Tightening Iranian Oil Sanctions

Brian Hicks

Written By Brian Hicks

Posted August 2, 2012

In a move sure to add pressure to Iran, U.S. President Barack Obama declared new sanctions against any foreign banks that assist Iran in selling oil. The announcement was made on Tuesday.

Congress is due to vote on proposed new sanctions that target Tehran in an attempt to coerce them into complying with international demands regarding Iran’s controversial nuclear program.

Naturally, China quickly issued protests, since it is not only a major purchaser of Iran’s oil but also hosts the Bank of Kunlun, one of the banks mentioned in the President’s list.

While Iran has consistently insisted that its nuclear ambitions are for peaceful purposes, their actions have not always been on that level. Their resistance to international requests for compliance with nuclear proliferation treaties has caused the U.S. to take an increasingly sterner stance.

Reuters reports:

“If the Iranian government continues its defiance, there should be no doubt that the United States and our partners will continue to impose increasing consequences,” he [President Obama] said.

The latest sanctions—following earlier ones made in December—mainly focus on foreign banks dealing with the National Iranian Oil Company and Naftiran Intertrade Company.

Following the December rulings, Japan, South Korea, India, and China moderated their transactions with Iran greatly.

But with pressure now on its bank, China was quick to voice outrage:

“The U.S. has invoked domestic law to impose sanctions on a Chinese financial institution, and this is a serious violation of international rules that harms Chinese interests,” Chinese Foreign Ministry spokesman Qin Gang said in a statement.

Clearly, China isn’t about to let U.S. sanctions come between them and energy dealings with Iran.

However, it’s hard to argue against the claim that these sanctions have hurt Iran in various ways. The Iranian currency has dropped steeply in the wake of U.S. and E.U. sanctions, internal political strife has increased, and oil exports have declined by nearly half.

The House and Senate both voted in favor of the new legislation Wednesday.

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