(Cairo) Iran’s latest confession that it uses “unconventional” means to get around US sanctions may be yet another new challenge for US President Donald Trump and his administration as they try to force the Islamic Republic to comply with their policy line.
Iranian Oil Minister Bijan Namdar Zanganeh said on June 8 that his country had unofficial and secret oil sales.
“If they [those unofficial sales] are made known, the US will immediately stop them,” Shana, the Iranian petro energy information network, quoted Zanganeh as saying.
The US, which, in May 2018, withdrew from a 2015 nuclear deal with Iran, started imposing tough sanctions on Iranian oil sales in November last year.
The sanctions, however, temporarily exempted eight states that heavily depended on Iranian oil, including China and India. These countries were given a six-month waiver that ended in April.
In April, Iranian oil sales dropped to 75,000 barrels a day, from 1.5 million barrels in October last year, a month before the US sanctions were applied.
The US also has started targeting the Iranian petrochemical sector, seeking to deprive the Islamic Republic of billions of dollars brought in by its petrochemical factories in annual revenues.
This was expected to bring Iran down to its knees. The new revelation about Iran’s secret oil sales may force Washington to rethink the intensity of the sanctions and also their methodology, however.
Zanganeh refused to provide further information about the way his country sells its oil, or even mention the amount of oil Iran is capable of selling through its “unconventional” methods every day.
Analysts expect Iran to be selling enough oil in the unofficial market to earn enough money to keep it going, even as the US sanctions deprive it of much-needed revenues.
Iran has developed survival strategies after decades of US and international sanctions on it.
The US applied economic sanctions on Iran for the first time in 1979, after a group of extremists broke into the US embassy in Tehran and took embassy staff hostage. In the years that followed, the US imposed sanctions on Iran because of its uranium enrichment activities, which should have been put within a legal framework through the 2015 deal between Iran and other world powers.
However, the latest sanction’s regime is by far the toughest. Together with the sanctions, the US increases its military presence in the Arab Gulf, amid fears that it could be close to a military confrontation with Iran.
Some countries are trying, meanwhile, to broker de-escalation, including Japan, Qatar and Oman. Japanese Prime Minister Shinzo Abe, who will travel to Iran on June 12, may convince its president Hassan Rouhani to meet Trump for direct dialogue, probably during the G20 summit and ministerial meetings which will be held in Osaka on June 28 and 29.
For those watching the US tightening its sanctions on Iran, and the Islamic Republic trying to find a way out of these sanctions, this is about oil supply, nothing more.
Denying Iranian oil access into the market has reduced offer and consequently forced some countries to reduce imports. This includes China, which had to reduce oil imports by 8% in May compared to the previous month.
Other oil producers are also proposing to make up for lost Iranian oil due to the sanctions. Saudi Arabia and Iraq said that they were ready to replace Iranian oil in the market.
This came at a time when major members of the Organization of Petroleum Exporting Countries, OPEC, were discussing the possibility of extending a previously agreed-upon production cut to prevent prices from falling even further.