WASHINGTON, Nov 2, 2018 (BSS/AFP) – All of Iran’s oil exports and
financial transactions will be targeted under US sanctions that take force
Monday, six months after President Donald Trump bolted from a nuclear deal.
The sanctions bring back the punitive measures that were imposed and then
lifted by former president Barack Obama who reached an international
agreement under which Iran moved to end its nuclear program.
While European powers believe the deal has been successful and have sought
to preserve trade with Iran, most major companies have chosen to exit the
country rather than incur the wrath of US authorities.
– Sanctions already reimposed –
On August 7, the first sanctions lifted under the 2015 nuclear deal came
into force, banning:
– The Iranian government’s purchases of dollars, or the international
buying and selling of significant sums of rials, Iran’s under-pressure
currency
– Purchases of Iranian treasury bonds
– Trade in gold or other precious metals, aluminum, steel, carbon or
graphite
– Automobile and commercial aviation trade
– US imports of Iranian carpets or foodstuffs
– Sanctions come into force Monday –
The toughest of the Obama-era sanctions lifted under the 2015 nuclear deal
will come back, including bans on:
– Energy sector sales including oil. The Trump administration says it aims
for Iranian oil exports to be “as close to zero as possible” but the United
States will likely give at least temporary reprieves to countries that cut
but do not end purchases.
Iran will likely still export oil, its main commodity, in some form. Iran
could mix its oil with crude from neighboring Iraq, sell on the black market
or try a barter system supported by the Europeans.
Another key pressure point will be the price of oil, which is politically
sensitive in the United States. The reduction in Iranian crude would likely
bring up global prices. Saudi Arabia could make up the difference; while the
kingdom has threatened to use oil in retaliation for international punishment
over its killing of journalist Jamal Khashoggi, it also is eager to squeeze
Iran, its regional rival.
– Financial transactions. Starting on Monday, any foreign institution that
does business with Iran’s central bank or other banks in the country will
lose access to the US financial system. The risks for foreign banks are high
in a globalized economy in which the dollar remains the dominant currency.
One unresolved issue is whether the United States will press to disconnect
Iranian banks from SWIFT, the international system of interbank transfers
headed in Belgium.
US hardliners want to press ahead on SWIFT, but others argue to keep the
option as a bargaining card with the Europeans and say that SWIFT access
remains useful in tracking Iranian transactions.