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The United States will continue to increase the economic pressure on Iran, Treasury Secretary Steven Mnuchin said in Israel, during a meeting with Prime Minister Benjamin Netanyahu.
"We have executed on a maximum pressure campaign for sanctions. They have worked, they are working, they are cutting off the money," Mnuchin said as quoted by Al Jazeera. "We will continue to ramp up, more, more, more ... I just came from a very productive working lunch with your team. They gave us a bunch of very specific ideas that we will be following up [on]."
"So I want to thank you for what you've been doing and encourage you, Steve, to do more - more, a lot more," Netanyahu said.
Israel, which Iran sees as arguably a bigger enemy than Saudi Arabia, has loudly cheered U.S. sanctions against Tehran and has pushed for more pressure. Mnuchin did not go into details on the additional steps Washington will take against Tehran, but the ones already taken are definitely having an impact.
The IMF recently said it expected the Iranian economy to contract by 9.5 percent this year because of the sanctions, adding that the country needed oil prices at close to $200 a barrel next year to break even.
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“Iran’s main export, oil, is severely restricted, and imports have collapsed,” the fund noted.
For now, the country is still freely exporting oil products, however, and this has helped it stay afloat. It is not too far-fetched to suggest that oil product exports might become a target of U.S. sanctions as Washington continues to pursue its maximum-pressure approach to Iran.
It is also exporting oil despite the U.S. efforts to bring these down to zero. Turning off tankers’ geolocation devices and making ship-to-ship transfers in the open sea has turned into Iran’s modus operandi to sell its crude abroad. There are willing buyers, too: China’s ship-to-ship oil imports jumped threefold between August and September this year.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.