What next for Iran oil trade as US sanctions kick in?

After it reimposed sanctions on Tehran last year, the US issued a temporary waiver for six months for countries to continue buying oil from Iran. The waiver expires today.

The Trump administration says it will no longer exempt countries from US sanctions if they continue to buy Iranian oil, in a move that drew condemnation from Tehran as well as Iran's major oil importers, including China and Turkey.

Turkey enjoys good relations with Iran but the US move to go ahead with sanctions poses a new challenge for the country.

TRT World's Andrew Hopkins has more from the Turkish capital Ankara.

Iran vows to export oil despite US sanctions

Iranian President Hassan Rouhani said on Tuesday that Tehran would continue to export oil exports despite the US sanctions.

"We were subjected to cruel and illegal sanctions by the US, which especially affect workers, the middle and low-income groups," Rouhani said in the capital Tehran.

The Iranian president suggested a reduction in dependence on oil revenues and increase in non-oil national industry to cope with the economic sanctions.

"The US attempt to reduce Iranian oil exports to zero is a wrong and erroneous decision," Rouhani said. "We will not allow this decision to be implemented."

"Americans will see Iran continue to export oil," he vowed.

Iranian oil dilemma for Turkey and India

The US decision to end sanctions waivers that enabled several major economies to continue buying crude oil from Iran has put Turkey and India on the horns of a dilemma.

Both countries have significant energy dependence on Tehran.

For India, the decision came as a double whammy, as Washington has also imposed sanctions on its other top supplier, Venezuela. Also, the timing of the announcement came at a bad time – in the middle of national elections.

The next government will have to face its impact, as soon it takes over in the last week of May. Iran is India’s third-largest supplier of oil after Iraq and Saudi Arabia.

In Ankara, Turkey’s capital, Foreign Ministry spokesman Hami Aksoy said Turkey was trying to convince the US to allow its biggest oil importer, Tupras, to continue purchasing crude oil from Iran free of sanctions.

Since both Turkey and India were in the same boat, the impact of the end of US waivers for imports of Iranian oil was part of discussions between senior Turkish presidential advisor Ibrahim Kalin and India’s national security advisor Ajit Doval last week in New Delhi.

Indian officials, however, have indicated that they are gradually reducing their dependence on Iranian oil. Turkey, along with China, has, however, remained defiant.

“The Europeans have set up a mechanism for transaction and payment [to bypass US sanctions on Iran]. We are looking at it now. We will see either if we can join or come up with a similar mechanism,” Kalin told an Indian web portal.

Asked whether India had expressed any inclination to join such a mechanism during his talks, Kalin said: “No, I haven’t heard that ... But obviously, they [Indians] are not happy with the sanctions.”

He said while Turkey was looking at different options, it will continue to have trade with Iran. He asserted that the sanctions on Iran will backfire. “Iranians are remarkably resilient and have learned how to live under adverse conditions since 1979,” he added.