ANALYSIS: Iran’s oil sector faces major blow as US sanctions re-imposed

Secretary of State Mike Pompeo said the administration’s efforts had resulted in the reduction of Iran’s oil exports by 1 million barrels per day since last May. (Shutterstock)

Multiple Iranian sectors face major blows after the Trump administration announced Friday the re-imposition of all US sanctions on Iran that had been lifted under the 2015 nuclear deal.

The oil sector is perhaps the most affected by the re-imposed sanctions.

Secretary of State Mike Pompeo said the administration’s efforts had resulted in the reduction of Iran’s oil exports by 1 million barrels per day since last May.

Pompeo added that as the new sanctions come into place next Monday, Iranian oil exports will shrink even more, with a decrease of more than one million barrels per day compared to last May.

The massive reduction since May of last year is three to five times more than what many analysts predicted when US President Donald Trump announced the withdrawal from the 2015 nuclear deal.

The US Treasury also confirmed that the main international financial messaging network SWIFT would face penalties if sanctioned institutions are permitted to use it.

Treasury Secretary Steven Mnuchin said on Friday that the Belgium-based firm will be sanctioned if it does business with blacklisted Iranian entities.

Mnuchin added 700 more Iranian companies and people would be added to the sanctions lists under the re-imposed sanctions.

With limited exceptions, the sanctions will penalize countries that don’t stop importing Iranian oil and foreign companies that do business with blacklisted Iranian entities, including Iran’s central bank, a number of private financial institutions and state-run port and shipping companies.

The sanctions will take effect on Monday and cover Iran’s shipping, financial and energy sectors. It’s the second batch of penalties that the administration has re-imposed since President Donald Trump withdrew from the landmark deal in May.

Pompeo said eight nations, which other officials identified as US allies such as Italy, India, Japan and South Korea, will receive temporary waivers allowing them to continue to import Iranian petroleum products for a limited period as long as they end such imports entirely. He said those countries had made efforts to eliminate their imports but could not complete the task by Monday’s deadline.

Pompeo added that the sanctions are “aimed at fundamentally altering the behavior of the Islamic Republic of Iran.”

SHOW MORE
Last Update: Wednesday, 20 May 2020 KSA 09:53 - GMT 06:53
Top