Secretary of State Mike Pompeo announced on April 22nd that The White House is ending exemptions from sanctions for countries that import Iranian oil. The White House initially made the announcement in a statement, which said it was taking, “timely action to assure that global demand is met as all Iranian oil is removed from the market.”
Announcing the step, Secretary of State Mike Pompeo told reporters at the state department that no more sanctions waivers would be granted when the current batch expire on May 2nd, choking off Iranian income that had been more than $50 billion a year.
“After withdrawing from the Iran nuclear deal, President Trump implemented the strongest pressure campaign in history against the Islamic Republic of Iran. The goal remains simple: to deprive the outlaw regime of the funds it has used to destabilise the Middle East for four decades and incentivise Iran to behave like a normal country,” Pompeo said.
He added, “Up to 40% of the regime’s revenue comes from oil sales. It is the regime’s number one source of cash. Before our sanctions went into effect, Iran would generate as much as $50 billion annually in oil revenue. Overall, to date, we estimate that our sanctions have denied the regime well north of $10 billion. The regime would have used that money to support terror groups like Hamas and Hezbollah and continue its missile development in defiance of UN Security Council Resolution 2231, and it would have perpetuated the humanitarian crisis in Yemen,” he said.
Pompeo continued, “Our goal has been to get countries to cease importing Iranian oil entirely.
Last November, we granted exemptions from our sanctions to seven countries and to Taiwan. We did this to give our allies and partners to wean themselves off Iranian oil and to assure a well-supplied oil market, and today I am announcing that we will no longer grant any exemptions. We’re going to zero – going to zero across the board.”
When asked about the duration of the sanctions waivers and the Zero imports, Pompeo said, “how long we remain there at zero depends solely on the Islamic Republic of Iran’s senior leaders.” He added, “We have made our demands very clear to the ayatollah and his cronies. End your pursuit of nuclear weapons. Stop testing and proliferating ballistic missiles. Stop sponsoring and committing terrorism. Halt the arbitrary detention of US citizens.”
Earlier on April 22nd, the Trump administration told five nations - Japan, South Korea, Turkey, China and India that they will no longer be exempt from US sanctions if they continue to import oil from Iran. The administration granted eight oil sanctions waivers when it re-imposed sanctions on Iran after Trump pulled the US out of the landmark 2015 nuclear deal. They were granted in part to give those countries more time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude.
The move will put more pressure on Iran and its major oil Importers. It comes as a part of the administration’s “maximum pressure” campaign on Iran that aims to eliminate all of its revenue from oil exports that the US says funds destabilising activity throughout the Middle East and beyond.
US officials say they do not expect any significant reduction in the supply of oil, given production increases by other countries, including the US itself, the United Arab Emirates and Saudi Arabia.