August 08, 2018
The Path to Renewed Oil Sanctions on Iran
How Trump Can Significantly Reduce Tehran's Exports
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
More from CNAS
-
Rising to the China Challenge
Reports
An independent assessment for Congress as mandated by the FY2019 National Defense Authorization Act....
By Ely Ratner, Daniel Kliman, Susanna V. Blume, Rush Doshi, Chris Dougherty, Richard Fontaine, Peter Harrell, Martijn Rasser, Elizabeth Rosenberg, Eric Sayers, Daleep Singh, Paul Scharre, Loren DeJonge Schulman, Neil Bhatiya, Ashley Feng, Joshua Fitt, Megan Lamberth, Kristine Lee & Ainikki Riikonen
-
Trump Has Made Sanctions a Path to Strikes
Commentary
U.S. President Donald Trump’s decision to kill the Iranian general Qassem Suleimani, the architect of Iran’s political and military influence in the Middle East, and the Irani...
By Elizabeth Rosenberg & Neil Bhatiya
-
Watch Out for Iranian Info Wars Funded By Crypto
Commentary
With tensions rising between Washington and Tehran in the wake of the U.S. killing of Iranian general Qasim Soleimani earlier this month, U.S. officials should expect more Ira...
By Yaya J. Fanusie
-
Iran attacks U.S. troops in Iraq base
Video
Neil Bhatiya joins Bloomberg's Daybreak Asia by phone to discuss the latest developments in heightened tensions between the United States and Iran. Watch the full conversatio...
By Neil Bhatiya
