US Secretary of State Hillary Clinton yesterday issued a statement reporting that she will report to Congress that an additional 7 countries have been added to a list of 11 that are already exempt from sanctions for buying crude oil from Iran. In March, the State Department exempted Japan and 10 Eurozone countries from the sanctions scheduled to take effect on July 1st.
In yesterday’s action, the State department added India, Malaysia, South Korea, South Africa, Sri Lank, Turkey, and Taiwan to the list of countries whose financial institutions will not be punished for doing business with Iran. Clinton’s statement referred to steps taken by each of these countries to reduce their oil purchases from Iran. As we noted yesterday, India has cut its Iranian imports by 10%. The exemptions are valid for six months and may be renewed.
The obvious absentee is China, which imports more crude oil from Iran than does any other country. China simply doesn’t need US permission to do what it wants. Partly that’s due to the country’s projected strength, but it’s also partly due to China’s monetary isolation. China doesn’t mind importing crude from Iran and paying for it in yuan because then Iran spends the yuan in China. Iranian oil is effectively free in China. India has made a similar deal with Iran, but not on the same scale as China.
The five permanent members of the United Nations Security Council — the US, the UK, Russia, China, and France — plus Germany make up the so-called ‘P5+1’ that have been attempting to negotiate a deal with Iran related to the Islamic Republic’s nuclear development program. The group is scheduled to meet with Iran again at the end of this month in Moscow to continue discussions.