US renews Iran sanctions, grants oil waivers to China, seven others

A customer looks at items in an electronics shopping mall in downtown Tehran, Iran. (AP)
Updated 05 November 2018

US renews Iran sanctions, grants oil waivers to China, seven others

  • US reimposes sanctions on Iran’s oil, banking sectors
  • Washington grants oil waivers to eight countries

WASHINGTON: The US snapped sanctions back in place on Monday to choke off Iran’s oil and shipping industries, while temporarily allowing top customers such as China and India to keep buying crude from the Islamic Republic.
Having abandoned a 2015 Iran nuclear deal, US President Donald Trump is trying to cripple Iran’s oil-dependent economy and force Tehran to quash not only its nuclear ambitions and its ballistic missile program but also its support for militant proxies in Syria, Yemen, Lebanon and other parts of the Middle East.
Earlier, Iranian President Hassan Rouhani said Iran would to continue to sell its oil despite Washington’s “economic war.” Foreign Minister Mohammad Javad Zarif said US “bullying” was backfiring by making Washington more isolated, a reference to other world powers opposed to the initiative.
Washington has pledged to eventually halt all purchases of crude oil from Iran globally but for now it said eight countries — China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey — can continue imports without penalty. Crude exports contribute one-third of Iran’s government revenues.
“More than 20 importing nations have zeroed out their imports of crude oil already, taking more than 1 million barrels of crude per day off the market,” US Secretary of State Mike Pompeo told reporters in a briefing. “The regime to date since May has lost over $2.5 billion in oil revenue.”
Pompeo said the waivers were issued to countries that have already cut purchases of Iranian crude over the past six months, and to “ensure a well-supplied oil market.”
US officials have said the countries given temporary exemptions will deposit revenue in escrow accounts for Tehran to use solely for humanitarian purposes. The exemptions are usually designed to last up to 180 days.
Iran’s exports peaked at 2.8 million barrels per day (bpd) in April, including 300,000 bpd of condensate, a lighter form of oil that when underground tends to exist as gas. Overall exports have fallen to 1.8 million bpd since then, according to energy consultancy Wood Mackenzie, which expects volumes to drop further to 1 million bpd.
“This is only the beginning of the Iranian production curtailment story, not the end,” said Michael Tran, commodity strategist at RBC Capital Markets. “The market was previously overly focused on the number of countries receiving exemptions on imports from Iran. The Trump administration has made it clear that further reductions must be made over the coming months.”
Oil prices rallied above $85 per barrel in October on fears of a steep decline in Iranian exports. Prices have fallen since then on expectations that some buyers would receive exemptions and as supply from the world’s largest producers has increased.
On Monday, international benchmark Brent crude oil futures were up nearly 0.6 percent to $73.23 a barrel and US crude futures were up 0.4 percent at $63.39 a barrel.
The sanctions also cover 50 Iranian banks and subsidiaries, more than 200 people and vessels in its shipping sector, Tehran’s national airline, Iran Air, and more than 65 of its aircraft, a US Treasury statement said.
They include more corporate entities and individuals compared with sanctions imposed on Iran during the tenure of President Barack Obama, Trump’s predecessor.
“We’ve said for a long time: Zero should mean zero,” John Bolton, White House National Security adviser told Fox Business Network in an interview. “These are not permanent waivers — no way, we’re going to do everything we can to squeeze Iran hard.”
Oil markets have been anticipating the sanctions for months and the world’s biggest producers have been increasing output.
Joint output from the world’s top producers — Russia, the US and Saudi Arabia — in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.


Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

Updated 17 October 2019

Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.