Tag Archives: U.S. sanctions

Kim says ready to meet Trump ‘anytime,’ warns of ‘new path’

North Korean leader Kim Jong Un poses for photos in Pyongyang in this January 1, 2019 photo released by North Korea's Korean Central News Agency (KCNA). KCNA/via REUTERS.

By Hyonhee Shin and Soyoung Kim

SEOUL (Reuters) – North Korean leader Kim Jong Un said on Tuesday he is ready to meet U.S. President Donald Trump again anytime to achieve their common goal of denuclearizing the Korean Peninsula, but warned he may have to take an alternative path if U.S. sanctions and pressure against the country continued.

In a nationally televised New Year address, Kim said denuclearization was his “firm will” and North Korea had “declared at home and abroad that we would neither make and test nuclear weapons any longer nor use and proliferate them.”

Kim added that Pyongyang had “taken various practical measures” and if Washington responded “with trustworthy measures and corresponding practical actions … bilateral relations will develop wonderfully at a fast pace.”

“I am always ready to sit together with the U.S. president anytime in the future, and will work hard to produce results welcomed by the international community without fail,” Kim said.

However, he warned that North Korea might be “compelled to explore a new path” to defend its sovereignty if the United States “seeks to force something upon us unilaterally … and remains unchanged in its sanctions and pressure.”

It was not clear what Kim meant by “a new path,” but his comments are likely to further fuel skepticism over whether North Korea intends to give up a nuclear weapons program that it has long considered essential to its security.

In response to the news, Trump wrote on Twitter, “I also look forward to meeting with Chairman Kim who realizes so well that North Korea possesses great economic potential!”

There was no immediate comment from the White House. Asked for a reaction, a U.S. State Department official said: “We decline the opportunity to comment.”

South Korea’s presidential office, however, welcomed Kim’s speech, saying it carried his “firm will” to advance relations with Seoul and Washington.

Kim and Trump vowed to work toward denuclearization and build “lasting and stable” peace at their landmark summit in Singapore in June, but little progress has been made since.

Trump has said a second summit with Kim is likely in January or February, though he wrote on Twitter last month that he was “in no hurry.”

U.S. Secretary of State Mike Pompeo made several trips to Pyongyang last year but the two sides have yet to reschedule a meeting between him and senior North Korean official Kim Yong Chol after an abrupt cancellation in November.

Pyongyang has demanded Washington lift sanctions and declare an official end to the 1950-1953 Korean War in response to its initial, unilateral steps toward denuclearization, including dismantling its only known nuclear testing site and a key missile engine facility.

SANCTIONS

U.S. officials have said the extent of initial North Korean steps were not confirmed and could be easily reversed. Washington has halted some large-scale military exercises with Seoul to aid negotiations but has called for strict global sanctions enforcement on impoverished North Korea until its full, verifiable denuclearization.

Kim’s reference to pledges not to make nuclear weapons could indicate a first moratorium on such weapons production, although it was not clear if this was conditional. While Pyongyang conducted no nuclear or missile tests last year, satellite images have pointed to continued activity at related facilities.

The U.S. special representative for North Korea, Stephen Biegun, reiterated last month that Washington had no intention of easing sanctions but had agreed to help South Korea send flu medication to North Korea, saying such cooperation could help advance nuclear diplomacy.

Analysts said Kim’s message sent clear signals that North Korea was willing to stay in talks with Washington and Seoul this year – but on its own terms.

“North Korea seems determined in 2019 to receive some sort of sanctions relief … The challenge, however, is will Team Trump be willing to back away from its position of zero sanctions relief?” said Harry Kazianis of the Washington-based Centre for the National Interest.

“Kim’s remarks seem to suggest his patience with America is wearing thin.”

After racing toward the goal of developing a nuclear-tipped missile capable of hitting the United States in 2017, Kim used last year’s New Year speech to warn that “a nuclear button is always on the desk of my office” and order mass production of nuclear bombs and ballistic missiles.

But he also offered to send a delegation to the 2018 Winter Olympics in the South in February, setting off a flurry of diplomacy that included three summits with South Korean President Moon Jae-in, and the meeting with Trump in June.

This year, Kim said inter-Korean relations had entered a “completely new phase,” and offered to resume key inter-Korean economic projects banned under international and South Korean sanctions, without conditions.

