The United States announced to re-impose sanctions on Iran. President Donald Trump unilaterally pulled his country out from an agreement signed by big powers with Iran. The US government threatened countries to bring down their oil imports from Iran to zero or face similar sanctions. Many critics fail to understand the logic of President Trump as they strongly believe that he will not be able to achieve much by re-imposing sanctions.
Some analysts say that the US administration wishes to maintain a delicate balancing act with the waivers by ensuring the oil market has sufficient supply and avoid a politically damaging spike in fuel prices. The US also wants to ensure that Iran doesn’t collect enough revenue that the US sanctions become irrelevant. Countries that get waivers will be required to pay trough an escrow accounts in their local currency. That means the money won’t directly go to Iran, but will be allowed to use it for buying food, medicine or other non-sanctioned goods from its crude customers.
Let us first of all find the rationale behind re-imposition of sanctions on Iran by the US. I will prefer to use a quote. It says the re-imposition of sanctions on Iran by the US are aimed at achieving two targets: 1) quashing its nuclear ambitions and its ballistic missile program, but also 2) weakening its financial strength to support groups fighting proxy war in Syria, Yemen, Lebanon and other parts of the Middle East”.
Some analysts say that the US has imposed proxy war on the above stated countries for establishing its hegemony in Middle East and North Africa (MENA). The US efforts are aimed at weakening these countries so that they don’t become a potential threat for Israel, which has faced humiliating defeat in Lebanon. Hezbollah, a Lebanon-based resistance group smashing Israel’s military supremacy is often termed a terrorist outfit and alleged for receiving funds and military hardware from Iran.
No sooner did these sanctions became effective, the US confirmed granting waivers to eight countries, allowing them to continue to import oil from Iran for the next six months. The countries include South Korea, Japan, India, China, Turkey, Taiwan, Italy and Greece. The waivers will facilitate these to continue to import oil, although there is a great deal of disagreement among analysts over how much Iran’s exports will fall.
This waiver means that the supply situation will ease further. Reportedly Iran’s oil exports will stabilize at around 1 million barrels per day, and could even increase again in the coming months because Japan and South Korea have hardly been buying any Iranian oil lately. Receiving the waivers will allow them to continue buying. To be sure, not everyone agrees on this point, some believe the hawkish government in Washington will make other efforts to curb Iranian oil export.
Announcement of waivers, are a defeat of the US, seemingly backtracking a policy to cut Iran’s oil exports to zero. However, the Secretary of State Mike Pompeo continues to play the famous US mantra, “maximum pressure” campaign will continue and that the administration hopes to get to zero. The waivers were granted to countries that “need a little bit more time,” he said.
I am also obliged to refer to what has been said by Professor Frank N. von Hippel, former assistant director for national security in the White House Office of Science and Technology. He said that it was a terrible mistake for the Trump Administration to pull the US out of the agreement between the P5+1+EU and Iran, commonly referred as Joint Comprehensive Plan of Action (JCPOA).
“The US has lost credibility with the other permanent members of the UN Security Council, Germany and the EU”. He also warned, “If Iran reacts by ending its own compliance with the JCPOA, we might be on a path to war. The US does not need another unnecessary and costly war”.