NEW YORK (Dispatches) – The Trump administration is scaling back on their pledge to dry Iran’s export oil, potentially setting up another catalyst for lower crude prices later this year.
The administration’s special representative for Iran, Brian Hook, last weekend refused to say with certainty whether the White House will enforce sanctions more strictly on the Islamic Republic’s oil exports. Instead, he left the door open to extending exemptions that have allowed some of Iran’s biggest customers to continue importing its crude.
The administration’s decision in November to grant sanctions waivers to eight countries, including China and India, surprised the market and contributed to a three-month collapse in crude oil prices.
 "We are not looking to grant any waivers or exceptions to the import of Iranian crude,” Hook said during a panel at the Atlantic Council’s 2019 Global Energy Forum in Abu Dhabi last weekend.
However, pressed by CNBC’s Hadley Gamble on whether the administration would extend the waivers, Hook said he could not answer that question yet.
Hook’s remarks suggest that the administration’s decision will in part depend on the cost of crude when the six-month waivers expire around the start of May.
Hook said the Trump administration agreed to the waivers to prevent an oil shortage that would cause prices to surge.
The United States gave waivers to eight major clients of Iranian oil - China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey - after restoring energy sanctions in November.
However, Amos Hochstein, the former international energy envoy who ran Iran sanctions under the Obama administration, said the real reason Trump is giving the waivers is because he is unable to force the biggest customers of Iranian oil to stop buying oil from the country.
"There will 100 percent be exemptions in May," Hochstein said, adding that Trump’s refusal to do so would raise the prospect of the U.S. sanctioning Chinese and Indian companies and getting embroiled in yet another trade dispute.
"The reason for that is if you don't give an exemption and someone is importing, then you have to sanction them, and you probably don't want to sanction them," Hochstein said.
Asian buyers of Iranian oil have just overcome final hurdles to resuming shipments from the country, with first cargoes set to arrive in Japan as early as this month.