(Reporting by Hyonhee Shin, Soyoung Kim and Hyunyoung Yi; Additional reporting by David Brunnstrom and David Shepardson in Washington; Editing by Stephen Coates and Paul Simao)

Under the radar: Iran’s oil exports harder to track as sanctions loom

FILE PHOTO: gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Gulf July 25, 2005. REUTERS/Raheb Homavandi/File Photo

By Alex Lawler and Ahmad Ghaddar

LONDON (Reuters) – According to Saudi Energy Minister Khalid al-Falih, no one has any idea how much oil Iran will be able to export after new U.S. sanctions against the Islamic Republic kick in on Nov. 4.

But more precisely, Iran’s shipment figures – crucial to oil markets – are already a mystery.

Iran’s oil exports are becoming harder to measure as ships switch off tracking systems, oil industry sources say, adding uncertainty over how far U.S. sanctions are scaring off buyers. The prospect of more oil heading into storage could make number-crunching even tougher.

Amid pressure from U.S. President Donald Trump to cool the price of oil, the lack of export clarity adds to the challenge for other OPEC members, chiefly top crude supplier Saudi Arabia, to make up for falling Iranian shipments.

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and estimates of its crude exports in October vary by more than 1 million barrels per day (bpd). That amount is enough to cover the oil demand of Turkey and move prices in the 100-million-bpd world market.

Before Trump’s May announcement of the sanctions, Iranian exports were above 2.5 million bpd.

Falih acknowledged the challenge in an interview with Russia’s TASS news agency published on Oct. 22. “Nobody has a clue what Iranian exports will be,” he said.

An Iranian oil official, asked how much crude Iran was exporting in October, declined to comment.

Oil prices have extended a rally on expectations the sanctions will test OPEC and other producers. Brent crude on Oct. 3 reached $86.74 a barrel, the highest since 2014, although it has since eased to $77.

While the Saudi minister may have been referring to what happens after sanctions kick in, the range of estimates of how much Iran is exporting now is already widening.

“A large set of numbers estimating Iranian October first-half exports have been thrown to the market these last few days, ranging for 1 million bpd to 2.2 million bpd, which is a massive spread,” Kpler, a data intelligence company, said.

According to Refinitiv Eikon data, Iran exported 1.55 million bpd in the first three weeks of October, higher than the 1.33 million bpd seen in the first two weeks of the month.

Kpler put Iranian exports at 1.85 million bpd in the first 24 days of October.

An industry source who also tracks the exports estimated a similar volume of 1.8 million bpd in the first half of October, including vessels not showing on satellite tracking. A second source initially agreed and later trimmed his figure to 1.65 million bpd through Oct. 22.

“It’s pretty high, I have to admit,” this source said of estimated exports in the first two weeks of the month. “It’s possible that there is a drop-off since.”

SIGNAL SWITCHED OFF

At any time, adjustments to tanker schedules and week-by-week variation complicate the task. While easier than in the past due to satellite information, the tracking of tankers is still both art and science.

Another element may be making this harder, industry sources say.

Tankers loading Iranian crude sometimes switch off their AIS signal, an automatic tracking system used on ships, only to switch it back on at a later stage of their journey, according to oil industry sources.

This could create a problem for ship-tracking services trying to pinpoint the exact date, or even the exact hour, on which a tanker loaded its crude cargo.

Neither Iran’s National Iranian Oil Co nor National Iranian Tanker Co responded to an emailed request for comment.

“Concretely, we are able to confirm loadings of vessels having shut down AIS transponders by other means such as satellite imagery or by tracking Iranian-flagged tugs, which has proven especially valuable given the lack of AIS coverage throughout much of the Gulf,” Kpler said.

Iran was believed by oil trading and shipping sources in 2012 to be hiding the destination of its oil sales by strategically switching off vessels’ tracking systems.

Attempts by Reuters to seek official Iranian comment on that development, both in 2012 and for this article, received no response.

Iran insists it will keep exporting oil and says the U.S. sanctions will ensure the market remains volatile.

“Iranian oil exports cannot be stopped,” Tasnim news agency quoted Oil Minister Bijan Zanganeh as saying on Oct. 23.

Iranian Vice President Eshaq Jahangiri said on Sunday: “Despite sanctions, Iran’s oil exports will not fall below a million barrels a day.”

OIL INTO ASIAN STORAGE?

As the number of buyers dwindles, a large volume of Iranian crude is set to arrive at China’s northeast Dalian port this month and in early November.

China intends to cut purchases in November. But Iran is undeterred, planning to send buyers such as India and China oil for storage rather than consumption, making it harder to measure how much oil is reaching the market, sources say.

Analysts, in assessing a producer’s supply of oil to the market, generally do not take into account crude moved into storage.

“We will give them oil even for our inventory there,” a source familiar with Iranian thinking said, referring to India. “The same we will do for China.”

