For the world's largest oil buyers, the imposition of US sanctions on Iran will be a case of Deja-vu.
Earlier this decade – before the crude oil market was shattered by a global oversupply before prices were shattered The biggest collapse in a generation and before US oil was shipped worldwide, the refineries in Asia had to resort to international financial measures to contain the nuclear program of the Islamic Republic.
By seeking exemptions and becoming creative with payments, they managed to buy limited quantities. Now that US President Donald Trump is renewing the sanctions on OPEC's third largest producer, they have to slow down their purchases. Here are some of the ways they have addressed the limitations the last time.
At the heart of the problem for Iran's largest clients was a bill [1
Nevertheless, the countries were granted exemptions from the US every 180 days – if they "significantly" reduced imports from the Islamic Republic. While a certain amount of discounts that would call buyers into question for exemption was not announced, a number of nations, including China, India and South Korea, received them. Iranian exports as well as their production declined until a 2015 agreement with the world powers that curtailed its nuclear program.
The US will continue its efforts to reduce Iranian crude oil sales during and after a 180-day mining period, but has once again opened the door for countries to seek "significant reduction exceptions "At the end of the period, when they reduce the volume of purchases in that time."
READ: US attempts to curb Iran oil quickly after scrapping deal
The US will curb every country's efforts "including the amount and percentage of reduction in purchases of Iranian crude oil, the termination of contracts for the future supply of Iranian crude oil and other measures showing a commitment to substantially reduce such purchases," according to the Ministry of Finance The US State Department wants to negotiate with the countries that are currently up close during the 180 days from the manufacturer
Countries such as China, now the world's largest oil importer, and India, where demand is growing faster than elsewhere, had repeatedly expressed disapproval of the US measures they took last effectively constrained Iran's crude oil imports, although broader United Nations sanctions did not.
China's crude oil trade with Iran did not violate UN Security Council resolutions or harm to the international community, and was "fully lawful and reasonable," the country's foreign ministry said in 2012, after it first made a list Their desire to oppose the US and drive purchases could be stronger this time, given the global trade frictions created by the TR ump administration guidelines. Moreover, the US withdrawal from the nuclear deal is one-sided, so the pressure may not be as strong as last time.
The benchmark oil prices rebound from their crash and rise to last year 2014, when global oversupply disappears and demand rises, Asian Refineries I welcome all the benefits offered by Iran to lure buyers despite the sanctions.
The Islamic Republic had 90 days credit for green purchases, at least three times the time of other producers, and Flexibility with notes provided Some refineries were offered and loaded when it was last under sanctions.
As China's crude oil production and exports rebounded in 2016, trying to recapture the lost share of the highly valued Asian market, Iran also offered a larger rebate on s of some of its oil compared to Saudi Arabia's for the first time in a decade.
Buyers were also affected in 2012 under the European Union restrictions on insurance of Iranian oil over 95 percent of the global tanker fleet, because the ships were subject to the laws of the region.
To circumvent this problem, nations such as India and Japan offered the ships state insurance to help carriers resume shipments from the Persian Gulf to face risks such as oil spills and collisions protect. In addition, the processors used tankers operated and covered by Iran to receive supplies.
In the current scenario, refineries could be spared the insurance hurdle, as European nations such as Britain and France cling to the nuclear agreement. The agreement was essential to curb Iran's nuclear program.
Currencies and Banks
To circumvent the US financial system, Asian buyers could also resort to currencies other than the dollar to pay Iran oil purchases. Payments can be made through local or foreign banks that have no close ties to America.
India initially paid Iran through a Turkish bank before it made payments via a domestic financial institution who were serving time penalties. The nation, along with China, attempted to circumvent the restrictions by trading Persian Gulf oil against local currencies and goods such as wheat, soybean meal and consumer goods.
– With the support of Heesu Lee