White House reimposes oil sanctions on Iran with little global support

US Secretary of State Mike Pompeo talks with South Korean Foreign Minister Kang Kyung-wha during their meeting at Foreign Ministry in Seoul

But sentiment turned negative after a report that several governments received waivers that would allow them to import some Iranian crude once US sanctions are imposed next week. Indian public refineries like Mangalore has also been buying Iranian oil but not in the numbers that they were earlier.

US President Donald Trump announced in May America's withdrawal from the Iran nuclear deal, warning that any countries or companies that conduct transactions with Tehran could face secondary sanctions.

Oil prices LCOc1 rallied this year to a four-year high above $85 per barrel on fears Washington may want to cut Iranian oil exports to zero.

He was responding to questions on the news reports from South Korea and India that they are getting waiver from the U.S. on the punitive Iranian sanctions.

Countries seeking waivers - in a process similar to that under former President Barack Obama - are expected to agree to substantially reduce their Iranian oil imports.

Pulling crude back down, however, was a report that several governments had received waivers that would still allow countries to import some Iranian crude once United States sanctions are reimposed from next week. At a U.N. Security Council meeting in September, Trump defended his administration's decision to pull out of the Obama-era deal, and blasted what he called a "horrible, one-sided deal [that] allowed Iran to continue its path toward a [nuclear] bomb and gave the regime a cash lifeline when they needed it the most".

That's symbolically important to the Trump administration because President Barack Obama's administration took three years to remove 1.2 million barrels from the market - and that was while acting in concert with the European Union and other nations before the global effort yielded the 2015 deal.

"The United States is in the midst of an internal process to consider significant reduction exceptions for individual countries, but that is only on a case-by-case basis", State Department's Deputy Spokesperson Robert Paladino told reporters.

"We will continue to discuss our Iran policy with our counterparts around the world and the implications of our re-imposition of sanctions previously lifted or waivered under the JCPOA", he said. "I think it's important that we not relax in the effort", he said.

"Maximum pressure means maximum pressure", he said.

"It's a virtual certainty that Western banks are not going to violate the escrow restrictions", said Mark Dubowitz, the chief executive of the Washington-based Foundation for Defense of Democracies who has advised Pompeo.

The rial currency has also sunk against the US dollar due to the sanctions threat, with a heavy demand for dollars among ordinary Iranians trying to protect their savings.

Pompeo said that he is convinced these sanctions are going to have an enormous impact on the Iranian leadership.

That's significantly lower than the peak of 2.7 million bpd in June this year, but still stubbornly high compared to some analyst estimates that the predicted sanctions could possibly choke off close to 2 million bpd of Iran's oil exports. The waivers will last for a six-month period and will be re-evaluated after that time is up. Iran used the funds to buy goods from India.

Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes - Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.

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