The data seen to date suggests Iranian crude exports in October are still down from at least 2.5 million bpd in April, before Trump in May withdrew the United States from a nuclear deal with Iran and reimposed sanctions.

Exports dropped below 1.2 million bpd under previous sanctions that were lifted following that 2015 nuclear agreement.

While Washington has said it wants to cut Iran’s oil exports to zero, Iran and Saudi Arabia say that is unlikely. The Trump administration is considering waivers on sanctions for countries that are reducing their imports.

Iran says waivers will be granted allowing shipments to continue at a lower level, as it contends that Saudi Arabia and other producers cannot fully replace Iran’s crude exports.

“Waivers are expected, as Saudi Arabia and Russia cannot do it,” the source familiar with Iranian thinking said.

(Additional reporting by Rania El Gamal; editing by Dmitry Zhdannikov and Dale Hudson)

Netanyahu, in U.N. speech, claims secret Iranian nuclear site

Israeli Prime Minister Benjamin Netanyahu addresses the 73rd session of the United Nations General Assembly at U.N. headquarters in New York, U.S., September 27, 2018. REUTERS/Caitlin Ochs

By John Irish and Arshad Mohammed

UNITED NATIONS (Reuters) – Israeli Prime Minister Benjamin Netanyahu described on Thursday what he said was a secret atomic warehouse in Tehran and accused Europe of appeasing Iran as he sought to rally support for U.S. sanctions against the Islamic Republic.

Addressing the United Nations General Assembly, Netanyahu showed an aerial photograph of the Iranian capital marked with a red arrow and pointed to what he said was a previously secret warehouse holding nuclear-related material. He argued this showed Iran still sought to obtain nuclear weapons, despite its 2015 agreement with world powers to curb its program in exchange for loosening of sanctions.

Netanyahu spoke four-and-a-half months after U.S. President Donald Trump withdrew from the accord, arguing it did too little to rein in Tehran’s nuclear ambitions and triggering the resumption of U.S. economic sanctions on Iran.

Netanyahu said the site contained some 15 kilograms (33 pounds) of radioactive material that has since been moved called on the U.N. atomic agency to inspect the location immediately with Geiger counters.

“I am disclosing for the first time that Iran has another secret facility in Tehran, a secret atomic warehouse for storing massive amounts of equipment and materiel from Iran’s secret nuclear program,” Netanyahu said.

Iran did not immediately respond to Netanyahu’s allegations.

He did not identify the material or specifically suggest that Iran had actively violated the nuclear deal.

An outspoken opponent of the deal, Netanyahu has previously made allegations about Iran’s nuclear activities that are difficult or impossible to verify, including presenting a cartoon bomb to the General Assembly in 2012 warning of how close Tehran was to producing a nuclear device.

In April, Netanyahu presented what he said was evidence of a large secret archive of documents related to Iran’s clandestine nuclear weapons program at a different site in Tehran.

He said Israeli agents removed vast amounts of documents from that site. At the time, Iran said the documents were fake.

In a speech in which he said relatively little about efforts to achieve peace with the Palestinians, Netanyahu said Iran had since begun moving items out of the second site.

“Since we raided the atomic archive, they’ve been busy cleaning out the atomic warehouse. Just last month they removed 15 kilograms of radioactive material. You know what they did with it?” he said. “They took it out and they spread it around Tehran in an effort to hide the evidence.”

He said Iranian officials still had a lot of work to do because there were some 15 shipping containers full of nuclear-related equipment and materials stored at the second site.

“This site contained as much as 300 tonnes – 300 tonnes – of nuclear-related equipment and materiel,” he said.

Under the nuclear deal struck by Iran and six major powers – Britain, China, France, Germany, Russia and the United States – Tehran agreed to limit its nuclear program in return for relief from U.S. and other economic sanctions.

The International Atomic Agency (IAEA) has repeatedly said Tehran was abiding by its commitments to the deal, formally called the Joint Comprehensive Plan of Action (JCPOA), including in a document reviewed by Reuters on Aug. 30.

France, Britain, Germany, China, and Russia have stayed in the pact, vowing to save it despite the restoration of U.S. sanctions and this week discussing a barter mechanism they hope may allow Iran to circumvent the U.S. measures.

Netanyahu criticized Europe for doing so in unusually harsh language that evoked European nations’ initial failure to confront Nazi Germany in the 1930s.

“While the United States is confronting Iran with new sanctions, Europe and others are appeasing Iran by trying to help it bypass those new sanctions,” Netanyahu said.

A U.S. official, speaking on condition of anonymity, said the United States is aware of the facility Netanyahu announced and described it as a “warehouse” used to store “records and archives” from Iran’s nuclear program.

