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#1 User is offline   Liz 

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  Posted 02 November 2018 - 11:43 PM

Trump Succeeds In Punishing Iran Without Spiking Oil Prices — For Now

Washington Examiner
by Josh Siegel
November 03, 2018 12:00 AM

Excerpt:

After allowing some countries to buy Iranian oil, the Trump administration appears on track to attain the president’s dual policy goals of punishing Tehran with sanctions while also keeping oil prices in check.

Secretary of State Mike Pompeo announced Friday morning that the administration will dole out exemptions to eight countries allowing them to continue importing oil from Iran even as the U.S. applies sanctions on Tehran beginning Sunday night. The waivers reflect the unease the Trump administration felt at the prospect of higher oil and gas prices during voting season. Yet sanctions experts and oil market practitioners don't expect the waivers to be lenient enough to save Iran's economy, which is highly dependent on oil exports.

“This is not a softening of a zero tolerance policy,” Mark Dubowitz, CEO of the Foundation for Defense of Democracies who studies sanctions policy, told the Washington Examiner. “It’s a carefully calibrated and phased strategy to cripple Iranian oil revenues without driving up the price of oil.”

Pompeo said the administration would name the countries to be granted waivers Monday, but they are expected to include China, which buys the most oil from Iran, India — the second largest buyer — South Korea, Japan, Turkey, and others. Waivers last 180 days under U.S. law.

The sanctions these countries are exempted from are intended to punish nations that buy oil from Iran, after President Trump rejected the nuclear deal with Tehran in May, by cutting them off from the U.S. financial system.

While Trump’s own national security adviser John Bolton, and other hawks, have argued the exemptions weaken leverage over Tehran, oil market observers say the administration is simply recognizing the implausibility, and price risks, of blocking the world from Iranian oil. Iran is the third-largest producer of the oil cartel OPEC, providing more than 2 percent of global oil output.

“The president gets it now,” said Richard Nephew, a senior research scholar at Columbia University’s Center on Global Energy Policy who directed sanctions policy at the State Department in the Obama administration.

“Providing exemptions to sanctions is a common-sense victory,” Nephew told the Washington Examiner. “Stopping purchases from Iran was never going to happen.”

Nephew and others say granting the exemptions is not a signal of surrender.

Pompeo on Friday emphasized that each of the exempted countries are making “important moves” to transition to zero imports of Iranian oil, as a condition of being granted more time to do so.

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