The United States will begin fully enforcing sanctions on Iranian oil in early May, the White House announced on April 22.
Upon reimposing sanctions on Iran in late 2018, Washington granted six-month waivers to eight of Tehran’s main oil buyers: China, India, Japan, South Korea, Taiwan, Turkey, Italy, and Greece. The Trump administration will now terminate those waivers in early May.
“This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue,” White House press secretary Sarah Sanders said in a statement.
“The Trump Administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies, and security in the Middle East.”
President Donald Trump wants to end the waivers to exert “maximum economic pressure” on Iran by cutting off its oil exports and reducing its main revenue source to zero.
The United States will coordinate efforts with Saudi Arabia and the United Arab Emirates to increase oil output to offset any supply worries triggered by the waiver terminations.
Reports of the waiver announcement triggered a 3 percent jump in crude prices to their highest for 2019 so far. Trump views high oil prices as bad for the U.S. economy and has often publicly called on OPEC to increase output to drive down oil prices.
“We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market,” Sanders said.
Trump spoke with Saudi Arabia’s Crown Prince Mohammed bin Salman by phone last week. The White House said the president used the call to discuss ways of “maintaining maximum pressure against Iran.”
Analysts said they expected the Trump administration to push OPEC and its de-facto leader Saudi Arabia to stop withholding supply to calm market fears of oil shortages.
“If there is a time for the U.S. to be able to take a hard line it is now, with the Saudis having over 2 million barrels (per day) of spare capacity,” said Tony Nunan, oil risk manager at Mitsubishi Corp. in Tokyo.
An end to the exemptions would hit Asian buyers hardest. Iran’s biggest oil customers are China and India, who have both been lobbying for extensions to sanction waivers.
A Chinese Foreign Ministry representative did not say whether China would abide by the sanctions. India, South Korea, and Japan did not comment officially.
Prior to the reimposition of sanctions, Iran was the fourth-largest oil producer among the Organization of the Petroleum Exporting Countries (OPEC) at almost 3 million barrels per day, but April exports have shrunk to well below 1 million barrels per day, according to ship-tracking and analyst data in Refinitiv.
In September last year, the United States outpaced Russia and Iran to become the world’s largest crude oil producer for the first time in nearly two decades.
The United State considers Iran an “outlaw regime” and the world’s biggest supporter of radical Islamic terrorism. In addition to opposing Iran’s missile program, Washington faults Tehran for human rights abuses, exploiting the environment, illicit financial activities, and posing threats to maritime and cybersecurity.
Trump quit the Iran nuclear deal saying it failed to protect the United State from a nuclear threat from Iran. Shortly before Trump withdrew from the deal, Israel unveiled a trove of documents proving that Iran secretly preserved its nuclear weapons research archives and deceived world leaders about the peaceful intent of its nuclear program.
Reuters contributed to this report.
From The Epoch Times