Iran Oil
A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005 [Representational Image].Reuters

The United States has announced the termination of all waivers provided to eight nations, including India, to import Iranian oil without any sanctions. The decision by the Trump administration has been taken to further squeeze the finances of Iran which is under huge pressure to shut down its nuclear weapons and ballistic missile programmes. The US officials expect the zero-waivers policy to make a significant dent in Iran's gross domestic product, which has expanded since the nuclear accord took effect in 2016.

The sanctions on Iran has resulted in oil supply shortage across the globe and sharp increase in prices but the US has claimed that it is coordinating with leading oil exporter Saudi Arabia and the United Arab Emirates to ensure that the market is "adequately supplied". In a statement issued on Monday, the White House said, "President Donald J Trump has decided not to reissue Significant Reduction Exceptions [SREs - as the waivers are called] when they expire in early May. This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue."

According to Hindustan Times, Indian oil companies are unlikely to completely stop oil imports from Iran which has been its major supplier in recent years. One of the sources close to the development said, "Even in past, despite US sanctions, Indian refiners continued to import crude oil from Iran, although in a reduced quantity." The sources further added that the external affairs ministry is yet to make a formal statement on the issue and it is because of this reason India is exploring ways to engage with the US to eventually continue receiving the waiver.

Iran oil import
The US reimposed sanctions in November on exports of Iranian oil after Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.Reuters

The countries or any private company violating the US sanctions may face secondary sanctions which possibly mean a block from accessing the US financial system. They could also be blocked from trading with the US and conducting trade with other countries in US dollars. However, it is still unclear how the countries will operate if they already have made payments in advance.

It is to be noted that India was among eight nations which were granted waivers from US sanctions on Iran. The countries included China, Japan, South Korea, Turkey, Taiwan, Italy and Greece. Three of the eight countries Italy, Greece and Taiwan stopped importing oil from Iran since November last year.