U.S. Attempts to Kill the Iran Nuclear Deal Could Save It
Hook is adamant that “maximum pressure” means just that. “The United States is not looking to grant any exceptions or waivers to our campaign of maximum economic pressure on the Iranian regime,” his statement said. “Our policy is to get to zero imports of Iranian crude as quickly as possible.”
But Hook’s comments about oil markets leave room for maneuver, and they echo concerns Trump raised before granting oil-sanctions waivers last time. Leaving aside possible geopolitical or diplomatic reasons to grant waivers—say, to avoid having to sanction an ally like South Korea, or to sweeten trade negotiations with China—the oil-prices rationale conflicts with the analysis of other agencies. Energy Department projections say the market has 2 million barrels per day of spare production capacity—more than enough to replace a million lost barrels of Iranian oil per day if needed. The price spike feared last fall has not come to pass. When the Energy Information Administration published its latest projections this week, the price of oil was $64 a barrel; right about where it was this time last year, though oil prices fluctuate.
“If you know the oil markets right now, you know that price is not a factor,” said Amos Hochstein, Obama’s international energy special envoy who managed Iran sanctions. By contrast, in the first two years of Iranian oil sanctions under Obama, he said oil prices were more than $100 a barrel.
Still, there are technical problems that will complicate the push to zero Iranian exports. China, for example, is still importing roughly half a million barrels of Iranian oil per day. “It is difficult to sanction China on this issue,” Hochstein said. “They have financial institutions that can facilitate the oil trade that are not engaged in the U.S. financial market, and therefore [are] immune to sanctions.”
Separately, however, the administration has used sanctions waivers in other ways. At a conference last December, Christopher Ford, the assistant secretary of state for international security and nonproliferation, noted that even as the administration sought to sanction Iran to drive it to negotiate a better deal, they were seeking to preserve some international cooperation with Iran on things like civil nuclear research and energy projects. The waivers basically prevent the Europeans from facing sanctions for participating in projects allowed under the deal. There too, the effect, if not the intent, of the waivers could be to keep in place parts of the basic framework of the deal Trump vowed to eliminate.
“We don’t agree that we should have maximum pressure right now, considering that we want the Iranians to stay in the nuclear deal,” said a Democratic congressional aide. “But if you’re going to have maximum pressure, then waivers don’t work.”