The United States government is preparing more sanctions against Iran, national security adviser John Bolton told Fox Business News, commenting on what the current sanctions have already helped Washington accomplish, and what the ultimate goal is.
“The aim is to drive Iranian oil exports to zero. We’re working with other countries to get alternative supplies for countries that are buying and I think that’s critical over an extended period of time,” Bolton said, adding that this has already hurt the Iranian economy, plunging the country into a recession with the rial depreciating as much as 70 percent against the U.S. dollar.
In fact, the Iranian rial fell from US$0.000024 in early April, as per Google data, to a low of US$0.000020 in early August, only to recover to US$0.000024 as of Monday again. This doubtlessly has a lot to do with emerging shipping data that suggests Iran’s oil exports have not fallen as much as earlier reports based on estimates had it and, most recently, to the news that Washington has granted sanction waivers to eight Iranian oil importing countries.
Despite the waivers, “The aim is to drive Iranian oil exports to zero. We’re working with other countries to get alternative supplies for countries that are buying and I think that’s critical over an extended period of time.”
Yet the hawkish attitude remains intact. “We’re going to have sanctions that even go beyond this. We’re not simply going to be content with the level of sanctions that existed under Obama in 2015 — more are coming,” Bolton told Fox Business News’ Maria Bartiromo, without, however, going into any detail as to the nature of the additional sanctions.
“This is going to cut into Iran’s ability to continue their nuclear program, to finance terrorism and to engage in military activity around the Middle East and I think we’re already seeing that,” the national security adviser said.
By Irina Slav for Oilprice.com
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Now John Bolton is threatening Iran with more sanctions thus admitting on behalf of the Trump administration that the already existing sanctions on Iranian crude exports, shipping industry and banking are doomed to fail. What other sanctions could the United States throw at Iran?
Three things in particular are irritating the Trump administration. The first is that their whole sanction regime is at the mercy of China. China has the power to nullify US sanctions against Iran by buying the entire Iranian crude oil exports estimated at 2.2 million barrels a day (mbd) and paying for them in petro-yuan. China will do exactly that if there was no breakthrough ending the trade war between them during the forthcoming meeting in November between President Trump and Chinese President Xi Jingping.
The second thing is that Russia said that it will continue to buy Iranian crude and also help Tehran sell it abroad. Russia buys Iranian crude under an oil-for-goods swap deal inked in 2014 and then resells it to other countries. Moreover, Russia and China will do their utmost to frustrate US sanctions.
The third thing is that the European Union (EU) will not comply with US sanctions and is devising a mechanism for continuing trade with Iran and avoiding the sanctions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London