How Trump Can Escape a Bind on Iran Sanctions

President Donald Trump is in a bind when it comes to foreign policy and oil prices – and he knows it. On the one hand, he needs to intensify sanctions on Iran’s oil industry to put maximum pressure on the regime. On the other, he is wary of pushing up oil prices by suddenly ending Iranian exports. That would hurt U.S. consumers and the country’s manufacturing and transportation sectors – and likely the president’s poll ratings as well. The best move for the administration for now is to maintain the exemptions that the U.S. has given some nations so they may continue to import Iranian oil, but to cut them slightly.

Here’s the background. In November, the U.S. offered official exemptions from the sanctions to eight countries – including China, Japan and India - provided they kept their purchases of Iranian oil to specific quotas and paid via escrow accounts that limited the Iranian government’s use of the revenue. These exemptions were valid for six months, and within weeks the U.S. will announce whether they will be renewed, reduced or ended. If the White House does not renew at least a portion of the exemptions, oil prices will rise just as American are getting on the road for summer travel, and this will hamstring foreign policy toward Venezuela and China.