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Weapons of Mass Destruction (WMD)

Iran continuing oil export despite US sanctions

ISNA - Iranian Students' News Agency

Sun / 4 August 2019 / 15:13

Tehran (ISNA) - China and other countries are receiving oil shipments from a larger number of Iranian tankers than was previously known, defying sanctions imposed by the United States to choke off Tehran's main source of income, an investigation by The New York Times has found.

The Times examined the movements of more than 70 Iranian tankers since May 2, when the American sanctions took full effect.

The continued flow of oil underscores the difficulty the Trump administration has had in using sanctions to bring Iranian oil exports to zero after breaking with allies and partners on Iran policy. The Obama administration had worked with China, Russia and three European allies on the 2015 agreement intended to restrict Iran's ability to pursue a nuclear program. President Trump's decision to withdraw from the deal and to impose sanctions was opposed by those countries.

"You can't make these kinds of threats if you can't operationalize it," said Richard Nephew, a scholar at Columbia University and a former White House and State Department official who helped enforce Iran sanctions during the Obama administration. President Barack Obama did not have a goal of bringing Iran's oil exports to zero while pressuring Tehran to negotiate.

"It adds up to a decision that makes them look weak and feckless," he added. "That shows there are limitations to U.S. power. China and other places are prepared to say, 'No, we're not going to follow the U.S. lead.'"

"U.S. sanctions have not stopped Iran from moving oil to the Mediterranean and Asia," said Noam Raydan, an analyst at ClipperData, which tracks global crude shipments.

It is not illegal under international law to buy and haul Iranian oil or related products. The Trump administration's oil sanctions, which mainly went into effect last November after the United States pulled out of the Iran nuclear agreement, are unilateral. The administration granted eight governments permission to continue buying Iranian oil despite the sanctions, but ended those exceptions on May 2.

Foreign companies that ignore the sanctions and do business with American companies or banks risk being punished by the United States.

Since the sanctions came into full effect on May 2, low-level hostilities between Iran and the United States in the Persian Gulf have increased, despite attempts by European nations to ramp down tensions and get Iran to comply with the nuclear deal, which it had been doing until it breached limits on nuclear fuel last month.

The Trump administration is starting to intensify sanctions enforcement to try to end the exports to China, which continues to be the largest buyer of Iranian oil. On July 22, Secretary of State Mike Pompeo announced sanctions against Zhuhai Zhenrong, a Chinese state-owned enterprise, and its top executive, Li Youmin, for "violating U.S. restrictions on Iran's oil sector."

To really tighten the screws on China, the Trump administration would need to punish the People's Bank of China or other Chinese banks that engage in transactions with the Central Bank of Iran, Mr. Nephew said. The United States could also penalize the energy giant Sinopec, which, like Zhuhai Zhenrong, also imports oil from Iran. But sanctioning the banks or Sinopec would have far-reaching consequences for global trade and deepen the divide between Washington and Beijing.

Some countries watching the continuing imports of Iranian oil by China might start pressuring the Trump administration to grant them exceptions, Mr. Nephew said. Or they might decide to just go ahead and buy the oil, perhaps in secret. In June, after a meeting with Prime Minister Shinzo Abe of Japan, President Hassan Rouhani of Iran said Mr. Abe told him "Japan was interested in continuing to buy Iran's oil."

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