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52 Opinion bne November 2018
Supreme Leader of Iran Ali Khamenei is seen (right) receiving Chinese President Xi Jinping in 2016. Seated to the left of Xi is Iranian President Hassan Rouhani.
ALACO DISPATCHES: Could China scupper Trump’s
bid to bring Iran to heel?
Yigal Chazan of Alaco
President Donald Trump’s strategy of pressuring Iran into making more security concessions through renewed sanctions looks set to be undermined by China’s apparent determination to continue importing Iranian crude, a key source of revenue that could throw Tehran an economic lifeline.
In May, Trump unilaterally withdrew from the international nuclear agreement – signed in late 2015 between Iran and the five permanent members of the Security Council, Germany and the EU. Sanctions relief in exchange for curbs on the country’s uranium enrichment programme had allowed Iran, OPEC’s third largest oil producer, to achieve pre-sanctions crude export levels. But the US administration argued that the deal failed to stem Iran’s ballistic missile programme and its destabilising influence in the Middle East.
Washington now wants to squeeze Iranian oil sales – which generated $50bn in the last financial year – to force Tehran back to the negotiating table. Trump is looking to secure
a more wide-ranging nuclear agreement that would address the perceived shortcomings of the original deal.
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The US president is hoping to draw Iranian concessions by doubling down on its weak economy. Since the nuclear deal took effect in January 2016, Iran has been unable to attract
“Washington now wants to squeeze Iranian oil sales to force Tehran back to the negotiating table”
the levels of foreign investment it hoped for, due in large part to pre-existing non-nuclear US sanctions. Crude sales – which along with oil products account for most Iranian exports – have been unaffected by these measures, helping to take Iran out of recession. But its finances remain in a parlous state, evidenced by recent nationwide protests over matters including steep price rises, the collapse of Iran’s currency, the rial, and high levels of unemployment.
The renewed US oil and gas sanctions come into force on November 4 – following the first wave of sanctions introduced