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Secretary of State Mike Pompeo listens during a cabinet meeting with U.S. President Donald Trump in the Cabinet Room of the White House, July 18, 2018 in Washington, DC. 

The Trump administration will grant eight jurisdictions special exceptions to continue importing oil from Iran after U.S. sanctions on the country snap back into place on Monday, according to cabinet members.

President Donald Trump gave oil buyers 180 days to wind down purchases of Iranian crude when he pulled out of the Iran nuclear deal in May. The eight waivers will allow the jurisdictions to more gradually reduce their purchases after the Nov. 4 deadline.

Oil market watchers have been closely monitoring the situation to determine how forcefully the Trump administration will enforce the sanctions. State Department officials initially said importers must cut their purchases to zero by November, but administration officials subsequently telegraphed that some exceptions would be made.

Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on Friday declined to name the eight jurisdictions during a conference call with reporters. The officials said all of the countries or territories have significantly reduced their purchases and will be given more time to further reduce their imports.

Two of the countries have almost entirely stopped buying Iranian oil, and could be to zero within a few weeks, Pompeo said.

Japan, India and South Korea are among the countries, and China is still negotiating a waiver, Bloomberg News reported earlier on Friday, citing a senior administration official. Pompeo confirmed on Friday that the European Union is not one of the jurisdictions that will receive a waiver.

The sanctions on Iran’s energy sector, shipping, ship-building and financial industries will officially go back into effect after 11:59 p.m. ET on Sunday.

Pompeo said the threat of sanctions will have cut Iranian oil exports by more than 1 million barrels per day by the time they are officially restored on Monday. That is larger than many analysts initially expected.

“We exceeded our expectations for one simple reason: Maximum pressure means maximum pressure,” he told reporters.

The sanctions were first implemented by the Obama administration to exert pressure on Iran’s leadership to negotiate limits on its nuclear program. The United States — along with Britain, China, France, Germany and Russia — clinched a deal with Iran in 2015 that paved the way for sanctions relief the following year.

The Trump administration says the deal was flawed and is refusing to abide by it. It is restoring the sanctions in an effort to convince Iran to concede to a list of 12 demands.

Tom DiChristopher CNBC


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