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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2610

Ultimate Goal of Bringing Iran to Its Knees: United States to Tighten the Screws on Iranian Oil Exports

Hemantha Abeywardena writes from London…

The steady spread of tentacles of a potentially disastrous, global trade war has not deterred the United States from pursuing yet another risky move – tightening the screws on Iranian oil exports.

Judging by the coded statements from the officials of the Trump administration, it is clear that the US seems to be determined to achieving its ultimate goal of ending global, Iranian oil exports by the end of the year.

In order to achieve the goal, the US administration has already set the two-pronged strategy in motion: pressuring the OPEC to increase the daily oil output and asking the major Iranian oil importers in Asia to curtail the imports significantly, until the bar hits zero.

There are three major, Iranian oil importers in Asia – India, China and Japan. Ties between Iran and both Indian and China, however, date back centuries and go way beyond modern economics. In this context, the two nations may find it very difficult to take heed of US call without a ‘fight’.

At the same time, they are fully aware of potential consequences of challenging the US over the issue in confrontational tone, as both countries are already caught up in a trade war with the US. They simply cannot open yet another front for turning things from bad to worse.

As for Japan, it’s already sandwiched between a rock and a hard place: since it completely relies on the US for its security as never before, on one hand, it cannot antagonize the US in its hour of need. On the other hand, a steep rise in oil price at local level could lead to evaporation of the fragile growth that the country saw after decades of economic stagnation.

The troubles for the Asian giants do not end there: their major companies will not be able to trade with Iran anymore either, once the sanctions are in full swing. The exodus has already started with the European firms at the forefront.

Of course, a few global firms sometimes try to circumvent sanctions in the hope of getting away with it; by sheer luck, a handful succeed and the rest , however, get caught and then pay a heavy price for the misadventure.

The fate of ZTE, the Chinese telecommunications giant, is a case in point: not only did it agree to pay a fine of $ 1 billion to the US, in order to carry on business as usual in the country, but also agreed to let US regulators to monitor its operations – a very unprecedented move, indeed.

Among many allegations against the company by the US, the violation of sanctions against Iran and North Korea are at the top of the list.

Even after being subjected to harsh, punitive measures, ZTE, according to the US officials, is still on ‘probation’.
In this context, the companies that got into a stamped to invest in Iran, when President Obama eased the sanctions in 2015, are wasting no time in doing a LIFO – last in, first out.

In short, no country on the planet Earth is in a position to take on the United States, economically, diplomatically or politically – at present; it operates and executes its modus operandi while living up to its self-given title – the world’s only superpower.

In this context, the stakes cannot be higher for Iran: its currency, rial, is already falling in value rapidly; the unemployment among the youth is very high; the cost of living is soaring.

In a rare show of defiance, Iranian business community launched a protest against the government policies recently; the tendency can only get worse in the coming months, as Iranians are already feeling the pinch on many fronts.

The above graph shows that even during good times, the oil exports from Iran have not been very steady due to several factors. The fear is that things could only get worse towards the end of the year, if the US does not change its course of actions.

The Trump administration never said that they did not want a regime change in Iran. On the contrary, they couldn’t suppress the joy, when protests on mass scale broke out recently.

The events in the Middle East during the last decade, however, show that regime changes never bring about the aspirations of the Western politicians. Nor did they turn out in line with hypothetical political calculations, even if the motives had been good and noble.

The not-in-a hurry approach of the Trump administration in dealing with its arch enemy, Iran, in this context, may be an attempt to mitigate the unintended consequences, while hoping for an implosion, the success of which remains to be seen in the coming months.

- Asian Tribune -

Ultimate Goal of Bringing Iran to Its Knees: United States to Tighten the Screws on Iranian Oil Exports
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