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Meghan L. O'Sullivan

Iran Oil Sanctions: A Rare Case Where Transactional Diplomacy Should Work

It’s different this time. The Saudis don’t have to trust the Trump administration.

The near-term future’s looking pretty bright for Saudi oil.

The near-term future’s looking pretty bright for Saudi oil.

Photographer: Simon Dawson/Bloomberg

Secretary of State Mike Pompeo’s most recent announcement on Iran policy has raised some eyebrows. He indicated on Monday morning that the Trump administration will not renew waivers to importers of Iranian crude and that other suppliers (meaning Saudi Arabia) have agreed to increase production in to ensure the global oil market remains well-supplied. Skeptics question whether — after last summer’s debacle — there is sufficient trust between Washington and Riyadh for this arrangement to work. What skeptics may not have digested is that, while timing remains a problem, this is a classic win-win situation. It is a near-perfect example of the very limited universe of occasions when transactional diplomacy could actually work.

Last summer, President Donald Trump leaned heavily on OPEC members, both publicly and privately, to increase their production of oil. He and others in the administration insisted that their intention was to bring exports of Iranian oil to zero by threatening — and ultimately enacting — sanctions on any entity that continued to import such crude. The idea in Washington seemed to be that Trump had done his part by withdrawing from the Iran nuclear deal and reimposing sanctions, and that Saudi Arabia and others needed to do theirs by ensuring that high oil prices did not result from these actions.