Free Shipping on all orders over $20

Trump administration moves to cut off Iranian oil exports

The move is designed to deprive Iran of crucial revenue, U.S. officials say, but it risks driving up gasoline prices and alienating allies.

The Trump administration said Monday it will scrap all waivers that allowed eight governments to buy Iranian oil without facing U.S. sanctions — a move designed to choke off Tehran's oil revenue.

Secretary of State Mike Pompeo warned foreign countries and companies that Washington would enforce U.S. sanctions banning the purchase of Iranian oil without exception, saying the Trump administration was intent on depriving Tehran of funds to build ballistic missiles and back its proxies in the Middle East.

"Any nation or entity interacting with Iran should do its diligence and air on the side of caution. The risks are simply not going to be worth the benefits," Pompeo told a news conference.

The policy shift affects Japan, South Korea, Turkey, China and India. The three other countries that had been granted oil sanctions waivers — Taiwan, Italy and Greece — have already stopped purchasing Iranian oil.

The decision came after an internal debate in the Trump administration in recent months over how far to squeeze Iran's oil exports and after demands from Republican lawmakers, led by Sen. Ted Cruz of Texas, that the White House make good on its tough rhetoric on Iran. Administration officials last year had been anxious to avoid jolting oil markets and causing a potential spike in gasoline prices in the U.S.

The move raised the risk of aggravating relations with allies such as India, which has been one of Iran's biggest oil customers, and raising tensions with China at a moment when Washington is trying to negotiate a major trade deal. The Trump administration is also looking to Beijing to help push North Korea to agree to abandon its nuclear and missile arsenal in return for a relaxation of economic sanctions.

Ibrahim Kalin, a senior adviser to Turkish President Recep Tayyip Erdogan, told reporters last week that Turkey "expected" another extension from the U.S. but said his government had been offered no assurances.

"Iran is one of our main oil suppliers and we made it clear that not only would we like to continue to buy oil from Iran but also Iran is a neighboring country, we have a long border with Iran. We have cultural ties," Kalin said. "So people should not expect Turkey to turn its back on Iran just like that."

As of March, Iran exported about a billion barrels of oil a day.

President Donald Trump last year pulled the United States out of the 2015 nuclear agreement between Iran and six world powers. The accord had imposed strict limits on Iran's nuclear program in return for lifting U.S. and economic sanctions on the regime. But the Trump administration had condemned the agreement as deeply flawed, arguing it did not address Iran's support for militants in the Middle East or its ballistic missile program.

When Washington reimposed sanctions in November on Iranian oil exports it granted waivers to the eight governments. The current waivers expire on May 2.

Pompeo said the U.S. had made the decision after receiving assurances from Saudi Arabia and the United Arab Emirates that it would ensure an adequate supply of oil for the global market.

"I can confirm that each of those suppliers are working directly with Iran's former customers to make the transition away from Iranian crude less disruptive," Pompeo said.

 

 

Original post can be found at NBC News