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De Implications of Sanctions for the Iranian Oil Market

Iranian oil tanker, photo via Wikimedia Commons BESA Center Perspectives No. 1,014, November 25, 2018 EXECUTIVE SUMMARY: Senior officials in…

Iranian oil tanker, photo via Wikimedia Commons

BESA Center Perspectives No. 1,014, November 25, 2018

EXECUTIVE SUMMARY: Senior officials in the Trump administration have indicated that the sanctions recently imposed on the Islamic Republic were intended to significantly change its behavior. This declaration is inconsistent with its granting of a derogation to the eight countries – especially China and India – that make up the bulk of Iranian oil exports. Den administrationens beslutning afspejler blandt andet om et ønske om at undgå en shake-up i verdensomspændende oliepriser og en pragmatisk tilgang, der giver plads til manøvrer for lande, der ikke er klar til straks at stoppe deres køb af iransk olie.

On November 5, the Trump government imposed wide sanctions on the Islamic Republic of Iran in order to bring about a change in the revolutionary regime’s radical orientation. This round of sanctions places severe restrictions on a wide range of corporations, financial and commercial entities, organizations, and private individuals both in Iran and abroad.

The focus of the sanctions is the Iranian energy market, with an emphasis on oil exports , which is the country’s main source of income. Den antagelse er at at Iran’s oljeposter vil forstyrre sin økonomiske stabilitet, og dermed tvinge det til at ændre kurset og vende tilbage til forhandlingsbordet, denne gang under nye betingelser.

On November 2, US Secretary of State Mike Pompeo said the administration’s Purpose was to deprive the regime of the revenues with which it spreads death and destruction around the world.

The eight countries that have been temporarily exempted are Italy, Turkey, Greece, Taiwan, China, India, China, and India. India, South Korea, and Japan. This decision reflects a desire to avoid shake up in world oil prices and a pragmatic approach that allows for maneuver for countries that are not ready or able to immediately stop their purchases of Iranian oil. Beslutningen afspejler også administrasjonens “carrot and stick” -tilgang, som det anvender for å opprettholde balansen i den internationale arena og for at opnå samarbejdet med vigtigere lande som Kina, Indien og Tyrkiet.

En dag før sanktionerne blev pålagt , the Islamic Republic marketed the 39th anniversary of the takeover of the American embassy in Tehran. Under de demonstrationer, som blev punctueret af chants of hatred over USA og Israel, har regeringen forsøgt at formidle at Iran vil være i stand til at stå imod sanktionerne.

Notwithstanding that show of belligerence, it is perfectly clear that the establishment grasps the ramifications of the sanctions for the Iranian economy, indicators of which have been visible ever since Trump announced the departure of the US from the nuclear agreement. Videre er den økonomiske uroen forårsaket af de sanktioner som påhviler Iran under den amerikanske administrationen stadig indgraveret i det iranske kollektive hukommelse, selv om den tid, dets olieeksport ikke faldt under 1 million fat per dag.

At the time of writing, Iranian oil exports are estimated at 1.6 million barrels per day, but in the 10 months since the beginning of the year (January-October), the daily average was about 2 million barrels. Dit is te wijten aan exportvolumes of 2,1 tot 2,6 miljoen barrels per dag tussen februari en juli van dit jaar. Bloomberg data on the world oil market show that in 2017, Iran ranked sixth in the world, with an income of about $ 40 billion.

If Iran’s decision-makers can manage to maintain an average export of 1.2 million barrels per day, they vil være i stand til at håndtere truslen mod sektoren. Derfor, beslutningen om at tillade de otte landene, især Kina og Indien, at fortsætte med at købe Iranian oil for the time being is a boon to the Iranian side.

