South Africa has less than seven weeks to "significantly reduce" its oil imports from Iran, or face possible US sanctions and an oil shortage, Beeld reported on Friday.
The government, oil companies and banks that paid for oil from Iran, had to lodge an official undertaking before June 28 with the USA to scale down on the imports and apply the change visibly.
At least 26 percent of South Africa's crude oil was imported monthly from Iran.
SA Petroleum Industry Association executive director Avhapfani Tshifularo told Beeld: "This is not a business decision for us. It involves a political decision about political pressure."
If South Africa did not drastically cut its imports, it would have to expedite requests to the USA for a postponement and temporary exemption from economic sanctions.
Although diplomatic sources in the department of mineral and energy affairs confirmed that "extremely sensitive" talks were underway, a postponement request had not yet been lodged with the USA, it was reported.
"We expect a Cabinet decision by the end of the month, and we will allow ourselves to be guided by that," Tshifularo said.
The USA has claimed that Iran's banking sector, including its central bank, "finances terrorism", and through money laundering, poses a threat to the international monetary system.