Iran President Mahmoud Ahmadi-Nejad (Left Third) visited Expo 2010 in Shanghai

While much of the world was watching the US Supreme Court’s ruling on President Obama’s healthcare law, US Secretary of State Hillary Clinton made an important announcement regarding US sanctions on Iran. China is exempted.

Waivers given to China and Singapore will exempt them from sanctions that would have went into effect today and cut their banks off from US financial systems as punishment for not making significant reductions in their purchases of Iranian oil.

Today, I have made the determination that two additional countries, China and Singapore, have significantly reduced their volume of crude oil purchases from Iran,” said Secretary Clinton. “As a result, I will report to the Congress that sanctions pursuant to…the National Defense Authorization Act (NDAA) for Fiscal Year 2012 will not be applied to their financial institutions for a potentially renewable period of 180 days.

India, Japan and Turkey have already been granted waivers and another major Iranian oil importer, South Korea, recently declared its intention to completely stop its purchases. Referring to these countries, Clinton said, “Their cumulative actions are a clear demonstration to Iran’s government that Iran’s continued violation of its international nuclear obligations carries an enormous economic cost.

Under legislation signed by Obama in December, the US must sanction countries that continue purchasing large quantities of Iranian oil through Iran’s Central Bank by cutting off their financial institutions involved in the transactions from the USA banking system.

On Sunday, a European oil embargo against Iran goes into effect as the West steps up efforts to thwart Iran’s determination to continue enriching uranium in defiance of UN resolutions. Analysts say these measures will cost Iran about $4 billion a month and deprive Tehran of 18 percent of its oil sales. Saudi Arabia and other major oil producers have been increasing output to keep the markets steady.

In fact, prices at the pump have fallen in the US over the past few weeks. Although US officials say the sanctions are having a devastating effect on Iran’s economy and point to them as the reason Iran was willing to return to talks with the five members of the UN Security Council and Germany, the so-called P5+1, skeptics point out that those talks ended without an agreement.

The next round of talks between Iran and West is scheduled for July 3 in Istanbul — but it is being held at the level of technical experts, rather than the weightier ministerial level. Clinton said that failure by Iran “to take concrete action toward resolving the nuclear issue” during those meetings “will result in continuing pressure and isolation from the international community.”

According to Mark Dubowitz, the advocate and head of the Foundation for Defense of Democracies, said he expected all of Iran’s other oil buyers would eventually get the exceptions.  He believes China has received some clandestine cargoes from Iran. Tehran has withheld the destination of some oil shipments by disabling tracking systems on its tanker fleet.

“The United States would be better off delaying a decision on China, he said, than to grant an exception now and be forced not to renew it later when more evidence of the shipments could come to light.”