A second U.S. intelligence official called Netanyahu’s comments “somewhat misleading. First, we have known about this facility for some time, and it’s full of file cabinets and paper, not aluminum tubes for centrifuges, and second, so far as anyone knows, there is nothing in it that would allow Iran to break out of the JCPOA any faster than it otherwise could.”

The Israeli leader also lambasted Iran’s ballistic missile activity, identifying three locations near Beirut airport where he said Lebanon’s Hezbollah was converting missiles.

“In Lebanon, Iran is directing Hezbollah to build secret sites to convert inaccurate projectiles into precision-guided missiles, missiles that can target deep inside Israel within an accuracy of 10 meters (yards),” he said.

The IAEA, Iran and Hezbollah were not immediately available for comment.

The Israeli military released a video clip and photos of what it said were Hezbollah Shi’ite militia rocket building sites in Lebanon, shortly after Netanyahu’s address.

(Reporting by John Irish, Arshad Mohammed, Yara Bayoumy and Michelle Nichols at the United Nations, Jonathan Landay and John Walcott in Washington, Laila Bassam in Beirut, Francois Murphy in Vienna; Editing by James Dalgleish)

World Court hears Iran lawsuit to have U.S. sanctions lifted

By Stephanie van den Berg and Toby Sterling

THE HAGUE (Reuters) – Iranian lawyers asked the International Court of Justice on Monday to order the United States to lift sanctions imposed by the Trump administration against Tehran, but Washington described the suit as meritless.

At the start of a week of hearings in The Hague, the court’s president asked the United States to respect the outcome of the case that Iran filed in July. During their decades of animosity, both countries have ignored some rulings at the court.

Tehran’s suit says the U.S. sanctions, which are damaging the already weak Iranian economy, violate terms of a little-known friendship treaty between the two countries.

“The U.S. is publicly propagating a policy intended to damage as severely as possible Iran’s economy and Iranian national companies, and therefore inevitably Iranian nationals,” said Mohsen Mohebi, representing Iran. “This policy is plainly in violation of the 1955 Treaty of Amity.”

He said Iran had sought a diplomatic solution to the countries’ dispute but was rejected.

U.S. Secretary of State Mike Pompeo described Iran’s suit as “an attempt to interfere with the sovereign rights of the United States to take lawful actions, including re-imposition of sanctions, which are necessary to protect our national security”.

“We will vigorously defend against Iran’s meritless claims this week in The Hague,” he said in a statement.

A ruling is expected within a month, though no date has been set.

The ICJ is the United Nations tribunal for resolving international disputes. Its rulings are binding, but it has no power to enforce them.

U.S. President Donald Trump pulled out of a 2015 pact between Iran and major world powers under which sanctions were lifted in return for Tehran accepting curbs on its nuclear program. The Trump administration then announced unilateral plans to restore sanctions against Tehran.

Although Washington’s European allies protested against Trump’s move, most Western companies intend to adhere to the sanctions, preferring to lose business in Iran than be punished by the United States or barred from doing business there.

The United States and Iran have clashed at the court in the past since they became enemies after Iran’s 1979 Islamic Revolution. Iran ignored a 1980 U.S. suit at the ICJ over the seizure of American diplomats in Tehran, which the court found to be illegal.

In another suit and countersuit, the ICJ found that the 1955 treaty was still valid even though it was signed before the revolution. However, the court found in 2003 that neither actions by the United States against Iranian oil platforms nor Iranian attacks on American shipping violated the treaty.

(Writing by Toby Sterling; Editing by David Goodman, Peter Graff and David Stamp)

Iran threatens to hit U.S., Israel after Trump aide warns of ‘maximum pressure’

FILE PHOTO - Iranian cleric Ayatollah Seyed Ahmad Khatami delivers a sermon during Friday prayers in Tehran, Iran, May 26, 2017. TIMA via REUTERS

By Bozorgmehr Sharafedin and Dan Williams

LONDON/JERUSALEM (Reuters) – Iran warned on Wednesday it would hit U.S. and Israeli targets if it were attacked by the United States after President Donald Trump’s security adviser said Washington would exert maximum pressure on Tehran going beyond economic sanctions.

A U.S.-Iranian war of words has escalated since Trump withdrew Washington from the world powers’ nuclear deal with Iran in May, blasting it as flawed and reimposing sanctions to choke Iran’s economy and force it to renegotiate or change direction.

The U.S. turnaround, which scrapped a wary detente between Iran and the United States after decades of hostility, has drawn defiance from Tehran despite renewed unrest over economic privations and has unnerved other big powers where businesses have been debating whether to divest from Iran.

