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U.S. exempts seven countries from Iran oil penalties

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Citing progress in turning up the pressure on Iran to abandon its nuclear program, the Obama administration exempted seven countries from Iran oil sanctions after they significantly cut back their imports of Iranian oil.

The countries are India, Malaysia, South Korea, South Africa, Sri Lanka, Turkey and Taiwan. China, the leading importer of Iranian crude, and Singapore were notably absent from the exemptions.

"Today's announcement underscores the success of our sanctions implementation," Secretary of State Hillary Rodham Clinton said in a statement Monday. "By reducing Iran's oil sales, we are sending a decisive message to Iran's leaders: Until they take concrete actions to satisfy the concerns of the international community, they will continue to face increasing isolation and pressure."

In March, the U.S. acknowledged the first group of countries – Japan and 10 European Union nations – had significantly reduced their Iranian oil purchases and qualified for an exemption under the same sanctions law, meaning they won't be hit with penalties for a renewable 180-day period.

The Energy Information Administration estimates that Iran is exporting 1.2 to 1.8 million barrels of crude oil a day, down from an average 2.5 million barrels a day in 2011, according to a senior administration official.

The action is squeezing one of the regime's main revenue streams as it continues to reject international demands to demonstrate that its nuclear program is for energy production not aimed at producing nuclear weapons. The sanctions will only grow more severe in the weeks ahead; by the end of June Europe's embargo on Iranian oil is set to begin.

The international sanctions on foreign banks that continue to conduct business with Iran's central bank, which the Obama administration imposed over the last few months, has staunched the flow of exports out of Iran in a "steady, methodical way," an administration official told reporters on a conference call Monday.

"The fact that these countries are coming with us ... furthers the goal of our sanctions regime and demonstrates international unity," the official said.

China is now the only major importer of Iranian oil without a U.S. waiver. It has until June 28 to wean itself from Iranian oil or face the penalties

In late March, President Obama signed off on tough new sanctions hitting Iran's oil exports, after determining there is enough crude supplies in the world market that taking the step wouldn't harm U.S. allies or drive gas prices even higher.

The Obama administration is continuing to evaluate the sanctions impact on international oil prices and supplies and determined before Mrs. Clinton's Monday announcement that the embargo is not creating a problem.

"There currently appears to be sufficient supply of non-Iranian oil to permit foreign countries to significantly reduce their imports of Iranian oil, taking into account current estimates of demand, increased production by countries other than Iran, inventories of crude oil and petroleum products, and available strategic petroleum reserves," the White House said in a statement.

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