The Obama administration will extend six-month sanctions exemptions to China, India and seven other countries including Sri Lanka for significantly reducing oil imports from Iran, officials said Tuesday according to the Associated Press.
The waivers will be announced Wednesday, said the officials, who demanded anonymity because they weren’t authorized to speak publicly on the matter. Banks in Malaysia, Singapore, South Africa, South Korea, Sri Lanka, Turkey and Taiwan also will be exempted from any U.S. penalties.
The Obama administration has introduced a series of new measures over the past week to step up the pressure on Iran over its nuclear program, which Washington suspects is aimed at making weapons but Iran insists is for generating electricity and medical research. Washington hopes the pressure will force Iran to come clean on its nuclear activity so that the U.S. and its allies don’t have to engage in any military intervention to prevent the Islamic republic from obtaining an atomic arsenal.
Washington’s most ambitious tactic has involved pressuring countries around the world to cut commercial ties with Tehran or likewise face a series of restrictions on what type of business they can conduct in the United States, the world’s largest market. The U.S., however, has yet to punish any of its international trading partners since instituting Iranian petroleum sanctions last year, leading observers in Congress and elsewhere to question if the threat of American action is real.
China remains Iran’s top trading partner and its No. 1 client for petroleum exports, with Japan, India and South Korea among the other top purchasers.
One U.S. official stressed that Chinese imports showed an honest decrease, especially when crude oil is accounted for in calculations.
In reality, though, it is difficult to imagine the Obama administration imposing wide-scale penalties on Chinese banks and financial institutions even if Beijing hadn’t scaled back business with Tehran. Such measures would cause financial damage for both China and the United States, the world’s two biggest economies, and worsen commercial friction between the powers just as Chinese President Xi Jinping prepares to visit the U.S. later this week for a summit with President Barack Obama.
Testifying Tuesday to the Senate Banking Committee, Wendy Sherman, the State Department’s lead nuclear negotiator, said Iran would be high on the list of topics for Obama’s meeting with Xi. She insisted U.S. pressure had already had an impact, saying Chinese trade with Iran has declined by 18 percent.
Despite plummeting sales overseas, Iran remains one of the world’s largest oil producers. Its exports bring in tens of billions of dollars in revenue for the country’s hardline leaders, money the U.S. is trying to cut off.
Earlier Tuesday, the U.S. issued further sanctions by blacklisting 37 companies accused of operating as a front network for Iran’s leadership used to circumvent international restrictions. The Treasury Department said the companies were generating billions of dollars in profits for the Iranian regime each year.
