After the attack on Israel, the USA wants to tighten sanctions against the Iranian regime. A focus is also on the oil trade between China and Iran.
Washington, DC - The United States will impose sanctions on Iran's missile and drone programs as well as entities that support the Iranian regime or military, National Security Adviser Jake Sullivan announced late Tuesday.
Earlier, Treasury Secretary Janet L. Yellen said further sanctions against Iran were expected in retaliation for the attack on Israel over the weekend. “Treasury will not hesitate to work with our allies and use our sanctions authority to continue to disrupt the Iranian regime’s malign and destabilizing activities,” she said.
US sanctions following Iranian attack only possible to a limited extent
But experts say the United States has limited options for doing so without angering China or risking a rise in oil prices. Iran sent more than 300 drones and missiles toward Israel over the weekend in retaliation for the attack on its consulate. The unprecedented aerial barrage caused no major damage or injuries as U.S.-led forces intercepted most of the projectiles.
Still, U.S. officials and their European allies are discussing possible economic responses to Iran as top Western officials gathered in Washington for the spring meetings of the International Monetary Fund and the World Bank. Their options are limited because Iran is already one of the most penalized countries in the world and the US has imposed sanctions on the country's banking, manufacturing and energy sectors.
A more effective option would be to aggressively expand sanctions on Chinese companies that have purchased large quantities of Iranian crude exports, which provide a financial lifeline for Tehran as it is cut off from the West.
The US wants restrictions on oil trade between China and Iran
The United States imposed sanctions on some commercial links in the China-Iran oil trade last year, but experts say the administration could go further by imposing the restrictions on many more Chinese refineries and banks.
However, such an approach comes with its own risks. Yellen and other administration officials have sought to stabilize relations with China in recent months, and a sudden hit to energy production could anger Beijing. Additionally, given tighter supplies, a halt to sales of Iranian crude could lead to a rise in global oil prices, which in turn could drive gas prices higher ahead of the 2024 presidential election.
“There aren't many options that could turn the tide since much of Iran is already under sanctions,” said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, a foreign policy think tank. “But if you really want to cut off Iran’s oil revenues, you have to go through China and Chinese institutions.”
Imposing sanctions on Chinese banks that facilitate purchases of Iranian oil could remove up to 1.5 million barrels a day from global markets. That would push oil prices above $100 a barrel, which would be a political nightmare for the Biden administration, said Bob McNally, president of Rapidan Energy Group, a consulting firm.
“The last thing Biden wants is higher gas prices, so he wants Iran to sell its oil to China. He doesn't want this oil to be sealed off. “It’s that simple: He can’t afford to sanction Iranian oil,” McNally said. “They might take a few token actions to go after a small dealer here or there, but that's about it.
EU is considering sanctions against Iran, Biden calls for calm
President Biden has urged calm after the Iranian attack. The United States has made clear that it will not participate in an Israeli military strike against Iran, and senior officials have stressed that its goal is to "de-escalate regional tensions" to prevent a wider conflagration. Israel's war cabinet met on Monday to discuss possible responses.
While the West has ruled out involvement in a military response, an economic response to Iran's actions appears increasingly certain. European Commission President Ursula von der Leyen said officials in Brussels were discussing tougher sanctions against Iran. “We will consider additional sanctions against Iran in close cooperation with our partners,” she said in a statement.
The Biden administration is also under pressure from the Capitol to act. The House of Representatives on Monday overwhelmingly passed legislation aimed at stopping Iranian oil sales to China. Critics have argued that Biden should have gone further to ensure that Tehran would not be able to make billions from its oil exports.
Experts on the situation between Iran and Israel: “Non-military plans must also be on the table”
“Following Iran’s massive and disproportionate attack on Israel and with a view to escalation, all non-military measures must be on the table. This includes targeting Iran's ongoing oil sales,” said Matthew Levitt, director of the Jeanette and Eli Reinhard Program on Counterterrorism and Intelligence at the Washington Institute for Near East Policy, a Washington-based think tank.
Other experts see the challenge in the fact that Washington has already acted too aggressively towards Tehran. Since the Trump administration withdrew from the nuclear deal negotiated by President Barack Obama, Iran has been subject to strict economic restrictions, leaving policymakers little room for maneuver for new emergencies.
“There is not much more that can be done,” said Esfandyar Batmanghelidj, founder and CEO of the Bourse & Bazaar Foundation, a think tank focused on international affairs and economic diplomacy. “That’s the real problem with maximum pressure: you end up in a situation where what you think is a question of Iran policy is suddenly no longer just a question of Iran policy.”
We are currently testing machine translations. This article was automatically translated from English into German.
This article was first published in English on April 17, 2024 at the “Washingtonpost.com” - as part of a cooperation, it is now also available in translation to readers of the IPPEN.MEDIA portals.