May 25, 2019

U.S.-Iran standoff: no more waivers will be allowed for oil imports from Iran

By Guido Lanfranchi.

Starting in May 2019, the United States will not grant any further waivers to its sanctions regime against Iranian oil exports. The move is part of the U.S. “maximum pressure campaign” on Iran, which started one year ago with the U.S. withdrawal from the Iran Nuclear Deal.

“We have imposed the toughest sanctions ever on the Iranian regime. We’re going to continue to apply pressure on the regime until its leaders decide to start behaving more like a normal nation and less like a revolutionary cause”. These were the words of Mr. Brian Hook, U.S. Special Representative for Iran, in the wake of the announcement by State Secretary Mike Pompeo that the U.S. would not grant anymore waivers for importing Iranian oil.

In May 2018, the U.S. administration of President Donald J. Trump announced that the United States would withdraw from the Iran Nuclear Deal, an international agreement under which Iran agreed to curb its nuclear development project in return for the lifting of international sanctions imposed on the country. The U.S. withdrawal led in November to the reimposition of U.S. sanctions on Iran, including extraterritorial measures on the country’s oil exports.

“Our goal has always been to get countries importing oil from Iran to zero as quickly as possible” – Mr. Hook explained. However, he added, the conditions of the global oil markets led the U.S. administration to grant waivers to a handful of countries, allowing them to continue to import Iranian oil during a transition period. The countries who benefited from the exemptions were China, India, Japan, South Korea, Taiwan, Turkey, Italy, and Greece. 

Today, however, market conditions are very much different, with all forecasts predicting that supply will exceed demand – Mr. Hook noted, also stressing the importance of the commitment expressed by U.S. allies such as Saudi Arabia and the UAE to increase their output to offset the lack of Iranian oil in global markets. Moreover, Mr. Francis Fannon, Assistant Secretary in the Bureau of Energy Resources, underlined how the U.S. has worked in the past years with its allies in order to find alternative sources of imports for countries dependent on Iranian oil, thus moderating potential negative impacts of the U.S. sanctions. 

Since May 2019, therefore, the U.S. will step up its “maximum pressure campaign” on Iran, with the aim of denying oil revenues to the Iranian government. Special Representative Hook accused Iran of sowing instability in the Middle East, by means of its ballistic missiles build-up, as well as through its support to proxy groups across the region. The aim of the U.S. administration is thus to deny revenue to the Iranian government, forcing it to abandon its “expansionist foreign policy” – Mr. Hook reiterated. 

Moreover, Mr. Hook announced that, while previous administrations have turned a blind eye on entities evading U.S. sanctions, the current administration will enforce its measures in a tougher way. “We will sanction every sanctionable activity, and we’ve already done that” – he stressed, although refraining from touching upon any country-specific situation. 

After the recent designation of Iran’s Islamic Revolutionary Guard Corps as a foreign terrorist organization, the U.S. is about to take another major step escalating its campaign pressure on Iran.

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