Countries like India would have to continue reducing oil imports from Iran despite a deal with the world powers over its controversial nuclear programme, according to a US fact sheet which also said Tehran would get a relief of $7 billion under the agreement.
Under the agreement reached in Geneva, Iran has committed to halt enrichment above five per cent, neutralise its stockpile of near-20 per cent uranium and halt progress on its enrichment capacity, to halt progress on the growth of its 3.5 per cent stockpile and committed to no further advances of its activities at Arak and to halt progress on its plutonium track.
In response, the US and five other major world powers have agreed to provide limited, temporary, targeted, and reversible relief while maintaining the vast bulk of the sanctions, including the oil, finance, and banking sanctions architecture.
"If Iran fails to meet its commitments, we will revoke the relief," the US fact sheet said.
"Sanctions affecting crude oil sales will continue to impose pressure on Iran's government. Working with our international partners, we have cut Iran's oil sales from 2.5 million barrels per day (bpd) in early 2012 to 1 million bpd today, denying Iran the ability to sell almost 1.5 million bpd," the fact sheet said.
"That's a loss of more than $80 billion since the beginning of 2012 that Iran will never be able to recoup. Under this first step, the EU crude oil ban will remain in effect and Iran will be held to approximately 1 million bpd in sales, resulting in continuing lost sales worth an additional $4 billion per month, every month, going forward," it said.
India has slashed import of crude oil from Iran by over 26.5 per cent in the financial year ended March 31 as US and European sanctions made it difficult to ship oil from the Persian Gulf nation.
India imported about 13.3 million tonnes of crude oil from Iran in 2012-13 fiscal, down from 18.1 million tones shipped in the previous financial year.
Oil sanctions alone will result in approximately $30 billion in lost revenues to Iran – or roughly $5 billion per month – compared to what Iran earned in a six month period in 2011, before these sanctions took effect.
Iran used to be India's second-largest supplier, but is now fifth or sixth. NSAThe US said the approximately $7 billion in relief is a fraction of the costs that Iran will continue to incur during this first phase under the sanctions that will remain in place.
The vast majority of Iran's approximately $100 billion in foreign exchange holdings are inaccessible or restricted by sanctions.
In the next six months, Iran's crude oil sales cannot increase. While Iran will be allowed access to $4.2 billion of its oil sales, nearly $15 billion of its revenues during this period will go into restricted overseas accounts.
"In summary, we expect the balance of Iran's money in restricted accounts overseas will actually increase, not decrease, under the terms of this deal," the US said.
Further sanctions affecting petroleum product exports to Iran, which result in billions of dollars of lost revenue, will remain in effect. The vast majority of Iran's approximately $100 billion in foreign exchange holdings remain inaccessible or restricted by the sanctions.
The P5+1 countries have committed not impose new nuclear-related sanctions for six months, if Iran abides by its commitments under this deal, to the extent permissible
within their political systems; and suspend certain sanctions on gold and precious metals, Iran's auto sector, and Iran’s petrochemical exports, potentially providing Iran approximately $1.5 billion in revenue.
It also agreed to license safety-related repairs and inspections inside Iran for certain Iranian airlines and allow purchases of Iranian oil to remain at their currently significantly reduced levels – levels that are 60 per cent less than two years ago. $4.2 billion from these sales will be allowed to be transferred in installments if, and as, Iran fulfills its commitments.
"The concessions Iran has committed to make as part of this first step will also provide us with increased transparency and intrusive monitoring of its nuclear programme. In the past, the concern has been expressed that Iran will use negotiations to buy time to advance their program," the US said.