Trump and the Art of the Iranian Deal
It was predictable that the administration would go soft on oil sanctions exemptions, but it can still make good on its original hard line.
Burning away profits?
Photographer: Atta Kenare/AFP/Getty Images
New U.S. sanctions on Iran’s oil industry, set to begin on Sunday, were supposed to exert maximum pressure on Iran’s economy. Since the pullout from the Iran nuclear deal was announced in May, the Trump administration has claimed a goal of cutting Iran’s oil exports to zero. Officials have repeatedly said that they expected customers to halt all Iranian oil imports and that no waivers or exceptions would be forthcoming. Markets took this rhetoric very seriously. Oil prices shot up by $11 per barrel between July and October on news that as much as 1.5 million barrels of Iranian oil per day could be eliminated from the global supply.
But today came a bombshell: Bloomberg News reports that the State Department will be offering "temporary" exemptions to up to eight countries and jurisdictions to import Iranian oil. Japan, India and South Korea are apparently among that group, while the unnamed jurisdiction is probably Taiwan. While the exemptions allow these nations to continue to buy Iranian oil, they must gradually cut those imports in the months ahead or possibly face U.S. punishments.