United States Special Representative on Iran Brian Hook said on Wednesday that the US is still determined to push Iranian oil exports to zero, a promise made several times this year by Donald Trump, using a ‘calibrated’ approach that will ensure maximum economic pressure on the rogue state without lifting global oil prices.
On Monday, November 5, the US reinstated sanctions on Iran’s oil, shipping and banking industries, as Trump promised to do when he pulled out of the 2015 nuclear deal between Iran and six world powers back in May. The idea being that by cutting off Iran’s main source of income – oil exports – the regime would be forced back to the negotiating table for a deal that addresses all of the mullahs malign behaviour.
Although the Trump administration had planned to get Iran’s oil exports down to zero by the time the sanctions came into force, they have issued temporary exemptions to eight countries – China, India, South Korea, Taiwan, Japan, Greece, Italy and Turkey. Hook declined to provide details of the confidential bilateral deals with the countries, but said that this would help to cut Iran’s oil exports completely without jeopardising the oil market.
He said: “We have been very careful about applying maximum economic pressure (on Iran) without lifting the price of oil and we have done that successfully. We are going to be continuing our path to zero. We do want to achieve maximum pressure without harming friends or allies and we don’t want to lift the price of oil. … We have calibrated this very well.”
Iran’s oil exports have already fallen to 1.8 million barrels per day (bpd) in October, according to energy consultancy firm Wood Mackenzie, a drop of over 1 million bpd from its high of 2.8 million bpd in April, before Trump left the nuclear deal.
In October, oil prices reached $85 per barrel, with many people scared about a steep decline in Iranian exports, but the price dropped on Wednesday when US crude output hit a record high. This is expected to help meet the demand for former Iranian oil importers.
Hook confirmed that the US does have a target for reducing Iranian oil exports in the next six months, with the ultimate goal of halting them entirely, but did not reveal what the six-month target was.
Another policy of the Treasury Department would be to target the escrow accounts holding Iranian oil revenues to ensure that they are never used for illicit goods.