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| Iran calls new U.S. sanctions a wrong move at a wrong time |
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.jpg) TEHRAN – Iran said on Thursday that the approval of a bill to tighten sanctions on the country by the U.S. House of Representatives would only complicate the dispute between Iran and the West over Tehran’s nuclear program.
The bill, which passed 400 to 20 on Wednesday, would cut Iran’s oil exports by another 1 million barrels per day over a year to near zero, in an attempt to reduce the flow of funds to Iran’s nuclear program, according to Reuters.
Iran and the West are at loggerheads over Tehran’s nuclear program, which Iran says is entirely peaceful but the West suspects may be a cover for developing nuclear weapons.
It is the first sanctions bill to put a number on exactly how much Iran’s oil exports would be cut.
The bill still has to be passed in the Senate and signed by U.S. President Barack Obama before becoming law.
Critics of the bill said it shows an aggressive signal to Iran that last month voted in Hassan Rohani, a cleric many see as a moderate. The new president will be sworn in on Sunday.
Iranian Foreign Ministry spokesman Abbas Araqchi called the vote “the wrong move at the wrong time,” saying, “The sanctions policy is a failed policy and, under the current circumstances, will only make the existing problems, especially the nuclear issue, more complicated and more difficult to resolve.
“The experience of the past three decades has shown that such outdated approaches have no effect on the will of the Iranian people to restore their obvious rights. There is a consensus on this even among U.S. analysts and Iranologists.
“Thus, the move by the U.S. House of Representatives only shows the domination of unilateralism as the symbol of the mindset of neoconservatives in the multilateral system of governance in the United States.”
According to Reuters, the vote also highlighted a growing divide between Congress and the Obama administration on Iran policy ahead of international talks on the nuclear program in coming months.
The legislation provides for heavy penalties for buyers who do not find alternative supplies, limits Iran’s access to funds in overseas accounts and penalizes countries trading with Iran in other industrial sectors.
Existing U.S. and EU measures have already reduced Iran’s oil exports by more than half from pre-sanction levels of about 2.2 million barrels per day (bpd), costing Tehran billions of dollars in lost revenue a month.
Most of the OPEC member’s exports head to Asia, where the United States has worked with Iran’s top four customers China, India, Japan, and South Korea to push them towards alternative suppliers. The four have cut purchases from Iran by more than a fifth in the first half of this year, over and above the reductions made last year.
The success of any toughening of the sanctions will depend on China, Iran’s top customer, which has repeatedly said it opposes unilateral sanctions outside the purview of the United Nations, such as those imposed by the United States.
The country reduced oil purchases from the Middle Eastern nation by 21 percent last year, but that was partly on account of differences in the first quarter over the renewal terms of annual contracts and shipping delays.
Chinese officials have said refiners are likely to cut shipments 5-10 percent this year from last. They cut imports 2 percent in the first six months of the year.
“I don’t think the Chinese government will give in to this kind of pressure,” said an official with a Chinese refinery that processes Iranian crude. “There is no chance that Iranian supplies would come to a halt.”
“This is almost like an embargo on Iranian oil imports. It is like giving Iran an ultimatum,” a Seoul-based refining source said, after the vote. “I think we can find alternatives, but we prefer Iranian crude as the economics are better. If very little Iranian crude is available, overall oil prices would rise.”
The Senate Banking Committee is expected to introduce a similar measure in September, though it is uncertain whether the language to cut exports by 1 million barrels a day will survive.
Rep. Ed Royce, a California Republican and Chairman of the House Foreign Affairs Committee who introduced the bill with Rep. Eliot Engel, a New York Democrat, said the United States has no higher national security priority than preventing a nuclear-armed Iran.
The vote showed a growing disagreement between the White House and Congress on Iran policy. A senior administration official said on Wednesday the White House is not opposed to new sanctions in principle, but wants to give Rohani a chance.
The U.S. Treasury Department recently partially eased sanctions on Iran by expanding a list of medical devices that can be exported there without special permission.
One of the 20 lawmakers to vote against the bill, Jim McDermott, a Washington-state Democrat, said shortly before the vote that the rush to sanction Iran before Rohani takes office could hurt efforts to deflate the nuclear issue.
“It’s a dangerous sign to send…,” McDermott said.
The bill also further denies Iran’s government access to foreign currency reserves.
“I think it’s too much. Asian countries don’t have much oil resources and they need to import a lot from the Middle East,” said a trader with a North Asian buyer of Iranian crude. “If the United States keeps pushing further, it would be a big burden for Asian refineries.”
While the bill has more steps to clear before becoming law, other buyers, apart from China, have already begun voicing their inability to reduce dependence on Iranian oil much further.
“Cuts in our imports from Iran have been the maximum as compared to other Asian countries,” an Indian industry executive said. “At this moment there is no scope for further reduction.”
India cut its Iranian oil imports by 43 percent over the first half of the year. That’s more than the 27 percent cut by South Korea and 22.5 percent by Japan.
Turkey would also struggle to cut its crude oil imports from Iran any further, a Turkish official said.
EP/PA
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