The United States has imposed sanctions on a network of people and firms accused of facilitating the sale of millions of barrels of Iranian oil to China as U.S. President Donald Trump’s administration seeks to bring Iran’s crude exports to zero.
The new tranche of sanctions is an opening shot against Beijing and Tehran, designed to put China on notice without disrupting back-channel discussions to explore the potential for a deal with Iran that restricts its nuclear program.
Analysts say these sanctions — which targeted individuals and vessels linked to the so-called shadow fleet of ships that transport embargoed Iranian oil — could be effective but will not drive Iran’s oil exports down to zero. Tougher measures would be needed to do that — going after Chinese institutions, such as banks that process oil transactions, for example– but that could risk escalating tensions between the world’s top two economies.
“This is a toe in the water, but not because Trump necessarily wants to tread carefully,” said Tom Keatinge, director of the Center for Finance and Security at the Royal United Services Institute (RUSI) in London. “This is a way to send a message and put everyone involved in moving Iranian oil on notice.”
Why Is Trump Hitting Iran?
Iran’s economy is heavily reliant on oil revenues, which the U.S. State Department on February 6 said are used to fund “terrorists and proxy groups,” referring to Iran’s network of regional armed groups that oppose Israel and the U.S.
The new sanctions target over a dozen people and companies in China, India, and the United Arab Emirates, including Iranian and Indian citizens and crew management firms as well as a collection of tankers.
“These sanctions, and what is sure to follow, will almost certainly have an impact,” said Nader Itayim, a Middle East energy expert at the U.K.-based Argus Media. “The question really is how big that impact might be. And that will ultimately depend on how seriously the Trump administration chooses to go after the Iranian oil trade.”
The 2015 nuclear deal lifted U.S. sanctions, allowing Iran to sell oil. Trump withdrew from the deal in 2018, reimposing sanctions that cut exports to around 400,000 barrels per day.
Iran later boosted sales through sanctions evasion, rising Chinese demand, and looser U.S. enforcement under former President Joe Biden.
The new sanctions are part of the Trump administration’s return to the “maximum pressure” campaign that defined the Republican president’s Iran policy in his first term. Trump says Iran is “too close” to developing a nuclear bomb, while Tehran has long claimed its atomic program is peaceful.
Source » oilprice