President Donald Trump moves to cut off Iran oil exports; decision could roil markets
WASHINGTON – Seeking to cut off Iran’s top source of income, the Trump administration announced Monday it would sanction any country, including U.S. allies, that imports Iranian oil, a move that quickly roiled global energy markets.
“The goal remains simple: to deprive the outlaw regime of the funds it has used to destabilize the Middle East for decades,” Secretary of State Mike Pompeo said Monday.
Pompeo said the sanctions will take effect May 2 and won’t include exemptions for close American partners, such as Japan and India. The move drew immediate backlash from China and could escalate tensions with Beijing as the United States and China are engaged in delicate trade negotiations.
Geng Shuang, a spokesman for China’s Foreign Ministry, accused the United States of going beyond its jurisdiction and said all of China’s dealings with Iran are legitimate and transparent. China is one of the largest buyers of Iranian oil.
“China opposes the unilateral sanctions and so-called ‘long-arm jurisdictions’ imposed by the U.S.,” Geng said in Beijing.
Turkish Foreign Minister Mevlut Cavusoglu slammed the United States for what he said was meddling in Turkey’s ability to conduct business with its neighbors.
Monday’s decision could fuel perceptions that the Trump administration’s aim is to bring about regime change in Iran.
Sunday, Axios reported that Pompeo privately told a group of Iranian Americans that the United States would not conduct “a military exercise inside Iran” to bring about regime change.
Monday, Pompeo offered an ambiguous response when asked about that. “We’re happy to get the outcome however we can achieve it,” he said. “If Americans are attacked, we will respond in a serious way.”
He said the Trump administration is not directly backing a controversial exiled Iranian opposition group known as MEK, for the Mujahedin-e-Khalq, though prominent Trump allies, including the president’s lawyer Rudy Giuliani, have spoken at the group’s events.
“We’re supporting the Iranian people, not any particular group,” Pompeo said Monday.
Pompeo said the oil sanctions would reduce Iran’s ability to fund terror groups and spread its influence across the Middle East. He said up to 40% of the regime’s revenue comes from oil.
He said the administration worked with Saudi Arabia and the United Arab Emirates to ensure “market stability” and try to stave off a spike in oil prices. The White House said in a statement that Saudi Arabia, the United Arab Emirates, other allies and the United States itself would increase oil production and “are committed to ensuring that global oil markets remain adequately supplied.”
“We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market,” the White House statement said.
Oil prices spiked to a six-month high Monday before the administration’s announcement.
Crude oil futures closed at $65.70, according to the Chicago Mercantile Exchange, an increase of about 2.7%.
Republicans in Congress welcomed the administration’s decision.
“The Trump Administration pushback against the Iranian regime has been effective and will pay dividends over time,” Sen. Lindsey Graham, R-S.C., said in a tweet. “This is the clearest signal yet that if you do business with the Iranian regime you will NOT do business with America.”
Monday’s announcement is part of the administration’s “maximum pressure” strategy to isolate Iran’s regime and strangle its economy. That campaign included withdrawing from an agreement intended to get Iran to give up its nuclear program.
The administration first slapped sanctions on Iran’s oil sector in November and launched an intense campaign to pressure other countries to stop importing Iran’s oil. The State Department granted waivers to eight countries – including U.S. allies such as South Korea, Japan and India – from the sanctions. The waiver list also included China and Turkey.
Officials said that was designed to allow those countries time to reorient their oil industry to new suppliers. Pompeo said that grace period would end May 2.
David Jackson and Deirdre Shesgreen USA TODAY