By Ahmad Ghaddar and Henning Gloystein
LONDON (Reuters) - Iran's oil exports could fall by as much as two-thirds by the end of the year because of new U.S. sanctions, putting oil markets under huge strain amid supply outages elsewhere in the world.
Washington initially planned to totally shut Iran out of global oil markets after President Donald Trump abandoned a deal that limited Iran's nuclear ambitions, demanding all other countries to stop buying its crude by November.
The United States has since somewhat eased its stance, saying that it may grant sanction waivers to some allies that are particularly reliant on Iranian supplies.
But most analysts still think the sanctions will significantly reduce Iran's crude oil exports with some of the worst case scenarios forecasting a two-thirds drop to only 700,000 barrels per day (bpd).
Energy consultancy Facts Global Energy (FGE) thinks Iran's crude exports could fall to only 700,000 bpd because of sanctions. Those exports would mainly go to China, with smaller shares going to India, Turkey and to other buyers with waivers.
Another 100,000 bpd of condensates could find their way to China, buyers with waivers and possibly to the United Arab Emirates and Korea, FGE says.
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China, the biggest single importer of Iranian oil at 650,000 bpd according to trade flow data in Thomson Reuters Eikon, may ignore U.S. sanctions and keep importing.
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India, which imported an average of 550,000 bpd of Iranian oil in the first half, has yet to make an official announcement. However, its state-owned refineries have been told to prepare to find alternative supplies should Washington grant it no waivers to sanctions.
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South Korea and Japan, which together imported around 370,000 bpd of Iranian crude during the first half of 2018, have said they would stop imports unless they get a U.S. waiver.
South Korea's imports of Iranian crude were down 40 percent in June from the same month a year ago, customs data shows.
Japan's biggest bank, MUFG Bank Ltd, will halt all Iran-related transactions to comply with the imposition of U.S. sanctions, according to a document seen by Reuters on Thursday.
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Europe accounted for the biggest chunk of Iran's oil exports in the first half of the year, with Italy and Turkey the top importers.
Several refiners already stopped their purchases of Iranian crude after Swiss lender Banque de Commerce et de Placements (BCP) said it would stop financing Iranian cargoes by June 30.
Refiners in Greece and Spain have already started slashing their imports of Iranian crude.
But key buyer Turkey said it would not cut off trade ties with Iran.