Published: Wed, November 07, 2018
Markets | By Otis Pena

USA sanctions target Iran's oil exports, shipping and banks

USA sanctions target Iran's oil exports, shipping and banks

The sanctions take effect six months after President Donald Trump pulled out of the 2015 Iran nuclear deal, saying the USA could not prevent an Iranian nuclear bomb under the "decaying and rotten structure of the current agreement".

The sanctions cover 50 Iranian banks and subsidiaries, more than 200 persons and vessels in its shipping sector, and targets Tehran's national airline, Iran Air, and more than 65 of its aircraft, the statement said.

'Our position remains that as long as Iran continues to meet the deal that exists, we will be committed to it too'.

Gen. Gholam Reza Jalali, the head of country's military unit in charge of combatting sabotage, said last week that President Hassan Rouhani's cellphone was tapped recently. Unlike many other news organizations, we have not put up a paywall.

European powers which continue to back the nuclear deal said they opposed the reapplication of sanctions and major oil buyer China said it regretted the move. Iran's Revolutionary Guards Corps are among the forces participating.

Congressman Adam Schiff, the ranking member of the House Intelligence Committee, said by reinstating sanctions without justification, Trump is pitting the United States against European allies and increasing its reliance on Saudi Arabia at a time when that country is "implicated in a plot to assassinate" on foreign soil a journalist and its outspoken critic.

"Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May", said Edward Bell of Emirates NBD bank.

Kevin Book, managing director of Clearview Energy Partners research firm in Washington DC, said the first round re-imposed in August have already had a significant impact on the Iranian economy. "Today the enemy (the United States) is targeting our economy. the main target of sanctions is our people", Rouhani said.

"America wanted to cut to zero Iran's oil sales. but we will continue to sell our oil.to break sanctions", Rouhani told economists, adding the sanctions were illegal and unfair. Iran is already in the grip of an economic crisis.

"Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming", he said.

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China is a signatory to the 2015 Joint Comprehensive Plan of Action - which includes Britain, France, Germany and Russian Federation - that Trump pulled out from earlier this year.

The measures that came into effect on Monday restore all the sanctions that had been lifted under the accord that gave Iran billions of dollars in sanctions relief in exchange for curbs on its nuclear program.

In August, the European Commission revamped its Blocking Statute, a 1995 law created to help European companies and banks recover damages arising from USA sanctions on third parties.

Crude exports contribute one-third of Iran's government revenues.

The US says the sanctions, which US Secretary of Pompeo billed as the "toughest sanctions ever", are aimed at persuading Iran to "alter" its behavior, including its support for regional terrorist groups like the Hezbollah and its development of long-range ballistic missiles. "Sanctions are about psychology, that you want to dominate the other, but I can inform you that Iran is self-confident".

Front-month Brent crude futures were at $72.47 per barrel early on November 5, down 36 cents, or 0.5 percent from their last close. USA officials said they expect the exempted companies to eventually cut all Iranian deals, but the waivers offer another avenue for Tehran to fight the sanctions.

The curbs come as the United States is focused on U.S. congressional and gubernatorial elections on Tuesday.

Also speaking of the issue, Treasury and Finance Minister Berat Albayrak said Iran is an important country in terms of energy.

"The JCPOA and the sanctions are not just about Iran but about a transformative process in the worldwide community whereby you have either global law, organisations, diplomacy, negotiations - or you have imposition, you have American policy versus the rest of the world", Sajjadpour said during in a talk at Chatham House think-tank.

"The Americans never really committed to the deal and the Iranian government did not spend the cash it got from the deal on the people".

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