U.S. rewards cutting of Iran oil imports
Japan, 10 European nations exempted from collateral sanctions
The United States is exempting Japan and 10 European nations from U.S. sanctions on Iran because they have acted quickly to reduce oil imports from the Islamic regime, the State Department said Tuesday.
The sanctions, which make up the legal backbone of a U.S.led effort to create a global embargo on Iranian oil, provide the Obama administration with power to block U.S. market access from any financial institutions doing oil-related business with Iran’s banks.
A loophole allows the administration to provide exemptions to institutions in nations that notably cut the amount of crude they buy from Iran.
Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, Japan, the Netherlands, Poland and Spain have all “significantly reduced their volume of crude-oil purchases from Iran,” Secretary of State Hillary Rodham Clinton said in announcing the exemptions.
The announcement was framed as a success toward exacting economic pressure on Iran in an effort to prevent the regime from developing a nuclear weapon.
Many observers remain skeptical over how much a European and Japanese boycott of Iranian crude will hurt Iran’s economy.
If the 27 member nations of the European Union imposed a total embargo on Iranian oil, the boycott would result in a 25 percent cut in the roughly 2.5 million barrels of crude that Iran sells globally each day, according to the Paris-based International Energy Agency.
No mention was made on Tuesday of nations like China, India, South Korea or Turkey that buy the bulk of Iran’s oil.
A truly steep cut in Iran’s ability to profit from its oil exports would come if the embargo were to be embraced by China, which buys about 550,000 barrels of Iranian crude oil a day, or by India, which buys about 310,000 barrels a day.
Both countries have said they cannot afford to reduce the amount of oil they buy from Iran.
It remains to be seen whether the Obama administration will grant them exemptions or stand firm in enforcing the sanctions.
Mrs. Clinton on Tuesday said, “Diplomacy coupled with strong pressure can achieve the long-term solutions we seek, and we will continue to work with our international partners to increase the pressure on Iran to meet its international obligations.”
A senior State Department official, who spoke on the condition of anonymity, said the United States would engage in “consultations with any country before the imposition of sanctions.”
Nations such as China, India and Turkey could potentially be granted exemptions if they can prove that they have “significantly reduced” the amount of crude they are buying from Iran, the official said.
The official provided no specifics as to what level of reduction would be required.
A second loophole in the sanctions legislation allows the administration to hold back on enforcing the sanctions if it determines that market shortages have made it impossible for nations to cut back on what they buy from Iran.
The president must make the determination every 180 days starting on March 30.