Economic realities mar Trump’s stance on Iran

EXEMPTIONS::The US granted waivers to China and seven allies, including Taiwan, to import Iranian crude amid concern that a total ban would cause a price spike


Wed, Nov 07, 2018 - Page 7

US President Donald Trump’s administration was caught between allies at home and abroad and the reality of global economics as it reinstated sanctions on Monday on Iran, forced to carve out exemptions for important allies and back off on measures that could have been even more punishing for Tehran.

Washington granted waivers to allow China and seven close US partners and allies to continue importing Iranian crude and other petroleum products without penalty, bowing to concerns that a complete end to Iranian exports would cause a major spike in world oil prices and cause other economic disruptions.

Trump conceded that reality on his way to a last-minute campaign event.

“We have the toughest sanctions ever imposed, but on oil we want to go a little bit slower because I don’t want to drive the oil prices in the world,” he told reporters. “I could get the Iran oil down to zero immediately, but it would cause a shock to the market.”

While the US administration seeks to cut off Iran’s oil revenue, it is allowing Taiwan, Greece, India, Italy, Japan, South Korea and Turkey to continue purchasing Iranian oil as long as they work to reduce imports to zero.

Three of the eight waiver recipients — Greece, Italy and Turkey — are members of NATO, while Japan and South Korea have mutual defense treaties with the US and have a key part in the North Korea denuclearization initiative.

India plays a critical role in the administration’s “Indo-Pacific” strategy, which seeks to unite countries in the region into forming a bloc to counter China’s growing assertiveness.

All of them lobbied heavily to be granted the six-month exemptions while promising to further reduce or end their imports and US Secretary of State Mike Pompeo said the waivers were based on the specific circumstances of each and the need “to ensure a well-supplied oil market.”

China is the single-largest importer of Iranian oil and forcing it to look elsewhere to fuel its dynamic economy would likely have rocked the market

Iraq will also continue to have access to the energy it needs from Iran to generate and supply electricity, Brian Hook, the special representative for Iran at the US Department of State, said on Monday on a media conference call, without providing details.

Meanwhile, Turkish Minister of Foreign Affairs Mevlut Cavusoglu yesterday criticized the US renewal of sanctions on Iran’s oil and shipping industries, saying it was dangerous to isolate Tehran and unfair to punish its people, Anadolu news agency reported.

“We do not believe any result can be reached with sanctions. I think meaningful dialogue and talks are more useful than sanctions,” he told reporters in Japan.

Cavusoglu also said it was not that easy for countries to diversify energy resources to comply with the sanctions.

“Not only neighboring countries, but many countries from many regions of the world are being impacted by these unilateral sanctions,” he said.

Additional reporting by Reuters and Bloomberg