Following an evaluation of prices and the global oil supply’s ability to withstand cutting off oil imports from Iran, the Obama administration announced plans to move forward with the decision to impose sanctions on Iranian oil imports.
The sanctions law prohibits foreign banks to carry out oil-related transactions with Iran, one step closer to eliminating U.S. reliance on foreign oil.
On the surface, the purpose of the sanctions is to cut off Iran from the U.S. financial system by eliminating Iran as a major supplier of U.S. oil. But it’s no secret the real reason behind the sanctions imposed on oil imports is to pressure Iran to do away with its highly debated nuclear program on suspicions of atomic weapon development.
While Obama’s mission to decrease dependence on foreign oil is seen as a step in the right direction by most U.S. citizens, cutting off a significant oil source has people wondering how he’s going to make up for the loss in supply and the repercussions to follow.
Decreased supply met with a steady or growing level in demand will continue to hike up oil prices that are already unprecedentedly high. So the thought of imposing measures to further drive up prices at the pump leaves a bad taste in people’s mouths around election time.
But the Obama administration is confident there is enough alternative oil supplies in the global market to put the penalties into effect by the end of June.
The U.S. has already exempted 11 countries from the congressionally mandated sanction laws and claims that other nations, many of whom are U.S. allies, can avoid the sanctions by “significantly reducing their Iranian oil imports” before the implementation deadline, though there is currently no definition of a “significant reduction.” But the ambiguity isn’t likely to prevent countries from cutting back on importing oil from Iran either out of fear of sanctions or concern about Iran’s nuclear intentions.
Come the end of June, let freedom ring. Whether we like it or not.
Until next time,