U.S. re­wards cut­ting of Iran oil im­ports

Ja­pan, 10 Euro­pean na­tions ex­empted from col­lat­eral sanc­tions

The Washington Times Daily - - World - BY GUY TAY­LOR

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.

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