US reimposes all Iran sanctions, allows eight countries to continue importing oil

Raheb Homavandi, REUTERS | Gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag. On Monday, the US will reimpose sanctions on Iran, but will allow eight countries to continue importing oil.

The United States will add 700 individuals and entities to its Iran blacklist and pressure the global SWIFT banking network to cut off Tehran when expanded sanctions are put in place next week, US officials said Friday.


But eight countries will be able to continue importing Iranian oil at lower levels in order to avoid upsetting global crude markets when the sanctions take effect on Monday, they said.

US Secretary of State Mike Pompeo said eight nations, which other officials identified as US allies such as Italy, India, Japan and South Korea, will receive temporary waivers allowing them to continue to import Iranian petroleum products for a limited period as long as they end such imports entirely. He said those countries had made efforts to eliminate their imports but could not complete the task by Monday's deadline.

Turkey will be among the eight countries, according to Energy Minister Fatih Donmez. Iraqi officials say the US has also granted Baghdad a waiver.

The US Treasury will also demand SWIFT stop servicing Iran's banking industry as part of enforcing sanctions over the country's nuclear program and alleged support for terrorism.

'Sanctions are coming'

The sanctions will take effect Monday and cover Iran's shipping, financial and energy sectors. It's the second batch of penalties that the administration has reimposed since US President Donald Trump withdrew from the landmark 2015 nuclear deal in May.

Shortly after the announcement, Trump tweeted what looks like a movie poster image of himself that takes creative inspiration from the TV series "Game of Thrones" with the tagline "Sanctions are Coming, November 5."

In a statement issued Friday night, Trump said, "Our objective is to force the regime into a clear choice: either abandon its destructive behavior or continue down the path toward economic disaster."

Under the 2015 deal, most international sanctions imposed on Iran over its nuclear programme were lifted in 2016 in exchange for Tehran curbing its nuclear work.

With limited exceptions, the new sanctions will penalise countries that don't stop importing Iranian oil and foreign companies that do business with blacklisted Iranian entities, including Iran's central bank, a number of private financial institutions and state-run port and shipping companies.

The restoration of sanctions is part of a wider effort by Trump to force Iran to curb its nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East.

Pompeo said the sanctions are "aimed at fundamentally altering the behavior of the Islamic Republic of Iran”. He has released a list of 12 demands that Iran must meet if it wants the sanctions lifted.

"Maximum pressure means maximum pressure," he said.

Pompeo wants the Shiite clerical regime to withdraw from war-ravaged Syria, where it is a critical ally of President Bashar al-Assad, and to end longstanding support to regional militant movements Hezbollah and Hamas.

The US also wants Iran to stop backing Yemen's Houthi rebels, who are facing a US-supported air campaign led by Saudi Arabia.

"Our ultimate aim,” said Pompeo, “is to compel Iran to permanently abandon its well-documented outlier activities and behave as a normal country."

But experts don't expect Iran's leaders to immediately throw in the towel.

"It's basically magical thinking. The Iranians have been able to continue their support to regional proxies and allies for 40 years despite economic pressure," said Ali Vaez of the International Crisis Group.

'The defeated is the US'

Iran said it was not troubled over the re-imposition of US sanctions, which target not only its vital oil and gas sector but also shipping, ship-building and banking industries.

Supreme leader Ayatollah Ali Khamenei said Trump had "disgraced" US prestige and would be the ultimate loser from renewing sanctions on the Islamic Republic.

"This new US president... has disgraced the remnant of America's prestige and that of liberal democracy. America's hard power, that is to say their economic and military power, is declining too," he said on his Persian Twitter account, quoting a speech in Tehran.

A defiant Khamenei dismissed the renewed US sanctions -- including an oil embargo -- that take effect on Monday.

"The challenge between the US and Iran has lasted for 40 years so far and the US has made various efforts against us: military, economic and media warfare," he added.  

"There's a key fact here: in this 40-year challenge, the defeated is the US and the victorious is the Islamic republic."

Iran's Foreign Ministry spokesman Bahram Qasemi told state TV the government had the "knowledge and capability" to keep the country's economy afloat amid punitive sanctions. 

"The possibility of America being able to achieve its economic goals through these sanctions is very remote and there is certainly no possibility that it will attain its political goals through such sanctions," Qasemi said.

"The new US sanctions will mostly have psychological effects."

International reactions

Iranian Foreign Minister Mohammed Javad Zarif spoke by telephone with the European Union's foreign policy chief, Federica Mogherini, and his counterparts from Germany, Sweden and Denmark about European measures to counter the US sanctions, the Iranian state news agency IRNA reported.

"Mogherini and the European ministers ... highlighted the importance of the finance ministers' commitment to Europe's financial mechanism to save the Iran nuclear deal and said the mechanism will be operational in the coming days," IRNA said.

Diplomats told Reuters last week that the new EU mechanism to facilitate payments for Iranian exports should be legally in place by Nov. 4, when the next phase of US sanctions hit, but will not be operational until early next year.

The European Union, France, Britain and Germany -- all signatories to the 2015 deal with Iran -- have condemned the US move to renew its sanctions on Iran.

But Israeli Prime Minister Benjamin Netanyahu on Saturday praised the US for reimposing sanctions against mutual foe Iran.

"Thank you, President Trump, for this historic move. The sanctions are indeed coming," Netanyahu said in a statement released by his office.


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