US to end Iranian sanctions exemptions

US President Donald Trump has announced that sanctions waivers for China, India, Japan, South Korea and Turkey, who have been importing some 1mn b/d of oil from Iran, will expire in May.

Trump had reinstated Iranian sanctions in November 2018 after abandoning a 2015 nuclear deal between Iran and six world powers, under which Iran agreed to limit its nuclear activities and allow international inspectors into the country in return for sanctions relief. Six-month waivers were granted to main buyers of Iranian crude – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece – to give them time to find alternative sources and avoid causing a global oil market shock.

Greece, Italy and Taiwan stopped importing Iranian oil soon thereafter, but the other countries asked for their waivers to be extended.

According to BBC reports, the sanctions have led to a sharp downturn in Iran's economy, pushing the value of its currency to record lows, quadrupling its annual inflation rate, driving away foreign investors, and triggering protests.

Crude oil prices jumped by 3% after the US government announced it was planning to stop the exemptions from Iranian oil sanctions. US Secretary of State Mike Pompeo is reported to have said that Saudi Arabia and the United Arab Emirates are expected to boost supply to stabilise prices.