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Will New Oil Sanctions Be the Game-Changer in Iran?



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On Monday, in a move that would have been unimaginable only weeks ago, the European Union outlawed Iranian oil imports. The 27 states of the European Union together import 660,000 barrels of crude from Iran each day, making them collectively the second largest importer of the Islamic Republic’s oil, after oil-starved China.

Whether or not the sanctions persuade Iran to stop enriching uranium or developing a nuclear weapon, they’re certainly having an effect. In the past two weeks, the Iranian rial has fallen to an all-time low against the dollar.

In November, the International Atomic Energy Agency confirmed Western suspicions that Tehran’s atomic program contains a military dimension. Since then, President Obama has barred U.S. companies from doing certain business with foreign entities that conduct transactions with the Central Bank of Iran. The U.S. has long prohibited the purchase of Iranian gas and oil, but the CBI processes most of Iran’s vital energy revenue for countries that still buy it.

Though the EU’s chief’s diplomats agreed to respect ongoing deals to purchase Iranian oil and gas products until July 1, at that point all residual European business must end. No new oil deal can be struck during the interim period.

The one-two punch of U.S. and European punitive measures is taking a huge financial toll on Iran’s already wobbly financial system. Former Iranian intelligence minister Ali Fallahian, a member of the country’s powerful and opaque Assembly of Experts, called Monday for Iran’s regime to close the Strait of Hormuz. The narrow shipping corridor permits a third of the global energy supply to pass through its lanes.

While the U.S. and the EU do not advocate regime change in Iran, sanctions could breathe life into Iran’s struggling pro-democracy movement. Contrary to popular belief, robust economic sanctions have not unified the population against the West. Since Supreme Leader Ali Khamenei and President Mahmoud Ahmadinejad rigged the elections of June 2009, the Iranian government has been increasingly unpopular, and the people widely blame it for the country’s worsening economic situation.

The millions who took to the streets of Tehran in the aftermath of that election arguably constituted the first full-blown Middle Eastern reform movement. Since that time, despotic regimes have fallen in Tunisia and Egypt, and others — like Bashar Assad’s dictatorship in Syria — are on the ropes, but the Iranians have had no such luck. The unprecedented U.S. and European sanctions will not work overnight. By early summer, it will be clearer whether or not they’re changing Iran’s behavior.

Given Chinese and Russian resistance to a seventh round of U.N. Security Council sanctions against Iran, the U.S. and its allies will likely have to continue working outside the U.N. The U.N. Charter provides for a comprehensive embargo against a country that violates U.N. resolutions, so the Security Council could issue a “complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication, and the severance of diplomatic relations.” But the Russians and the Chinese will surely prevent the U.N. from doing anything of the kind.

It is a vexing predicament for the U.S. and the EU. Apart from Israel, the U.S., the U.K., and the Netherlands are the only three countries that have declared their refusal to live with a nuclear Iran. If these latest sanctions, crushing as they are, prove ineffective, this fall will bring hard decisions.

— Benjamin Weinthal is a fellow at the Foundation for Defense of Democracies.



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