U.S. National Security Adviser John Bolton told Reuters the return of U.S. sanctions was having a strong effect on Iran’s economy and popular opinion.

“There should not be any doubt that the United States wants this resolved peacefully, but we are fully prepared for any contingency that Iran creates,” Bolton said during a visit to Israel, Iran’s enemy in the Middle East.

U.S. sanctions dusted off this month targeted Iran’s car industry, trade in gold and other precious metals, and purchases of U.S. dollars crucial to international financing and investment and trade relations. Farther-reaching sanctions are to follow in November on Iran’s banking sector and oil exports.

European powers have been scrambling to ensure Iran secures enough economic benefits to persuade it to stay in the deal. This has proven difficult, with many European firms keen to avoid financial penalties by the Trump administration.

“We expect that Europeans will see, as businesses all over Europe are seeing, that the choice between doing business with Iran or doing business with the United States is very clear to them,” Bolton said.

“So we will see what plays out in November. But (Trump) has made it very clear – his words – he wants maximum pressure on Iran, maximum pressure, and that is what is going on.”

Asked at a news conference later whether the United States had discussed any plans with ally Israel on how to capitalize on economic protests in Iran and if these posed any tangible threat to the Tehran government, Bolton said:

“Just to be clear, regime change in Iran is not American policy. But what we want is massive change in the regime’s behavior … We are going to do other things to put pressure on Iran as well, beyond economic sanctions.” He did not elaborate.

“PRICE OF WAR”

A senior Iranian cleric seen as close to Supreme Leader Ayatollah Ali Khamenei told worshippers at Eid holiday prayers in Tehran: “The price of a war with Iran is very high for America.

“They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted,” Ahmad Khatami said.

Iran’s Revolutionary Guards have said it could strike Israeli cities with missiles if it were threatened. Iran also has proxies in the region including Lebanon’s Hezbollah.

The Revolutionary Guards said on Wednesday they would continue increasing Iran’s defensive capabilities not surrender to U.S. pressure to scrap its ballistic missile program.

Last week, Khamenei – who has the ultimate say on Iranian policy – said the United States would avoid outright conflict because of Iranian military might.

“There will be no war…We have never started a war and they will not confront Iran militarily,” he said.

Trump’s campaign to isolate Iran and cripple its economy has put the old adversaries back on a collision course that European signatories to the nuclear accord fear will raise the risk of a broader Middle East war.

DEAL ‘SOFT ON IRAN’

Under the 2015 deal, Iran curbed its contested uranium enrichment program under U.N. monitoring and won an end to global sanctions in return.

Trump has condemned the deal as too soft on Tehran and would not stop it developing a nuclear bomb, though U.N. nuclear non-proliferation inspectors have repeatedly certified Iranian compliance with its terms.

Khatami, the prominent Iranian cleric, also said Trump’s offer of talks was unacceptable as he was demanding Tehran give up its ballistic missile program and scale back regional influence. Neither issue was covered by the 2015 agreement.

“Americans say you should accept what we say in the talks. So this is not negotiation, but dictatorship,” Mizan news agency quoted Khatami as saying.

Trump has said Iran must stop meddling in wars in Syria and Yemen, part of a foreign policy supporting regional allies in conflict with proxies of U.S.-backed Gulf Arab kingdoms.

Tehran has not given an inch to Trump’s pressure despite an economy beset by high unemployment and inflation and a rial currency that has lost half its value since April.

Thousands of Iranians have protested against price rises of some food items, a lack of jobs and state corruption. The protests over the cost of living have often turned into anti-government rallies.

“I think the effects, the economic effects certainly, are even stronger than we anticipated,” Bolton said.

“But Iranian activity in the region has continued to be belligerent: what they are doing in Iraq, what they are doing in Syria, what they are doing with Hezbollah in Lebanon, what they are doing in Yemen, what they have threatened to do in the Strait of Hormuz.”

The Strait is a strategic waterway for oil shipments which Iran’s Revolutionary Guards have threatened to block in response to Trump administration calls to ban all Iranian oil exports.

(Writing by Mark Heinrich; Editing by Janet Lawrence)

China defies U.S. pressure as EU parts ways with Iranian oil

A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi/File Photo

By Chen Aizhu and Florence Tan

BEIJING/SINGAPORE (Reuters) – China, seeking to skirt U.S. sanctions, will use oil tankers from Iran for its purchases of that country’s crude, throwing Tehran a lifeline while European companies such as France’s Total are walking away due to fear of reprisals from Washington.

The United States is trying to halt Iranian oil exports in an effort to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East.