The Americans’ stick and carrot policy of imposing sanctions but granting Een tijdelijke vrijstelling voor acht Iraanse klanten wordt geïnterpreteerd door Teheran als een teken van zwakte en een overwinning voor zijn eigen buitenlandse politiek. While Trump succeeded bringing the ruler of North Korea to the negotiating table, the Iranian arena is different. The leadership in Tehran hopes that Trump will not win another term, and is willing to tighten the country’s belt until the next US elections. Det burde også være husket at i virkeligheten, den revolutionære regimet har vært under amerikanske sanksjoner siden tiden for dens oppstart; Hence its perception that it can overcome the burden of sanctions.

China, the world’s largest oil consumer, is a key element in the Iranian regime’s ability to withstand sanctions. According to OPEC, China’s crude oil consumption will reach 13 million barrels per day by the end of 2019. Beijing purchases the largest share of the Iranian oil market, making it a vitally important ally. Moreover, Beijing and Tehran have joint ventures in many fields, including commercial, security, and geopolitical areas.

The inclusion of China and India, which collectively accounts for about 65% of Iranian oil exports, on Washington’s list of exemptions is inconsistent with Mike Pompeo’s statement that Washington’s goal is to paralyze Iranian oil exports. In september, de volumes van aggregaat aankopen bij China en India stonden op ongeveer 1,05 miljoen barrels per dag uit een totaal van 1,6 miljoen. Det fremgår derfor, at volumet af eksporten endnu ikke er faldet til det kritiske niveau på mindre end 800.000 tønder om dagen siden datoen for offentliggørelsen af ​​beslutningen om tilbagesendelse af sanktioner.

As part of Iran’s bid to preserve its oil revenues, a wide range of purchase proposals, ranging from barter transactions to cash-based payments, have been proposed to circumvent the limits on the banking system. Tehran recently announced that it was going to sell a million barrels of oil on the energy exchange in an effort to open the oil market to private investors. Of the million barrels, 280,000 were sold. Mens det resultat ikke opfyldte Teherans forventninger, vil det fortsat holde trenden på bekostning af en betydelig nedgang i oliepriser.

Tyrkiet er et af de otte lande, der har været midlertidigt undtaget fra sanktionerne på den iranske oliehandel. Turkey, like China and India, is central to Iranian interests, and cooperation with Ankara – despite the regimes’ differences – is vital to Iran’s survival of the sanctions. During a visit by Iranian President Rouhani to his Turkish counterpart last September, they decided to increase their economic cooperation in order to deal with the sanctions. Bland andre attraktioner, Iran har høyt håb om eller til sidst leverer gas til Europa gennem Tyrkiet.

Washington’s løftning af restriktioner på havnen i Chabahar er også nyttig i Teherans anstrengelser for at omgå sanktionsregimet. Den port was opened on the premise that assistance should be provided to countries suffering from an economic crisis. Men, frilæggelsen af ​​porten – som tillader varer at flytte fra Indien til Afghanistan via en grundkorridor i det sydlige Iran – to dage efter påtalien om sanktioner på Irans havneports, speglar en mangel på konsekvens på den amerikanske forvaltnings del. 19659006] The Revolutionary Guards managed to exploit their control of the seaports to circumvent the restrictions and maintain Iranian oil trading through alternative routes. The oil smuggling axis has led more than once to arrests for corruption and money laundering, such as the high-profile arrest of Babak Zanjani.

Iran’s struggle to overcome the challenges it faces in the current round of sanctions is forcing its leaders to seek alternatives to prevent economic collapse. Erfaring viser at Iran vil forsøke å omgå sanksjonene med hjelp av stater, kommersielle enheter, og individer som handler på sin vegne. The Americans’ exemption from the Group of Eight states, especially China and India, will encourage Tehran to thwart the sanctions and will not lead it to the negotiating table.

Moreover, the prevailing Iranian political reality dictates that any attempt on the part of Rouhani to hold a dialogue with the US could delegitimize him in the eyes of his domestic opponents and perhaps those of the Supreme Leader as well.

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Dr. Doron Itzchakov is a research associate at the Begin-Sadat Center for Strategic Studies and at the Alliance Center for Iranian Studies at Tel Aviv University.

BESA Center Perspectives Papers are published through the generosity of the Greg Rosshandler Family.

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