Page 55 - BNE_magazine_05_2019

bne May 2019
Opinion 55
NEWS ANALYSIS:
Trump dramatically ups ante in fight with Iran saying
‘no more oil waivers’
bne IntelliNews
Anxieties that Donald Trump may trigger military clashes, or worse, with Iran rose on April 22 as he announced his administration was ending exemptions from sanctions for countries still buying oil from the Islamic Republic.
Trump said waivers for China, India, Japan, South Korea and Turkey would expire in May. The move is aimed at bringing Iran's oil exports to zero, denying Tehran its main source
of revenue. Three other waiver holders, Greece, Italy and Taiwan, have already stopped importing Iranian oil. There had been speculation that the US was very likely set to grant some waiver extensions given concerns that entirely taking Iranian crude off world markets might drive up the oil price, but it appears White House officials hope recent negotiations with Saudi Arabia and the United Arab Emirates have produced assurances that they will work sufficiently hard to ensure enough replacement international supplies.
Given the ultra-aggressive move made by the uber-hawks in Trump’s administration in mid-April, when the US declared the Islamic Revolutionary Guard Corps (IRGC) a foreign terrorist organisation (FTO) – the first time the US had ever designated an entity of a foreign government in such
a way – there have to be worries that Trump is minded to pursue regime change in Iran by pushing the situation with the Iranians to the brink of war, or beyond, or that hotheads in the IRGC could trigger a conflagration – perhaps with
a showdown over the Hormuz Strait, the energy export chokepoint in the Gulf crucial to world oil markets, which IRGC officers often threaten to close if the US attempts to stop all Iranian oil flows to markets. April 22 also saw a hardliner appointed to head the Guard.
“Accelerating our pressure campaign”
US Secretary of State Mike Pompeo said Trump's decision to take the option of not renewing the waivers demonstrated that his administration was "dramatically accelerating our pressure campaign in a calibrated way that meets our national security objectives while maintaining well supplied global oil markets".
A crude oil tanker crosses the Suez Canal.
"We stand by our allies and partners as they transition away from Iranian crude to other alternatives," he added, also noting: "We have had extensive and productive discussions with Saudi Arabia, the United Arab Emirates, and other major producers to ease this transition and ensure sufficient supply. This, in addition to increasing US production, underscores our confidence that energy markets will remain well supplied."
“Under the President's leadership, we have taken unprecedent- ed steps to impose maximum pressure on Iran. We are going to ZERO waivers for oil exports from the corrupt Iranian regime, denying it the largest source of its revenue,” US National Security Advisor Bolton tweeted following the no-exemptions announcement.
Saudi Energy Minister Khalid al-Falih said his country would co-ordinate with other oil producing nations to ensure "the global oil market does not go out of balance".
Will China, India and Turkey play ball?
Whether the US can now get largest buyer of Iranian crude China, second largest India and Iran’s neighbour Turkey to play ball with its attempt to entirely thwart Iranian oil exports is now a big question.
Turkey, presently on bad terms with the US across a host
of issues, was most aggressive in its response to Trump’s announcement. Turkish Foreign Minister Mevlut Cavusoglu said: “The US decision to end sanctions waivers on Iran oil imports will not serve regional peace and stability, yet will harm Iranian people. Turkey rejects unilateral sanctions and impositions on how to conduct relations with neighbors.”
April 22 saw Iran and Turkey open a special financial channel for exports of Iranian gas and oil to Turkey, according to Islamic Republic News Agency. Under the system Iranian goods might be paid for with Turkish lira to help it steer
clear of US sanctions. Iran’s Foreign Minister Mohammad Javad Zarif, who was in Turkey last week for discussions on
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