August 08, 2018

The Path to Renewed Oil Sanctions on Iran

How Trump Can Significantly Reduce Tehran's Exports

By Peter Harrell

On August 5, the Trump administration reinstated a first set of U.S. sanctions on Iran that had been suspended under the Joint Comprehensive Plan of Action (JCPOA) nuclear deal. But the bulk of U.S. sanctions on Iran will not come back into force until November 5, 180 days after Trump’s initial May 8 announcement that Washington would withdraw from the agreement. On that date, all of the U.S. sanctions suspended by the JCPOA will be reinstated, including the most important of all: the sanctions on Iran’s oil exports.

Sanctions on oil exports have the potential to be economically devastating to Tehran. Iranian Deputy Oil Minister Habibollah Bitaraf said in June that Iran’s government took in an estimated $50 billion from the sale of oil in fiscal year 2017 and that oil and petroleum products made up 70 percent of Iran’s total exports. With the value of Iran’s currency already falling 50 percent since Trump pulled the United States out of the JCPOA and street protests spreading against Iran’s government, cutting off Tehran’s biggest source of cash has the potential to dramatically hit Iran’s already ailing government.

If they play their hand well, Trump officials can secure large reductions in Iran’s oil exports. But doing so requires the administration to navigate both complex global oil markets and a multilevel diplomatic game involving both governments and global companies. Trump will have to manage deft diplomacy with Iran’s largest customer, China, which has made decisions on Iranian oil within the broader context of rising U.S.-Chinese trade tensions. He will have to maintain a relentless campaign against Iranian sanctions evasion. And he will have to deal with the fact that unilateral U.S. sanctions on Iran’s oil purchases may hasten global efforts to build a mechanism that foreign countries can use to conduct trade despite U.S. sanctions in the future.


Read the Full Article at Foreign Affairs

  • Commentary
    • September 24, 2020
    Trump’s Sanctions Won’t Deter Moscow

    The 2020 election is no more protected from Russian meddling than the 2016 election was....

    By Edward Fishman

  • Reports
    • September 15, 2020
    Sanctions by the Numbers

    This edition of Sanctions by the Numbers explores Iran sanctions, tracking how designations and delistings have evolved over time, the dozens of countries affected by Iran-rel...

    By Abigail Eineman

  • Commentary
    • SAIS Review of International Affairs
    • September 1, 2020
    Local Interests, Chinese Ambitions, and an Intelligent American Response

    Review of Daniel Markey, China’s Western Horizon: Beijing and the New Geopolitics of Eurasia (New York: Oxford University Press, 2020). In his book China’s Western Horizon: Be...

    By Emily Jin

  • Commentary
    • August 26, 2020
    Sharper: The Future of U.S. Sanctions Policy

    Sanctions are increasingly common in U.S. foreign policy and economic statecraft. But they are not a cure-all....

    By Kaleigh Thomas, Cole Stevens & Chris Estep

View All Reports View All Articles & Multimedia