Iran will reportedly continue doing business on SWIFT, and the USA administration will extend waivers to several countries allowing them to continue purchasing Iranian oil - a concession that was mulled earlier in September, sources said.
While US President Donald Trump and senior figures in Congress have pushed for harsher anti-Iranian sanctions, the State and Treasury Departments reportedly caved to pressure from European allies and Iran.
"While the gain in US crude inventories was in line with the market expectation, it's still a sixth consecutive week of increase on the back of rising American production", Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo.
The US has broadly agreed to grant India a waiver from Iran sanctions after the Indian side chose to cut oil imports from Tehran by about a third in 2018-19, sources familiar with the matter said, adding that an official announcement could be made over the next few days. "We will continue to engage with the USA and other stakeholders so that our energy security is not compromised", said MEA spokesperson Raveesh Kumar.
"India and the United States have broadly agreed on waiver".
Senior US State Department officials working on the Iran issue are said to have convinced Secretary of State Mike Pompeo to permit Iran to remain connected to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) global banking system, Washington Free Beacon reported, citing the sources familiar with the matter.
According to sources, Indian oil firms will have to reduce their imports significantly as a condition of the waiver.
In the first three weeks of October, Iran's crude and condensate exports averaged around 1.90-1.95 million bpd according to Platts ship tracking data, but exports could be even higher due to the Iranian tactic to switch off tracking devices to hide some volumes and destinations of its oil exports, sources say.
This would mean 1.25 million tonnes a month up to March 2019, the same as companies ordered for October and November, the source said. They still have to decide on how to split the quantum and on the form of payments, the source said.
"There are two downward pressures on global oil demand growth".
"The US may use waivers to slow walk implementation, but these will not apply indefinitely", he added.
During the negotiations, India also told the U.S. that it would like to import more American oil if it came on competitive terms, sources said. Currently, Iran provides its tankers as well as insurance for oil cargoes to India. The leader said it's possible Iran will face more hard times ahead, but asserted that the government will use all its power to reduce any problems.
Bolton's hint that Washington is preparing to grant some sanctions waivers came as a surprise, as he has been the most outspoken proponent of the toughest possible sanctions on Iran.
India prefers Iranian oil as it comes cheap and suits many refineries' technical configuration.