The Trump administration said Monday that it will no longer exempt countries from US sanctions if they continue to buy Iranian oil, in a move that sparked condemnations from Tehran as well as Iran’s major oil importers, including China and Turkey.
US President Donald Trump made the decision as part of the administration’s “maximum pressure” campaign on Iran that aims to eliminate all of its revenue from oil exports that the US says funds destabilising activity throughout the Middle East and beyond.
“This decision is intended to bring Iran‘s oil exports to zero, denying the regime its principal source of revenue,” the White House said in a statement.
Announcing the step, Secretary of State Mike Pompeo said no more sanctions waivers would be granted when the current batch expire on May 2, choking off Iranian income that had been more than $50 billion a year.
“The goal remains simply: To deprive the outlaw regime of the funds that it has used to destabilize the Middle East for decades and incentivise Iran to behave like a normal country,” Pompeo told reporters at the State Department.
The administration had granted eight waivers when it re-imposed sanctions on Iran in November after Trump pulled the US out of the landmark 2015 nuclear deal.
The waivers were issued in part to give those countries more time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude. Three of those waivers, for Greece, Italy and Taiwan, are no longer needed because they have all halted their imports of Iranian oil.
But the other five continue to import Iranian oil and had lobbied for their waivers to be extended.
Iran blasts ‘illegal’ decision
The decision was promptly condemned by Iranian officials who denounced the move as “illegal”.
“Since the sanctions in question are principally illegal, the Islamic Republic of Iran did not and does not attach any value or credibility to the waivers given to the sanctions,” the Iranian foreign ministry said in a statement issued on its official website.
The statement added that Iran had intensified consultations with neighbouring countries, as well as “European and international partners” on the sanctions. The ministry said a “necessary decision” will be announced later, without elaborating.
Tehran reiterated a long-running Iranian threat to close the Strait of Hormuz if it’s prevented from using the crucial waterway in the Persian Gulf through which about a third of all oil traded at sea passes. “If we are banned from using it, we will close it,” Gen. Ali Reza Tangsiri, the head of the Iranian Revolutionary Guard’s navy, was quoted as saying by the semi-official Tasnim news agency
Iran has made similar threats before, and it was not clear if his remarks were related to Monday’s announcement.
‘Turkey rejects unilateral sanctions’
Turkey also criticised the move, with Turkish Foreign Minister Mevlut Cavusoglu saying it “will not serve regional peace and stability”.
In a message posted on Twitter Monday, Cavusoglu said: “Turkey rejects unilateral sanctions and impositions on how to conduct relations with neighbors.” Cavusoglu added the decision would harm the people of Iran. He tagged the US State Department and Pompeo on his tweet.
NATO ally Turkey had made the case that as a neighbour of Iran, Turkey cannot be expected to completely close its economy to Iranian goods.
China presents toughest diplomatic challenge
China, one of Iran’s largest customers, slammed the step, calling it more evidence of US “unilateral sanctions and long-arm jurisdiction”. China, which relies on imports for about half of its oil, could present the toughest diplomatic challenge for the US in trying to enforce its sanctions.
Those arguments fell on deaf ears within the administration.
“We will no longer grant any exemptions,” Pompeo said. “We are going to zero, we’re going to zero across the board.”
Left unclear by the US decision is whether the five countries will face immediate American sanctions if they continue to take delivery of Iranian oil after the waivers expire.
Kevin Hassett, chairman of the Council of Economic Advisers, told reporters at the White House he’s not concerned that the decision will negatively affect oil prices. He said US production has risen in recent years by “more than all of Iranian production” so there is adequate capacity should there be a need for oil supplies. He said the link between oil prices and the US economy has diminished as American oil production has increased.
Saudis, Israelis welcome move
Meanwhile Saudi Energy Minister Khalid Al-Falih said in a statement that his country would work with other oil producers “to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance”.
Iran hawks on Capitol Hill like Sen. Ted Cruz, R-Texas, who had long lobbied for the step, applauded the end of oil waivers.
“This decision will deprive the ayatollahs of billions of dollars that they would have spent undermining the security of the United States and our allies, building up Iran’s nuclear and ballistic missile programs and financing global terrorism,” he said.
Israel’s Prime Minister Benjamin Netanyahu, meanwhile, praised the administration for further tightening sanctions enforcement on Iran, which the Jewish state regards as an existential threat. He said the move “is of great importance for increasing pressure on the Iranian terrorist regime”.
(FRANCE 24 with AP and AFP)