China, which has cut imports of U.S. crude amid a trade war with Washington, has said it opposes unilateral sanctions and defended its commercial ties with Iran.

On Monday, sources told Reuters Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports.

The shift demonstrates that China, Iran’s biggest oil customer, wants to keep buying Iranian crude despite the sanctions, which were reimposed after the United States withdrew in May from a 2015 agreement to halt Iran’s nuclear program.

“The shift started very recently, and it was almost a simultaneous call from both sides,” said one source, a senior Beijing-based oil executive, who asked not to be identified as he is not allowed to speak publicly about commercial deals.

Tehran used a similar system between 2012 and 2016 to circumvent Western-led sanctions, which had curtailed exports by making it virtually impossible to obtain shipping insurance for business with Iran.

Iran, OPEC’s third-largest oil producer, relies on sales of crude to China, Japan, South Korea, India and the EU to generate the lion’s share of budget revenues and keep its economy afloat.

The United States has asked buyers of Iranian oil to cut imports from November. Japan, South Korea, India and most European countries have already slashed operations.

French oil major Total, previously one of the biggest European buyers of Iranian oil, has said it had no choice but to halt imports and abandon Iranian projects to safeguard its operations in the United States.

On Monday, Iranian Oil Minister Bijan Zanganeh said Total had officially left Iran’s South Pars gas project.

Total later confirmed it had notified the Iranian authorities of its withdrawal from South Pars after it failed to obtain a waiver from U.S. sanctions.

Iranian officials had earlier suggested China’s state-owned CNPC could take over Total’s stake and Zanganeh said the process to replace the French company was under way.

“As for the future of Total’s share, we have not been informed of an official CNPC position, but as we have always said, CNPC, a Chinese state-owned company, has the right to resume our participation if it decides so,” Total said in an emailed statement.

WALK AWAY

French President Emmanuel Macron has repeatedly called for safeguarding the Iranian nuclear deal and defended the interests of EU companies in Iran.

But most European companies have conceded that they would be forced to walk away from Tehran for fear of sanctions and losing access to operations that require U.S. dollars.

The first round of U.S. sanctions, which included cutting off Iran and any businesses that trade with it from the U.S. financial system, went into effect on Aug. 7.

A ban on Iranian oil purchases will start in November. Insurers, which are mainly U.S.- or European-based, have begun winding down their Iranian business to comply with the sanctions.

To safeguard their supplies, state oil trader Zhuhai Zhenrong Corp and Sinopec Group, Asia’s biggest refiner, have activated a clause in long-term supply agreements with National Iranian Oil Corp (NIOC) that allows them to use NITC-operated tankers, four sources with direct knowledge of the matter said.

The price for oil under the long-term deals has been changed to a delivered ex-ship basis from the previous free-on-board terms, meaning Iran will cover all costs and risks of delivering the crude as well as handling the insurance, they said.

In July, all 17 tankers chartered to carry oil from Iran to China were operated by NITC, according to shipping data on Thomson Reuters Eikon. In June, eight of 19 vessels chartered were Chinese-operated.

Last month, those tankers loaded about 23.8 million barrels of crude oil and condensate destined for China, or about 767,000 barrels per day (bpd). In June, the loadings were 19.8 million barrels, or 660,000 bpd.

In 2017, China imported an average of 623,000 bpd, according to customs data.

Sinopec declined to comment. A spokesperson for Nam Kwong Group, the parent of Zhenrong, declined to comment.

NIOC did not respond to an email seeking comment. An NITC spokesman said it would forward a request from Reuters for a comment to the country’s Ministry of Culture and Islamic Guidance.

It was not immediately clear how Iran would provide insurance for the Chinese oil purchases, worth some $1.5 billion a month. Insurance usually includes cover for the oil cargoes, third-party liability, and pollution.

(Additional reporting by Parisa Hafezi in Ankara and Cyril Altmeyer in Paris; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

Russia’s Putin, despite sanctions, still hopes for better U.S. ties

MOSCOW (Reuters) – Russian President Vladimir Putin still hopes to pull Moscow’s ties with Washington out of a deep crisis, but nobody will go into mourning if this ambition is not reciprocated by the United States, the Kremlin said on Monday.

Moscow is bracing itself for a slew of new U.S. sanctions despite Putin meeting U.S. President Donald Trump at a summit in Helsinki in July, an encounter both sides said went well.

Initial Russian triumphalism after the summit turned sour however as anger over what some U.S. lawmakers saw as an over deferential Trump performance galvanized a new sanctions push.

The U.S. State Department has said it will impose fresh sanctions by the end of this month, while bi-partisan legislation from senators calls for other curbs to be widened.

