We welcome President Trump’s announcement on Monday that current exemptions for eight countries from the sanctions regime the U.S. imposed on Iran will not be renewed when they expire in May. That means China, India, Japan, South Korea, Taiwan, Italy, Turkey, and Greece will no longer be able to purchase Iranian oil.
Not only is it refreshing that Mr. Trump is once again keeping his word, we are glad that Iran’s ability to promote violence will now be even more sharply curtailed.
Last November, as a follow-up to its withdrawal from the 2015 Iran nuclear agreement, the U.S. reimposed economic sanctions on Iran’s oil exports that had been suspended as part of the nuclear accord. However, Iran’s eight largest oil customers were granted waivers. On Monday, Secretary of State Mike Pompeo said the waivers will end May 2 and all companies buying oil from Iran will face stiff U.S. economic penalties.
The sanctions are part of an American campaign to apply “maximum economic pressure” on Iran and thereby weaken its ability to fund terror operations around the world as well as the grip of the Ayatollahs on the country. According to Secretary Pompeo, Iran typically earns about $50 billion annually from oil sales, which amounts to about 40 percent of all government revenues. Reportedly, the Iranian economy is already suffering greatly and it has been forced to cut back substantially on its overseas activities.
The U.S. policy on Iran does bring with it some major risks. Iran has threatened to close the Straits of Hormuz, which would undoubtedly harm the world’s economy and could trigger armed confrontation. It could also complicate U.S. relations with China, which purchases about half of Iran’s one-million daily barrel output. The U.S. is currently pursuing a trade agreement with China while also seeking its help with North Korea.
Oil prices may also rise should Iranian oil be unavailable. Relying on alternative sources could prove very chancy.
All things considered, however, we believe the message of zero tolerance will not only rein in Iranian adventurism but also demonstrate that the U.S. means what it says and will act in accordance with its national interests. And that is a good thing.