Oil prices fall on Iran sanction exemptions

South Korean refiners have reduced their oil imports from Iran since the U.S. pulled out of the Joint Comprehensive Plan of Action, a nuclear deal with Iran, in May. United Nations monitors say Iran still abides by the deal, in which it agreed to limit its uranium enrichment in return for the lifting of global sanctions. Gholamali Khoshroo called on Antonio Gooteresh to uphold the rule of law.

"These were billed as the strongest sanctions in history meant to prevent Iran from exporting any oil at all, but the reality hasn't quite lived up to its hype", RT producer Sayeh Tavangar says.

The sanctions end all the economic benefits America granted Tehran for its 2015 nuclear deal with world powers, though Iran for now continues to abide by the accord that saw it limit its enrichment of uranium.

The measures are part of a wider effort by U.S. President Donald Trump to curb Tehran's missile and nuclear programmes and diminish the Islamic Republic's influence in the Middle East, notably its support for proxies in Syria, Yemen and Lebanon.

He, however, emphasised that his effort to keep the oil prices down has nothing to do with Iran.

The sanctions are created to push Iran's exports to zero.

"We are in the war situation, " Rouhani said.

The Trump administration was caught between allies at home and overseas and the reality of global economics on Monday as it reinstated sanctions on Iran, was forced to carve out exemptions for important allies and back off on measures that could have been even more punishing for Tehran. "We have the toughest sanctions ever imposed but on oil, we want to go a little bit slower because I don't want to drive the oil prices in the world", he told reporters.

A new round of punishing sanctions on Iran's energy, banking and shipping sectors went into force overnight on Monday.

The new sanctions were lifted under the Obama administration's 2015 nuclear deal, which was also signed by the U.K., France, Germany, China, and Russian Federation.

In reinstating the measures, the Treasury Department imposed penalties on more than 700 Iranian and Iranian-linked individuals, entities, aircraft and vessels.

It also appeared that the US for the first time was directly sanctioning the Atomic Energy Organization of Iran, the government agency that oversees Iran's nuclear program.

The three countries combined produced more than 33 million barrels per day (bpd) for the first time in October, meaning they alone meet more than a third of the world's nearly 100 million bpd of crude oil consumption.

Washington gave 180-day exemptions to eight importers - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. Among those are 50 Iranian banks and subsidiaries, and more than 200 people and ships. All of them lobbied heavily to be granted the six-month exemptions while promising to further reduce or end their imports and Secretary of State Mike Pompeo said the waivers were based on the specific circumstances of each and the need "to ensure a well-supplied oil market". In September, there was no import of Iranian oil, according to the nation's state-run oil agency.

Iran is already in the grip of an economic crisis.

Pompeo said more than 20 countries have already cut their oil imports from Iran, reducing purchases by more than 1 million barrels per day.

"There are a lot of questions about the sanctions, about waivers", said Phil Flynn, analyst at Price Futures Group in Chicago.

  • Eleanor Harrison