WASHINGTON – Reuters
The United States expects countries that buy oil from
Iran to further reduce their purchases if they want to avoid U.S. sanctions, a
State Department source said on Dec. 5.
"The law requires additional cuts so we expect
buyers to make additional cuts," a source at the State Department said
about the U.S.
sanctions law signed a year ago by President Barack
A Senate aide said the law's requirements of deeper
reductions every six months is clear.
"While I find it very hard to believe the U.S. State
Department didn't remind our Turkish partners that U.S. law requires them to
continue significantly reducing toward a permanent end to Iranian imports, U.S.
law stands whether they received a warning or not,"
said the aide, who did not want to be identified given the sensitivity of U.S.
talks with oil consumer countries.
Under that law, banks in countries that buy oil from Iran
can be cut off from the U.S. financial system unless the purchases are reduced.
China, India, South Korea, Turkey and other countries got
six-month "exceptions" to the sanctions in June for reducing oil
shipments from Iran. The law says the cuts have to be "significant"
but does not dictate how deep they must be.
The sanctions are designed to make it harder for Iran to
fund its nuclear program, which Washington suspects is enriching uranium to
levels that could be used in weapons, a charge Iran denies.
The architects of the sanctions legislation, Democratic
Senator Robert Menendez and Republican Senator Mark Kirk, have urged the White
House to require countries to reduce purchases by about 18 percent before
getting the next round of waivers.
The 18 percent level surfaced in March when the State
Department exempted Japan from sanctions, estimating that it had cut purchases
15 to 22 percent.
Carlos Pascual, the State Department's top energy
diplomat, and other U.S. officials have been having conversations with Iran's
top oil buyers as well as oil producers to see how the buyers can tap
alternative sources of oil.
The State Department is expected to decide by Dec. 8
whether it will extend the six-month exceptions to the sanctions given to
India, South Korea and other buyers of Iranian crude. The deadline for the
decision for China and Singapore comes later in the month.
A State Department fact sheet about the sanctions law
says the exceptions "can be renewed if the country continues to
significantly reduce its volume of crude oil purchases from Iran in each
subsequent 180-day period," implying cuts should be deepened every six
While the department expects countries to keep reducing
purchases, considerations such as seasonal demand and conditions in the market
enter into the equation. Some countries require more fuel in winter months, so
the department considers reductions over year-before levels, rather than
comparing them with cuts made in the last round.
Discussions the United States has with oil consuming
countries focus on long term supply, the State Department source said. The
department asks countries how they will cut purchases, rather demanding that
they cut by a certain percentage.
Turkey's oil minister said on Dec. 5 his country has not
received any new request from the United States to reduce its level of crude
purchases from Iran.
But the purchases seem to be falling. Turkish trade data
in November showed Turkey's crude imports from Iran fell by more than 30
percent in October as Ankara turned to Iraq and Saudi Arabia for supply.
Turkey got the June exception after it cut purchases by