Moscow is also bracing itself for potential U.S. measures designed to frustrate its Nord Stream 2 gas pipeline project.

Kremlin spokesman Dmitry Peskov told reporters on a conference call that the new U.S. sanctions proposals were unfriendly, illegal and would harm world trade.

“Let’s wait and see what will happen, if anything,” said Peskov, saying any Russian response would be dictated by Russia’s own national interests.

“The Russian president is hoping for the best and, despite all this, wants to pull our bilateral ties out of the deep crisis they are in. He (Putin) still has that desire. But at the same time, nobody plans to go into mourning if our approach is not reciprocated by Washington.”

(Reporting by Tom Balmforth and Polina Ivanova; Editing by Andrew Osborn)

Russia reels, denounces new U.S. sanctions as illegal, unfriendly

FILE PHOTO: National flags of Russia and the U.S. fly at Vnukovo International Airport in Moscow, Russia April 11, 2017. REUTERS/Maxim Shemetov/File Photo

By Andrew Osborn

MOSCOW (Reuters) – Russia condemned a new round of U.S. sanctions as illegal on Thursday after news of the measures sent the rouble tumbling to two-year lows and sparked a wider asset sell-off over fears that Moscow was locked in a spiral of never-ending curbs by the West.

Moscow has been trying with mixed success to improve battered U.S.-Russia ties since Donald Trump won the White House in 2016, and Russia’s political elite was quick to chalk up a summit last month between Trump and Vladimir Putin as a victory.

But initial triumphalism swiftly turned sour as anger over what some U.S. lawmakers saw as an over deferential performance by Trump and his failure to confront Putin over Moscow’s alleged meddling in U.S. politics galvanized a new sanctions push.

Having bet heavily on improving ties with Washington via Trump, Moscow now finds that Trump is under mounting pressure from U.S. lawmakers to show he is tough on Russia ahead of mid-term elections.

In the latest broadside, the U.S. State Department said on Wednesday it would impose fresh sanctions by the month’s end after determining that Moscow had used a nerve agent against a former Russian double agent, Sergei Skripal, and his daughter, Yulia, in Britain, something Moscow denies.

In an early reaction, the Kremlin said the sanctions were illegal and unfriendly and that the U.S. move was at odds with the “constructive atmosphere” of Trump and Putin’s encounter in Helsinki.

The new sanctions come in two tranches. The first, which targets U.S. exports of sensitive national-security related goods, comes with deep exemptions and many of the items it covers have already been banned by previous restrictions.

However, the second tranche, activated after 90 days if Moscow fails to provide “reliable assurances” it will no longer use chemical weapons and allow on-site inspections by the United Nations or other international observer groups, is more serious.

NBC, citing U.S. officials, said the second tranche could include downgrading diplomatic relations, suspending the state airline Aeroflot’s ability to fly to the United States and cutting off nearly all exports and imports.

The State Department’s announcement fueled already worsening investor sentiment about the possible impact of more sanctions on Russian assets and the rouble at one point slid by over 1 percent against the dollar, hitting a two-year low, before recouping some of its losses.

The U.S. move also triggered a sell-off in Russian government bonds and the dollar-denominated RTS index fell to its lowest since April 11.

“There is local panic on the currency market,” BCS Brokerage said in a note. “At times, the number of those who want to ditch the rouble is becoming so high so there is not enough liquidity.”

ILLEGAL

The Kremlin said the new sanctions were “illegal and do not correspond to international law.”

“…Such decisions taken by the American side are absolutely unfriendly and can hardly be somehow associated with the constructive – not simple but constructive – atmosphere that there was at the last meeting of the two presidents,” Kremlin spokesman Dmitry Peskov said.

Washington had become an unpredictable player on the international stage, Peskov added, saying “anything could be expected” from it and that it was important that Russia’s financial system, which he described as stable, was prepared.

In a sign the Kremlin was not eager to escalate an already difficult situation however, Peskov said it was too early to talk about Russian countermeasures.

He criticized the U.S. decision to link the sanctions to the British nerve agent case, an incident the Kremlin has long cast as a Western plot to damage its reputation and provide a pretext for more sanctions.

Skripal, a former colonel in Russia’s GRU military intelligence service, and his 33-year-old daughter were found slumped unconscious on a bench in the southern English city of Salisbury in March after a liquid form of the Novichok type of nerve agent was applied to his home’s front door.

European countries and the United States expelled 100 Russian diplomats after the attack, in the strongest action by Trump against Russia since he came to office.

Konstantin Kosachyov, head of the upper house of parliament’s international affairs committee, was cited by the Interfax news agency as saying it looked like Washington was now behaving like “a police state.”

