Asian buyers of Iranian oil are gaining confidence they will win U.S. consent for some imports to continue even after American sanctions snap back next month.

Major Iranian customers South Korea, India and Japan are in talks with Washington for waivers, highlighting the specific reasons they need to continue purchases, according to people familiar with the discussions. Despite the upbeat tone, the exemptions from the U.S. haven’t been finalized and may not end up being approved, they said, asking not to be identified because the negotiations are confidential.

The U.S. has so far insisted that all purchases from Iran must drop to zero in an effort to put pressure on the Islamic republic to negotiate a new nuclear deal, after President Donald Trump in May walked away from a 2015 pact negotiated by Barack Obama. Even before American sanctions take effect, the oil market has tightened beyond what the White House expected, briefly sending Brent crude to a four-year high over $85 a barrel.

If South Korea, India and Japan obtain waivers, it’s likely to be for lower imports than in the past with a commitment to continue reducing purchases over time.
“We evaluate waivers on a case by case basis,” said U.S. State Department spokeswoman Heather Nauert. But she cautioned that Washington wasn’t planning to provide blanket exemptions to Asian countries.

(Source: Bloomberg)