not be able to totally boycott Iranian oil.
Chairman of the Indian Oil Corporation Sanjeev Singh said his corporation would buy oil in the light of previously signed annual deals. He added that the corporation had already bought oil shipments that would arrive in December.
India is believed to have imported 22.6 million of barrels of Iranian oil in the 12 months until March 31, compared to 27.2 million barrels in the corresponding period last year.
Iran is the third largest exporter of oil to India, after Iraq and Saudi Arabia. The Islamic Republic contributes almost 10% of all the oil used by India every year.
Turkey’s Minister of Energy and Natural Resources, Fatih Donmez, said his country would continue to import natural gas from Iran, in the light of a long-term deal between his country and the Islamic Republic. The agreement, he said, would last until 2026.
Turkey imported 176,000 barrels of Iranian oil every day during the first half of this year. It is the world’s fifth largest importer of Iranian oil.
In August, Reuters quoted Chinese officials as describing relations between Beijing and Tehran as “open”, “transparent” and “legitimate”.
They added that China opposed all unilateral and long-term sanctions.
Chinese Iranian oil imports have been on the increase during the past decade. China imports between 500,000 and 650,000 barrels from Iran every day. A decade ago, China imported 250,000 barrels of oil only from Iran every day.