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Iran explains sanctions: US objectives and Tehran's vision


The Trump administration has called the biggest action sanctions that the United States has ever taken against Iran. The Iranian President has described this act as an act of "Economic War" and said that his country would win.

All the heavy economic sanctions imposed on Iran on Monday by the United States is the most important element of the decision by President Trump last May to abandon the Iranian nuclear deal of 2015, which he called disaster.

Sanctions include wide-ranging exceptions that could limit their impact: Iran's biggest oil customers, such as China and India, will not be penalized, at least for six months.

Nevertheless, the Iranian oil, maritime and banking industries could suffer heavy losses and its weakened currency could still collapse under the sanctions, which, according to Trump, aims to put an end to what he considers to be actions unacceptable Iran in the Middle East.

The Trump administration says it wants to deny Iran oil revenues, the country's main export product, without destabilizing the global market. A total ban on Iranian oil exports could limit supply and soaring prices – a result that Mr Trump regards as politically dangerous.

US Secretary of State Mike Pompeo announced Monday that eight major oil importers – China, India, South Korea, Turkey, Italy, Greece, Japan and Taiwan – reprinted their sanctions. would benefit from exceptions or waivers of 180 days allowing them to buy Iranian oil as long as they suffer reductions.

More than 20 countries have already reduced their imports of Iranian oil, reducing Iranian exports by about one million barrels a day, Pompeo said.

US officials would need powerful leverage to push China and India, Iran's biggest customers, to cut all their imports; both nations have enormous energy needs. Chinese leaders are furious about the intensification of Trump's trade war and are wary of Trump's diplomacy with North Korea over the country's nuclear program.

Given all of this, experts say, it is unlikely that China and India will end all Iranian oil imports even after the expiry of the 180-day waivers.

"I think the United States has calculated that market stability and geopolitical relations take precedence over interests in order to reduce Iran's exports," said Henry Rome, an Iranian analyst with Eurasia Group, a consulting firm in the US. political risk based in Washington.

The global oil market, having foreseen that the Trump administration would grant certain exceptions, has not reacted significantly to this announcement. Brent prices, an international benchmark, changed little on Monday and are in the range of 73 to 74 dollars per barrel.

Ellen R. Wald, research fellow at the World Energy Center's Atlantic Council, a Washington-based research group, said at a news briefing about the sanctions that any price increase could be mitigated by additional supplies expected next year other exporters, including the United States.

If this happens, she added, the administration "can push countries to further reduce Iranian imports and not to affect US consumers too much."

Despite Trump's complaints about the nuclear deal, Britain, France and Germany consider it a success. The International Atomic Energy Agency, the UN's proliferation watchdog, has repeatedly said Iran respects the terms of the agreement.

Europeans are therefore angry because the United States is using its huge economic leverage to threaten European companies wishing to do business with Iran. Many of them have abandoned the country.

More generally, Europeans fear instability in Iran, which could lead to security problems and migrants, and they fear that the United States will take measures that could destabilize the country.

Europeans have sought to establish a alternative payment system with Iran that would bypass US sanctions, allowing them to conduct business without risking sanctions from the United States. But the system has not been developed yet and the Americans have basically ridiculed the idea, warning that they could sabotage the system by simply adding it to their blacklist of sanctions.

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