‘It Cannot Bring Iranian Exports to Zero’: New US Oil Sanctions Disappoint Hawks

The second half of US economic sanctions against Iran kicked in on November 5, 180 days after the US unilaterally pulled out of the Joint Comprehensive Plan of Action (JCPOA) in May, claiming Iranian violations of the sanctions-lifting agreement. However, enforcing the new sanctions will be easier said than done, an Iranian academic told Sputnik.
Sputnik

Radio Sputnik's Loud and Clear spoke Monday with Hamed Mousavi, a professor of political science with the University of Tehran, about the impending trade barriers the US will enact on his country, most notably on the purchasing of Iranian oil — but also on the significant backpedaling the US has been forced to do since May.

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​Mousavi said the US has been forced to back off from its earlier goal of reducing Iranian oil exports to zero because it's become simply impractical. "A lot of US allies, such as South Korea, Japan as well as India, have pressured Washington for waivers for several months now, and I think Washington has come to the conclusion that, at least in the foreseeable future, it cannot bring Iranian exports to zero. The second factor is that there is very little spare capacity in the global oil market right now. So any attempt to bring Iranian oil exports to zero is going to have a considerable effect on the prices of oil worldwide, and I don't think that's something the Trump administration wants, especially right before the congressional elections, because it's going to lead to an increase in fuel prices."

However, the waivers granted are not indefinite: they last 180 days, to give countries more time to adjust to what the US still hopes will become the reality of zero Iranian oil exports.

From Iran's perspective, Mousavi said, this is a lifeline. Oil sales form the majority of the government's revenue, and their loss would reverberate throughout the Iranian economy. However, "it also provides perhaps an opportunity for negotiation between Iran and the United States, but that is something that we have to wait and see."

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One of the key parts of that lifeline is Chabahar, a trinational port on Iran's southeastern coast that provides a regional link between Iran, India and Afghanistan and which keeps India, Iran's primary oil market, firmly on its side and against the US sanctions, Mousavi said. India applied for a waiver for trade at the port, which it's sunk billions of dollars into constructing and linking with the interior via rail, but Mousavi noted that the details of any waivers granted by the US haven't yet become known.

"We have to understand that sanctions really hurt ordinary people," Mousavi said, emphasizing that it's not just governments who get hurt when trade is barred. The professor noted that the riyal, Iran's currency, has lost over 70 per cent of its value since the US pulled out of the JCPOA in May.

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However, Mousavi says that on the psychological front, US President Donald Trump's efforts are clearly failing. "I feel that a lot of Iranians are putting this blame on the Trump administration rather than on their own government, which I think is what the Trump administration is aiming for." This, he said, was because the US had so clearly gone against international law and international consensus in scrapping the JCPOA, which it did alone. The remaining signatories — the European Union, UK, France, Germany, Russia and China — elected to remain in the deal and continue trading with Iran, maintaining that they saw no proof that Iran had violated the deal, as the US claimed, by restarting the nuclear weapons program it gave up in 2015 to get sanctions dropped.

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