Full U.S. Sanctions
The Trump Administration has decided to fully enforce our unilateral sanctions against buying Iranian oil.
Secretary of State Mike Pompeo said the United States would no longer grant oil waivers to China and India, Iran’s two largest customers. The decision would also end waivers for Japan, South Korea and Turkey, all American allies or partners.
The waivers had allowed the five nations to avoid major sanctions against Iranian oil exports that were imposed by the United States last November. Those exceptions will expire on May 2, clearing the way for American economic penalties against all companies or financial institutions that continue to take part in transactions linked to buying Iranian oil.
“We will no longer grant exemptions,” Mr. Pompeo said in Washington. “We’re going to zero. We’re going to zero across the board.”
Of these nations, Japan will obviously comply with our sanctions.
South Korea has been surprisingly resistant on this issue, but I expect them to fold under pressure.
China, the largest importer of Iranian oil, is a different story.
Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former energy adviser to President Barack Obama, said that he doubted China would stop importing Iranian oil — and that will produce awkward choices for the administration.
“Iran sanctions are going to be a big challenge for the U.S.-Chinese relationship,” he said. “Chinese imports from Iran have been going up this year, not down. Within the next couple of months, if they are not at zero, the law requires that the U.S. sanction financial institutions in China that facilitate those transactions, and right now that includes the People’s Bank of China.”
I would be surprised if China complies, and that makes things difficult for Washington. Sanctioning the PBOC would interrupt all trade between the U.S. and China.
That seems unlikely. Even Israel and Saudi Arabia combined don't have that much influence.
Turkey also appears to be ready to defy us.
Turkey slammed the U.S. decision to end waivers on Iranian oil sanctions, saying it would not serve regional peace and stability, its foreign minister tweeted on Monday.
“We do not accept unilateral sanctions and impositions on how we build our relationship with our neighbors,” Foreign Minister Mevlut Cavusoglu said on Twitter
That makes thing awkward with our NATO ally.
Iraq says it has no choice but to defy our sanctions.
“Iraq has no alternative for importing Iranian gas, if this stops then we will be deprived of 4,000 megawatts of electricity,” spokesman for the Iraqi ministry of electricity Musab Al Mudaris told reporters on the sidelines of an energy forum in Baghdad on Monday.
The electricity ministry said it is planning to increase gas imports to from 28 million cubic meters to 35 million in June.
And finally there is India, the second-largest importer of Iranian oil.
The Indian government is studying the implications of the U.S. decision to withdraw waivers it had granted for oil import from Iran, an External Affairs Ministry official said.
“We will make a statement at an appropriate time,” the official said.
...Under the sanctions, India was allowed to import about 300,000 barrels of oil per day (bpd), which works out to a little more than nine million barrels per month.
India had reportedly been in talks with the U.S. to extend the waiver for the import of 3,00,000 bpd from Iran, but those talks seem to have failed.
India has actually increased oil imports from Iran by 5% this year, over last year. Which means that India is not prepared to simply stop buying Iranian oil.
Europe has been largely silent about this move so far.
However, they have been screaming about sanctions on Cuba.