- President Donald Trump’s administration is bringing back
pre-nuclear deal sanctions on Iran on Monday.
- Trump granted waivers to key countries that can now put money
in an escrow account to buy Iranian oil, while Iran won’t
actually see any of the money.
- Oil prices are steady around $72, Iran is still in the
nuclear deal, and its currency and economy have tanked.
- These two results mean Trump is effectively having his cake
and eating it too.
President Donald Trump’s administration is due to announce the
return of pre-nuclear deal sanctions on Iran on Monday, as well
as sanctions on 300 additional entities.
The new measures look poised to slam the country’s economy while
managing to keep oil prices low, and still stopping Tehran from
pursuing nuclear weapons.
Trump already brought back a wide swath of
sanctions on the country’s financial sector in August, after
which the rial fell from 45,000 to the dollar to a current rate
of 145,000 per dollar. In response, Iran’s government restricted
its citizens’ access to foreign currencies and banking.
But the Trump administration will now hit directly at Iran’s
lifeblood — its oil industry.
“Iran’s oil production is down, its revenues are down, and
the country is more isolated than it was” before Trump axed the
nuclear deal, Richard N. Haass, President of the Council on
Foreign Relations and a former State Department and National
Security Council official
told The New York Times.
Iran makes noise as businesses pack up and leave
Iran responded with military drills. Its president, Hassan
Rouhani, again offered combative rhetoric.
“We are in the war situation, ” Rouhani said of the
sanctions, as the Associated Press noted. “We are in the economic
war situation. We are confronting a bullying enemy. We have to
stand to win.”
Iran has already threatened to use its military to hamper
Saudi Arabia and other Gulf states moving oil through the Red Sea
if the US went through with sanctions.
Rouhani also promised to protect and even grow its economy by
beating the sanctions and continuing to sell oil and courting
European countries and firms.
But major companies and have
already abandoned Iran. Military analysts who spoke to Business
Insider did not find Iran’s threats of
force credible. While Iran has threatened to return to
nuclear production, it hasn’t signaled serious consideration to
exit the nuclear pact.
Additionally, Iran stands accused of attempted assassinations and
terror attacks of Iranian dissidents in Europe, further souring the continent
against maintaining ties.
“European companies have fled Iran in great numbers.
Hundreds of businesses have departed Iran. The whole world
understands that these sanctions are real, that they are
important,” Secretary of State Mike Pompeo told CBS’ “Face the Nation” over
Oil stable in spite of sanctions
Trump’s administration calls its Iran policy “maximum
pressure.” Nonetheless it granted waivers to eight of Iran’s top
oil buyers, but in such a way that Iran won’t actually see hard
currency from it.
The waivers only allow Iran’s top oil clients — China,
India, South Korea, Japan and Turkey — to put money in an
arm’s-length escrow account in exchange for Tehran’s oil. Only
once the US drops the sanctions can Iran take possession of the
The move looks to have prevented a sharp spike in oil
prices, which hovered just about $70 per barrel on
Trump has repeatedly leaned on Saudi
Arabia to help keep the prices down.
By granting the waivers, Trump seems to have both massively
isolated Iran but also kept oil prices affordable — achieving two
aims at once.
Trump’s withdrawal from the deal has massively isolated
Iran and tanked its economy. But if Iran leaves, the slim benefit
it now sees from the nuclear deal will quickly collapse to