U.S. Imposes 'Toughest Ever' Sanctions Against Iran

Nov 5, 2018
Originally published on November 5, 2018 8:03 am
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DAVID GREENE, HOST:

We may be getting more data points soon on whether President Trump's hard-line policy on Iran is having an impact. Sanctions are being reimposed today. Let's remember President Trump announced the return of sanctions six months ago when he withdrew from the 2015 agreement that saw Iran halt its nuclear program in exchange for sanctions relief. The ones taking effect today target Iran's major economic lifeline - its oil and gas exports. But there are some exemptions for trading partners, including China, India, Japan and South Korea.

NPR's Peter Kenyon joined us earlier from Istanbul. Hi there, Peter.

PETER KENYON, BYLINE: Hi, David.

GREENE: So are these sanctions going to be painful?

KENYON: Yes, they will. We're talking something like a million barrels a day in lost oil revenues. Iran's shipping sector, financial sector is also being hit. So far, the reaction has been I guess you'd say predictably defiant. President Hassan Rouhani today says Iran will ignore the sanctions. It's going to keep selling its oil to whoever is willing to buy. It's the U.S., he says, that's isolated, not Tehran.

And that being said, at the moment it's political points for Iran and economic pain being inflicted on Iran. I talked to analyst Ali Vaez - he's at the International Crisis Group - about all this. He said if the Trump administration is hoping these sanctions will bring Iran to its knees, it's likely to be disappointed. Now, here's a bit of what he said.

ALI VAEZ: Look. Without any doubt, this is going to bend the Iranian economy, but I doubt that it will break it. The Iranians know how to circumvent sanctions. This new round of sanctions doesn't have international support. I think by definition, the sanctions regime is going to be leakier.

KENYON: By leakier, Vaez means easier to get around than previous sanctions were because they did have a lot of other countries behind them. But Vaez also adds it will definitely cause pain, this sanctions regime that's unilaterally being done by the U.S. And it could increase tensions in the region.

GREENE: But isn't the real big question here that question of international support? I mean, there are all these European countries who - I mean, some are still part of the Iran nuclear deal. And doesn't that mean they can just keep buying Iranian oil? And if so, why are these going to be that painful?

KENYON: Well, because it's not really down to the countries, who are of course all opposed to this U.S. move. Every other signatory to that nuclear deal says this is a bad idea to reimpose sanctions. However, the real action is taking place at the company level. Those are the people spending the money.

And dozens of companies have said, OK, we're stopping our business with Iran because we're afraid of losing access to the American market. I mean, it's a big list. Major French, Indian and Norwegian oil companies are out. The shipping giant Maersk no longer does business with Iran. A bunch of European and Asian car companies, airlines, telecom, construction, banks - it just goes on and on. So there's no question that these sanctions are having an impact already.

GREENE: I see. So more important to look at the corporate decisions, not necessarily what politicians are saying in these European countries. Let me just ask you, Peter, about this moment because doesn't this hard-line position on Iran help Iran's major rival in the region, Saudi Arabia? And this is a kind of awkward moment in the U.S.-Saudi relationship.

KENYON: Yeah, to say the least. And that's seen as something of a gift in Iran. The Saudis are engulfed in this controversy about the killing of a journalist inside the Saudi consulate here in Istanbul. Jamal Khashoggi was a journalist who dared to criticize the Saudi government. And so all while that is going on, now President Trump says, this is a terrible - I don't like hearing about it.

But by the way, we're not going to punish the Saudis by canceling arms sales. That's exactly what other countries are calling for and some members of Congress. So the administration is betting this furor will die down, but whether it impacts other issues, such as the war in Yemen - which is basically a proxy fight between the Saudis and the Iranians - that's another question. We're already hearing calls for that to be brought to an end.

GREENE: Lots to talk about. NPR's Peter Kenyon reporting in Istanbul - thanks, Peter.

KENYON: Thanks a lot, David. Transcript provided by NPR, Copyright NPR.