How did hawks triumph over Trump's advisers and impose sanctions on Iran?

WASHINGTON (Reuters) - US President Donald Trump's unexpected decision to ban all purchases of Iranian oil after May 1, which ended eight-nation exemptions, came after US economic hawkish advisers and security advisers eased the president's worries about rising oil prices, according to three sources.

The unprecedented move to cut Tehran's financial lifeline completely highlights the powerful influence of hard-lineers within the Trump National Security Council, two of whom said they were the biggest advocates of the resolution.

For months, they called for tougher sanctions in the face of opposition from some State Department officials who would have preferred to allow some partners and allies to continue to buy Iranian oil.

The move was settled days before it was announced on 22 April.

"No one has actually tried to push it to stop exports completely," a senior administration official said, adding that consensus among government departments needed "a lot of work."

Face Iran
Trump has been keen to stop Iranian oil exports since sanctions were imposed on Tehran in November for the first time since 2015, a move aimed at punishing Iran, but initially supported a slow approach and granted exemptions to allies and trade partners such as China, India and Turkey.

The United States now rules out about 2 million barrels of oil a day of global supplies due to sanctions on the oil sectors in Iran and Venezuela, but Washington hopes that high oil production - now at its highest level ever after 12 million barrels per day - In global markets, and keep prices low.

The sources, who asked not to be named, said that on April 20, as the May 1 deadline expired, senior economic and security advisers Trump convinced the time had come to stop Iranian oil exports altogether.

Two sources said the NSC played an important role in steering the debate towards ending exemptions, particularly Richard Goldberg, a new member of the administration who has long advocated a policy of confrontation with Iran.

Legal loophole
National Security Adviser John Bolton, Goldberg, joined the National Security Council this year. He had previously served as an adviser to the Defense Democracies Foundation, headed by Mark Dubowitz, who was a staunch supporter of sanctions against Iran under former President Barack Obama.

In 2012, Goldberg was an aide to Republican Senator Mark Merk, who struck Iran with legislation to close the last legal loophole that would allow Iran to sell its oil under Obama's sanctions.

The legislation targeted Swift's financial messaging system - the headquarters of Belgium - where Iran had been conducting a multi-billion dollar oil trade.

A senior administration official said Kevin Hast and Larry Kaddlow, the White House's economic advisers, also called for an end to the exemptions.

Trump discussed the matter with Bolton, Treasury Secretary Stephen Menuchin, Energy Secretary Rick Perry and Foreign Secretary Mike Pompeo.

The sources said that while Bolton and Perry supported the termination of the exemptions, some in the State Department again pointed to fears of a possible rise in oil prices, but eventually withdrew their objections and supported a tougher policy toward Iran.

At the same time, the State Department held talks with at least five of the eight countries that granted exemptions - China, India, South Korea, Japan and Turkey, the sources said.

A surprise decision
The US decision stunned several US allies and Iranian oil buyers, and the Chinese Foreign Ministry lodged a formal complaint with the United States.

Separately, Reuters met with diplomats from at least two of Iran's top oil importers and said discussions on the renewal of exemptions continued until a few days before the suspension was announced, suggesting that the State Department had only a short time to report Partners by decision.

Oil prices rose to a six-month high after the announcement, but then fell.

Trump was concerned that high oil prices would hurt the US economy and raise gasoline prices, and in another tweet before the waiver decision, he said global oil markets were "fragile."

Members of the Organization of the Petroleum Exporting Countries (OPEC) were asked to increase production to offset supply shortages from Iran and Venezuela.

"This is clearly what was balanced in his mind," the administration official said.

A senior administration official said Trump had recently consulted Saudi and UAE leaders on oil prices and received assurances that the two countries would ensure sufficient supply in the market.

The Saudi energy minister responded by saying he saw no need to increase production immediately. OPEC figures show that OPEC output fell 1.6 million bpd between December and March.

Time is right
The Trump administration - which imposed sanctions on Iran in 2012 in an effort to thwart its nuclear ambitions - has kept exemptions throughout its campaign to pressure Tehran.

Obama's sanctions ended with a nuclear deal reached by Tehran with six world powers in 2015 aimed at preventing it from obtaining a nuclear bomb.

Trump scoffed at the deal and withdrew from it last year amid objections from other signatories.

State Department officials said the Trump administration had originally planned to halt Iranian oil exports, but the timing was not appropriate anymore.

"We are doing this in favorable market conditions with full commitment from the producer countries," said Frank Fanon, assistant secretary of state for energy resources.