Some Countries Continue Doing Business With Iran Despite U.S. Sanction Threats

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As the Trump administration comes to an end, it has been trying to leave behind even more sanctions on Iran. But that requires cooperation from other countries, and that cooperation has been fraying some, especially when it comes to Iran’s key source for cash. NPR’s Jackie Northam reports.

JACKIE NORTHAM, BYLINE: The economic sanctions are an integral part of the Trump administration’s so-called maximum pressure campaign on Iran, and the main target has been oil exports, the lifeblood of Iran’s economy. The administration’s plan is to cut off all Iran oil sales.

HENRY ROME: The administration set for itself kind of an impossible goal, which was zero Iranian oil exports. That’s never going to happen. I mean, the Iranians have a whole host of ways to get oil onto the market.

NORTHAM: That’s Henry Rome, senior Iran analyst at the Eurasia Group, a political risk consultancy. He says administration threats to sanction countries or companies buying Iranian oil have had some effect. Big importers such as India and Japan severed their oil ties with Iran, but others have decided it’s worth the risk to get cheap Iranian oil.

ROME: Primarily, companies based in China or linked to networks that Chinese companies use to get this oil are willing to take that risk. And the U.S. government basically has to play whack-a-mole.

NORTHAM: Venezuela, Malaysia and the United Arab Emirates also buy from Iran, says Jim Burkhard, head of oil market analysis at IHS Markit, an information and research company. While it’s difficult to get firm numbers, he believes since sanctions were imposed, oil sales have hovered around half a million barrels per day. That’s about 20% of what they were a couple years ago. But Burkhard says he’s seeing an increase lately. More foreign oil tankers are arriving at Iran’s ports.

JIM BURKHARD: The increase in tanker traffic, you know, could be about 20 to 25% higher in very recent months compared to what it was for most of this year.

NORTHAM: Virtually all of Iran’s oil is shipped clandestinely because of the sanctions. The vessels often turn off their transponders, so it’s difficult to track them. There are also transfers between ships while at sea. But Samir Madani, the co-founder of tankertrackers.com, says foreign owners continually come up with new ways to evade detection.

SAMIR MADANI: The foreign ships are trying to lay under the radar from detection. We spot them anyway because we use satellite imagery.

NORTHAM: This summer the U.S. said it sees four Greek tankers delivering Iranian oil to Venezuela. But Burkhard says, for the most part, the tankers arriving and leaving Iran’s ports have been able to evade sanctions.

BURKHARD: Or perhaps the Trump administration is simply not attempting to really force Iranian exports to zero. Perhaps, you know, the maximum pressure campaign may be – not be as maximized as advertised.

NORTHAM: The sanctions have had a serious impact on Iran’s economy, but they haven’t achieved the Trump administration’s goal of forcing it to renegotiate the nuclear deal and change its behavior in the region. The sanctions could be helpful for the incoming Biden administration, but not if they’re ineffective. Eurasia Group’s Henry Rome again.

ROME: I would expect the Biden – incoming Biden administration to be fairly realistic about the leverage that’s been accrued and to try to use that to strengthen their own hand in these negotiations.

NORTHAM: The Trump administration says it will continue to add new sanctions every week on Iran until Inauguration Day, January 20. Jackie Northam, NPR News.

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