Dmitri Trenin, director of the Carnegie Moscow Center and a former colonel in the Russian army, said the State Department’s move looked like the latest salvo in what he called a hybrid war.

“Sanctions are the U.S. weapon of choice,” Trenin wrote on Twitter.

“They are not an instrument, but the policy itself. Russia will have to brace for more to come over the next several years, prepare for the worst and push back where it can.”

At variance with Moscow over Ukraine and Syria, Western sanctions have already drastically reduced Western involvement in Russian energy and commodities projects, including large-scale financing and exploration of hard-to-recover and deep water resources.

Proposed U.S. legislation prepared by several senators calls on Trump to widen the sanctions further to include virtually all Russian energy projects and effectively bar Western companies from any involvement in the country.

Introduced by Republican and Democratic senators last week in draft form, Senator Lindsey Graham, one of the measure’s lead sponsors, has called it “the sanctions bill from hell.”

(Additional reporting by Dmitry Zhdannikov, Tom Balmforth, Denis Pinchuk, Andrey Ostroukh; Editing by Richard Balmforth)

Russia’s Putin meets Iran Supreme Leader’s aide in Moscow: RIA

Russian President Vladimir Putin shakes hands with Ali Akbar Velayati, a top advisor to Iran's Supreme Leader Ayatollah Ali Khamenei, during their meeting at the Novo-Ogaryovo state residence outside Moscow, Russia July 12, 2018. Sputnik/Alexei Druzhinin/Kremlin via REUTERS

MOSCOW (Reuters) – Russian President Vladimir Putin met Ali Akbar Velayati, a top adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei, on Thursday in Moscow, RIA news agency reported, without providing any details.

Velayati hailed Iran’s ties with Russia on Wednesday as “strategic” and said he would deliver messages to Putin from Khamenei and Iran’s President Hassan Rouhani. His visit comes as Iran braces for renewed U.S. economic sanctions.

(Reporting by Maria Kiselyova; Writing by Kevin O’Flynn; Editing by Gareth Jones)

Iran vows to sell as much oil as it can despite U.S. sanctions

FILE PHOTO: Iranian Vice President Eshaq Jahangiri speaks during a news conference in Najaf, south of Baghdad, February 18, 2015. REUTERS/Alaa Al-Marjani/File Photo

LONDON (Reuters) – Iranian vice president Eshaq Jahangiri acknowledged on Tuesday that U.S. sanctions would hurt the economy but promised to “sell as much oil as we can” and protect its banking system.

Jahangiri said Washington was trying to stop Iran’s petrochemical, steel and copper exports, and to disrupt its ports and shipping services. “America seeks to reduce Iran’s oil sales, our vital source of income, to zero,” he said, according to Fars news agency.

President Donald Trump said in May he would pull the United States out of an international nuclear deal with Iran and reimpose U.S. sanctions. Washington later told countries they must stop buying Iranian oil from Nov. 4 or face financial consequences.

Jahangiri said it would be a mistake to think the U.S. “economic war” against Iran will have no impact, but added: “We will make Americans understand this year that they cannot stop Iranian oil sales.”

The U.S. ambassador to Berlin called on the government of Chancellor Angela Merkel to block an Iranian attempt to withdraw large sums of cash from bank accounts in Germany.

Iran’s foreign ministry and the central bank have taken measures to facilitate banking operations despite the U.S. sanctions, Jahangiri said without elaborating.

The Iranian oil ministry said last week that it exported 2.2 million barrels per day of crude oil in June. The figure is not significantly lower than exports of 2.4 million bpd in April and in May.

ECONOMIC WAR

European powers still support the 2015 deal, under which Tehran agreed to limit its nuclear development in exchange for international sanctions relief. They say they will do more to encourage their businesses to remain engaged with Iran, though a number of firms have already said they plan to pull out.

Foreign ministers from the five remaining signatory countries to the nuclear deal — Britain, France, Germany, China and Russia — offered a package of economic measures to Iran on Friday but Tehran said they did not go far enough.

“We think the Europeans will act in a way to meet the Iranian demands, but we should wait and see,” Jahangiri said.

The pressure on Iran came as Washington had launched an “economic war with China and even its allies”, he said, referring to trade tensions between the United States and many of its main trading partners.

Jahangiri also accused Washington of trying to use the economic pressure to provoke street protests in Iran.

A wave of anti-government demonstrations against economic hardship and alleged corruption engulfed cities across the country in late December and early January.

(Reporting by Bozorgmehr Sharafedin; Editing by John Stonestreet, Andrew Heavens and David Stamp)