The US has agreed to let eight countries including India and Japan to continue buying oil from Iran after the reimposed sanctions on the oil producer kick-in next week, as per a Bloomberg report citing sources that do not wish to be identified.

The other two countries that were named in the report were China and South Korea, however, the terms of the waiver for the former is still in discussions, it said.

The US administration is in a delicate situation where it has to maintain a balance so as to not spike up the international oil prices (as it did in the month of September) due to concerns over shortage in global supply after countries stop buying from Iran (the third largest OPEC oil producer) and also make sure that Iran does not make enough revenue to make the sanctions irrelevant. Washington earlier said that their expectation was that importers from Iran would be reduced to zero.

China and India are highly dependant on Iran for its oil supply with the former being the leading importer of their oil in the world.

Crude oil prices eased in the month of October after major oil producers like Saudi Arabia and Russia agreed to increase their output it the future to make up for the deficit from Iran. There were also speculations that some countries would receive a waiver on the sanctions.

The report further said that the waiver is just temporary relief from the US administration that expects the nations dependant on Iran to gradually reduce their purchases in the months to come.

What do the US sanctions on Iran mean?

Over the years, the US sanctions have taken a toll on Iran's economy. Since 1979, the US made use of the sanctions to influence Iran's policies like the uranium enrichment program that the Western countries fear is being developed to produce nuclear weapons. Iran, however, has said that it has been using the program for internal purposes of civilian development like producing electricity and medical use.

In 2015, under the Obama administration, it was agreed that most of the sanctions would be lifted if the oil producer would limit its nuclear programs for at least 10 years. They were discontinued as a result on 16 January 2016.

President Donald Trump, 6 months after being elected, backed out of the 2015 nuclear deal. As of 7 August 2018, sanctions were reimposed and Iran was prohibited from purchasing US sanctions and precious metals. In addition, US nationals and its entities were not allowed to carry on business with Iran. There were also similar prohibition pressures being placed on other countries, who would face similar alienation from the US-dominated global financial system.

The countries that will be receiving the waivers will be allowed to pay for the oil using escrow accounts in their local currency, which will help the US to regulate the revenues that Iran receives and only allow them to be used to buy food, medicines and other non-sanctioned goods from its customers. This way, the US will be able to continue constraining Iran's economy.