RIYADH: The impact of US-led sanctions against Iran are beginning to unravel as it is costing the Opec’s third largest producer $133 million a day in lost sales and without an increase in global oil prices gives Washington victory, but perhaps just for now.

The outcome of this battle still remains undecided and where markets might be headed largely depends on how deep the sanctions bite Iran as Asian countries, the major importers of Iranian oil, are trying to find ways to continue oil purchases from Iran.

According to a Bloomberg report, shipments from Iran have plunged by 1.2 million barrels a day, or 52 percent, since the sanctions banning the purchase, transport, financing and insuring of Iranian crude began July 1, Bloomberg reported.

The US announced new sanctions this week against foreign banks that help Iran sell its oil or handle large transactions from the National Iranian Oil Company (NIOC) or Naftiran Intertrade Company (NICO), two key players in Iran’s oil trade.

“This bipartisan, bicameral agreement seeks to tighten the chokehold on the regime beyond anything that has been done before,” Foreign Affairs Committee chair Ileana Ros-Lehtinen told the US House of Representatives.

She said the sanctions effectively put Iran’s energy sector “off limits, and it blacklists any related unauthorised dealings,” ultimately “depriving Iran of hard currency and funds needed to sustain its nuclear programme.”

Therefore, providing insurance cover to crude shipments from Iran is emerging as a major bottleneck in for Tehran.

But on the flip side, in June, Japan’s parliament approved a government insurance cover of up to $7.6 billion for each tanker which carries Iranian crude to the country.

Japan also inked deals with two domestic shipping companies to provide insurance cover for the country's two super tankers, which are to transfer a total of three million barrels of Iranian crude by end July.

Importers in China and South Korea are also seeking alternate covers or have relied on Iran's fleet after International Group members, who follow EU law, stopped covering shipments.

And the results are evident: Japan’s crude oil imports from Iran have increased by more than 60 per cent in June. Customs-cleared imports from Iran increased to 170,389 barrels per day in June, compared to 106,162 barrels per day in May.

India, which is the third biggest buyer of Iranian oil, is also backing Iran and will offer state-backed insurance to tankers, helping the nation's biggest sea carrier to resume cargoes from Iran.

Shipping Corp. of India will soon start services to Iran as Indian insurers have agreed to give as much as $100 million of cover per voyage.

However, South Africa which has strategic investments in Iran, stopped all crude oil imports from Iran in June ahead of U.S. Secretary of State Hillary Clinton’s official visit. But it remains unclear whether the cut of Iranian imports is permanent as South Africa did not import any crude oil from Iran in January but reversed that in February.

In June, South Africa's Energy Minister Dipuo Peters also underlined that the nation was working with Iran to ensure it continues to import crude oil from Iran.

Global oil prices have managed to remain steady, despite the sanctions, mainly due to increased oil supplies.Russia, Saudi Arabia, and Venezuela are reportedly exporting about 21 percent more crude to Asia's biggest buyers compared to a year ago.

In the first half of the year, Saudi Arabia boosted sales to the top four Asian buyers by 15 percent year-on-year to 3.8 million barrels per day (bpd). During the same period, Venezuela's year-on-year exports also jumped 42 percent to 596,000 bpd, followed by a 36 percent year-on-year increase in shipments from Russia to 682,000 bpd.

The 17 percent fall in purchases by South Korea from Iran was filled up by Saudi Arabia, Kuwait and Qatar.

Saudi Arabia is already on track to surpass its record oil output this year, apparently in line to exceed the highest level of sustained output of 9.901 million barrels a day registered in 1980, immediately after the Iranian revolution of 1979.

Thus the battle continues: the energy chess board remains spread out; moves and counter moves are being made - yet the outcome is far from clear.