Published: Thu, November 08, 2018
Business | By Tara Barton

Iran draws sting from oil prices

Iran draws sting from oil prices

The top U.S. diplomat has granted an exception to certain USA sanctions that will allow the India-led development of a port in Iran as part of a new transportation corridor created to boost Afghanistan's economy, a State Department spokesman said on Tuesday. Each of those countries has already demonstrated significant reductions of the purchase of Iranian crude over the past six months, and indeed two of those eight have already completely ended imports of Iranian crude and will not resume as long as the sanctions regime remains in place.

The U.S. spokesperson said that President Donald Trump's South Asia strategy was focused on economic growth for Afghanistan and a "close partnernship" with India and the U.S seeks to maintain a close relationship with both countries as they pursue a "policy of maximum pressure" against Iran.

In a major development, India has managed to keep Iran's Chabahar Port project outside the purview of the sanctions reimposed by the Trump administration on November 5.

The first phase of the strategically-located project was inaugurated in December past year.

The State Department said it was carving exemptions from its sanctions on Iran's economy for the development of Chabahar along with an attached railway project and Iranian petroleum shipments to Afghanistan. "We continue negotiations to get all of the nations to zero", said the Secretary of State.

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And the U.S., the official said, seeks to "build on our close relationships with both countries as we execute a policy of maximum pressure to change the Iranian regime's destabilising policies in the region and beyond".

Activities related to the development of the Chabahar port in Iran will be exempt from U.S sanctions that kicked in on Monday, following the 180 day cool-off period after the US withdrew from the Joint Comprehensive Plan of Action (JCPOA or "Iran Deal") in May this year. "Where Chabahar is critical to India's access to and assistance towards ensuring a stable Afghanistan, India's energy needs require a basket of energy suppliers", Pande said. "These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief".

India, Smith argued, "made a convincing case" that its principal interest in the port was to develop alternative infrastructure links to Afghanistan that bypass Pakistan, which also serves the USA national security interests.

The sanctions reimposed on Iran's oil exports - its main revenue source - and financial sector were triggered by US President Donald Trump's May 8 decision to abandon the 2015 worldwide deal created to block Tehran's development of nuclear weapons.

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