U.S Threatens Sanctions With Seemingly No Benefits To Iran’s Top Five Oil Exporters

On Monday, April 22nd, the United States stated that if China, India, Japan, South Korea, and Turkey continued to import oil from Iran after May 2nd, when their waivers expire, they will no longer be exempt from US sanctions. Iran has denounced these sanctions, calling them illegal, and does not believe the threat has any value. Since November, when the waivers were issued, the United States says that is has been working with the United Arab Emirates and Saudi Arabia in order to ensure oil markets are “adequately supplied.” While attempting to reduce oil exports could be seen as an opportunity to encourage a transition to renewable energy sources, it is obvious that this is no more than a grasp at power and an attempt to minimize that of Iran.  

Both Ayatollah Ali Khamenei and Iranian President Hassan Rouhani denounced the threat of sanctions, the latter questioning the U.S administration: “Do you understand the consequences of this statement and that it means you are a definite enemy of the Iranian people?” as reported by Reuters. The two leaders also emphasized that the United States is not able to completely eliminate Iranian oil exports, while Turkey condemned the decision and noted that it would harm the people of Iran and would not “serve regional peace and stability,” according to Al Jazeera. Chinese foreign ministry spokesman Geng Shuang stated that Beijing also opposed the sanctions and that the country’s cooperation with Iran is legal. Al Jazeera also noted that South Korea is still trying to negotiate with the US to extend the waivers and, while the government would not officially comment on the matter, India has started searching for a new oil supplier.

With seemingly no other reason than to take power from the Iranian government, there are virtually no benefits to this decision, and negative externalities are plentiful. With China, India, Japan, South Korea, and Turkey all being in the top ten trading partners for the United States, imposing sanctions on these countries would likely create more of a negative impact on the US economy than the intended recipients of the sanctions. Furthermore, The New York Times points out that sanctions have already led to a shortage of critical medicines in Iran and the US is currently in the midst of attempting to arrive at a trade deal with China and also needs the country’s assistance in controlling the development of North Korea’s nuclear weapons. By threatening sanctions on China, the US is potentially compromising the success of these important endeavors. While the United States claims that it is working with Saudi Arabia and the UAE on ensuring minimal dips in the oil market, oil prices have already skyrocketed this year as a result, reaching $20 per barrel, according to The New York Times, thus unnecessarily worsening economies globally. These sanctions also further strain relations with Iran, who recently voted to label the US armed forces as a terrorist organization.

Sanctions were reimposed on Iran following President Donald Trump’s decision to pulling the United States out of the 2015 Joint Comprehensive Plan of Action. Waivers were granted in November 2018 to Iran’s eight largest buying countries in order to allow them time to find alternate energy sources and prevent a shock to the global oil markets, according to Al Jazeera. Italy, Taiwan, and Greece have since ceased importing oil from Iran and will not be affected by the sanctions that the other five countries may now face. The Trump administration sees Iran as a threat to the stability of the Middle East, but in trying to force political change in Iran, has seemingly contributed to the instability.

Sanctions are fairly commonplace in this day and age as a tool for leverage, but in this case, they are seemingly doing far more harm than good — and to what end? Restricting oil exports would not necessarily be a bad thing if it was done in a more controlled and diplomatic fashion with a goal of reducing fossil fuel consumption. However, simply attempting to shift the oil market over to the United States allies has only served to raise tensions with Iran as well as global oil prices. The United States must remove the pressure of the sanctions and work with the five countries towards finding other energy sources, preferably those which are renewable, such as solar or wind, or simply remove itself from a situation in which it had no business in the first place. Creating such a large commotion over something so short-sighted is not sustainable and will inevitably lead to more conflict if it is not stopped.

Maura Koehler