The Trump administration is telling eight countries – including China and India – to stop importing Iranian oil, or else.
The Trump administration on Monday said that it will not renew waivers that have allowed a handful of countries to import Iranian oil – and that countries that buck the directive may themselves face U.S. sanctions.
The move, announced by the State Department and the White House, is intended to drive Iranian oil exports to zero, potentially cutting off a crucial source of income for the country, which is home to the fourth-largest supply of oil in the world and heavily depends on oil revenues for income. It comes about a year after the Trump administration said it was exiting an international deal – reached by the Obama administration – designed to end Iran’s nuclear weapons program and one week after President Donald Trump declared that the U.S. was designating the Iran’s Islamic Revolutionary Guard Corps a foreign terrorist organization.
“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,” the White House said in a statement.
Eight countries in November received 180-day waivers to continue importing Iranian crude oil and condensate: Among them, Greece, Italy and Taiwan have already halted such imports. Japan and South Korea earlier this year ramped-up their purchases of Iranian oil, but – analysts believe – in anticipation that the U.S. would not renew the countries’ waivers.
China, India and Turkey, however, may not comply with the U.S. directive. A Turkish official reportedly told a news conference last week, for example, that his country “expects” the Trump administration to grant it a new waiver. China and India, meanwhile, are the two largest importers of Iranian oil, and China and the U.S. in particular have faced tensions over trade, the South China Sea, Taiwan, espionage and other issues.
If China and India decline to go along, it could prove a boon to Iran, allowing the Islamic republic to reap a windfall caused by the Trump administration’s attempt to limit the supply of Iranian oil on the market.
Although the Trump administration said that it had reached deals with Saudi Arabia and the United Arab Emirates to offset the drop in supply from Iran, benchmark oil prices jumped to a six-month high Monday morning in the wake of the sanctions announcement.