The US State Department on Wednesday renewed six-month waivers on Iran sanctions for China, India and seven other economies in exchange for their agreeing to reduce purchases of oil from Iran.
“The United States and the international community stand shoulder to shoulder in maintaining pressure on the Iranian regime until it fully addresses concerns about its nuclear program,” secretary of state John Kerry said in a statement.
The waivers, which the State Department calls exceptions, mean that financial institutions in the consumer countries do not risk being cut off from the US financial system for the next six months.
Sanctions are one of Washington’s main strategies to choke funding to Iran’s nuclear program, which Western countries suspect seeks to develop the ability to make weapons. Iran says the program is for peaceful purposes.
State Department and Treasury officials have pushed consumer countries to “significantly reduce” their purchases of Iranian oil without defining the volumes that they want to be cut.
US and EU sanctions have cut Iran’s oil exports by about half since they went into force last year, helping to cut the value of the rial, the country’s currency, and pushing up inflation. This May the sanctions drove the Islamic Republic’s crude exports to their lowest level in decades, according to industry sources and tanker tracking data.
Despite the damage the sanctions have done to its economy, Iran’s government has foreign currency reserves worth tens of billions of dollars with which it can fund the nuclear program. There is little evidence the sanctions have slowed the program ahead of a presidential election in Iran next week.
President Barack Obama on Monday issued an executive order imposing sanctions on foreign financial institutions that facilitate deals in the rial, which has lost two-thirds of its dollar value since late 2011.
Lawmakers in Congress also hope to pass legislation this year that could further limit Iran’s oil sales and reduce Tehran’s access to its foreign currency accounts, mostly held in euros.
“The grounds for an exception are clearly too loose,” representative Eliot Engel, the top democrat on the House of Representatives Foreign Affairs Committee, said in a statement. He added the House could vote in coming weeks on legislation “to tighten the standards for granting exceptions.”
The other economies the State Department renewed waivers for were South Korea, Malaysia, Singapore, South Africa, Sri Lanka, Turkey and Taiwan. Japan and 10 EU countries got waivers earlier this year.