Wed, 22 May 2019

SINGAPORE - U.S. State Department officials say an announcement is to be made on Monday that waivers allowing companies to buy oil from Iran will be terminated.

The waivers were granted to a number of countries when the U.S. re-imposed sanctions after withdrawing from the 2015 international nuclear deal with Iran.

China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece all received waivers and are unlikely to be pleased to be told they will no longer be able to do business with Iran.

In a sign of what may be to come, oil prices soared by about 3% on Monday in anticipation of the announcement.

The Washington Post revealed the likelihood of the move on Sunday in a report by national security writer Josh Rogin, who quoted two unnamed State Department officials.

Reuters say they have checked with a State Department source, and confirm the story is accurate.

Last month Iran was the fourth-biggest producer in OPEC, pumping out 2.75 million barrels a day.

Analysts spoken to by Reuters were critical of the proposed end to the exemptions.

"This is not a good policy for Trump," Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corporation (JOGMEC) told the news agency, adding that "concerns over tightening global oil supply and lower excess production capacity are expected to bolster oil prices higher."

He added that OPEC’s leading producers "Saudi Arabia, the United Arab Emirates and Kuwait will need to boost output to cover the shortfall."

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