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Washington fears Moscow may play spoiler to US energy-related sanctions against Tehran

Washington fears Moscow may play spoiler to US energy-related sanctions against Tehran
The White House has warned Russia over potential help to Iran in bypassing US sanctions by buying up crude from the Islamic Republic and reselling the fuel as its own. The ban on Tehran’s oil exports will be enacted on November 4.

“Iran might be pushing the idea of Russia selling their oil on the world market to evade sanctions,” a senior US Administration official said as quoted by the Financial Times. “I would discourage Russia from even considering this. It would be in Russia’s best interests not to facilitate Iranian evasion of US sanctions.”

In May, the US administration scrapped a nuclear deal with Iran, clinched between the Islamic Republic and a broad alliance of world powers. Shortly after that US President Donald Trump announced Washington is re-imposing unilateral sanctions against Tehran, threatening secondary sanctions on nations and corporations that continue to do business with Iran.

The first batch of US sanctions, which came into force in early August, hit Iran's auto industry, carpets, metals trading, as well as access to US dollars. Further sanctions, due to take effect in less than two weeks, are set to hit the country’s oil and shipping sectors.

“Our goal remains to get to zero oil imports from Iran as quickly as possible, ideally by November 4. We are prepared to work with countries that are reducing their imports on a case-by-case basis,” the US official said, as quoted by the media.

Moscow, one of the signatories to the historic nuclear deal has been opposed to the US decision along with the remaining participant states, including China, UK, France, Germany and the European Union.

Last month, Russia and Iran agreed a deal allowing the Islamic Republic to evade the US ban on oil exports, claims Israel National News Hadashot. Iran would export crude oil to Russia via the Caspian Sea, Russia would refine the oil in its refineries and export the products worldwide, reported the media citing a document by the Israeli Foreign Ministry.

“Russia doesn't need the oil and it would be subject to sanctions,” Joe McMonigle, former chief of staff at the US Department of Energy who is now at Hedgeye Research told the FT. “So far US sanctions on Russia have been targeted but violating the Iran sanctions would come with big consequences.”

In an attempt to nullify Iranian oil exports, Washington has reportedly intensified political pressure on a number of countries, including US allies Japan and South Korea. On Sunday, US Treasury Secretary Steven Mnuchin warned that the White House would take a harder line against countries to get waivers on Iranian oil sanctions.

“I would expect that if we do give waivers it will be significantly larger reductions,” he said in an interview with Reuters. “I don’t expect we will get to zero in November, but I do expect we will eventually get to zero.”

“Oil prices have already gone up, so my expectation is that the oil market has anticipated what’s going on in the reductions. I believe the information is already reflected in the price of oil,” Mnuchin added.

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