President Biden\u2019s aides are preparing to hit Iran with economic sanctions over Tehran\u2019s attack on Israel, but experts say they face limited meaningful options for doing so without antagonizing China or risking a spike in the price of oil.<\/p>\n
In retaliation for a strike against its consulate, Iran over the weekend sent more than 300 drones and missiles toward Israel. The unprecedented aerial barrage did not cause major damage or injuries, as U.S.-led forces intercepted most of the projectiles.<\/p>\n
Still, U.S. officials and their European allies are discussing potential economic responses to Iran, as leading Western officials converged Monday on Washington for the spring meetings of the International Monetary Fund and World Bank. Their options are limited because Iran is already one of the most heavily sanctioned countries in the world, with U.S. penalties in effect on its banking, manufacturing and energy sectors.<\/p>\n
Among the most obvious remaining options is aggressively expanding sanctions on Chinese firms that have bought large quantities of Iranian crude oil exports, which have provided a financial lifeline for Tehran as it remains cut off from the West. The United States has over the last year imposed sanctions on some commercial links in the oil trade between China and Iran, but experts say the administration could go further by hitting many more Chinese refineries and banks with the restrictions.<\/p>\n
Doing so carries its own risks, however. Treasury Secretary Janet L. Yellen and other administration officials have tried stabilizing relations with China in recent months, and a sudden blow to energy production could infuriate Beijing. Additionally, cutting off sales of Iranian crude could cause oil prices to spike globally amid tighter supply, potentially leading to higher gas prices ahead of the 2024 presidential election.<\/p>\n
\u201cThere are not a lot of options that are game changers, because so much of Iran is already sanctioned,\u201d said Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, a foreign policy think tank. \u201cBut if you really want to cut off oil revenue for Iran, you have to go through China and Chinese institutions.\u201d<\/p>\n
Sanctioning Chinese banks for facilitating the purchase of Iranian oil could remove as many as 1.5 million barrels per day from global markets. That would send the price of oil above $100 per barrel, in what would be a political nightmare for the Biden administration, said Bob McNally, president of the Rapidan Energy Group, a consultancy.<\/p>\n
\u201cThe last thing Biden wants is higher gas prices, so he wants Iran selling its oil to China. He does not want that oil to be shut in. It\u2019s as simple as that; he can\u2019t afford to sanction Iran\u2019s oil,\u201d McNally said. \u201cThey could do some symbolic stuff, to go after a little trader here or there, but that\u2019s likely about it.\u201d<\/p>\n
Biden has urged calm in the wake of Iran\u2019s attack. The United States has made clear it will not participate in any Israeli military attack against Iran, and senior officials have stressed that their aims are to \u201cde-escalate regional tensions\u201d to prevent a broader conflagration. Israel\u2019s war cabinet met on Monday to deliberate potential responses.<\/p>\n
While the West is ruling out participating in a military response, an economic response to Iran\u2019s actions appears increasingly certain. European Commission President Ursula von der Leyen said officials in Brussels would discuss tougher sanctions against Iran. \u201cWe will reflect on additional sanctions against Iran in close cooperation with our partners,\u2019 she said in a statement.<\/p>\n
U.S. officials have, for instance, discussed tightening Iran\u2019s access to frozen funds earmarked for humanitarian relief, according to two people familiar with the matter, who spoke on the condition of anonymity to describe private conversations. They have also discussed imposing additional sanctions on Iranian officials and businesses. The first could prove largely symbolic: Iran is already hardly accessing these funds. It\u2019s also not clear how impactful sanctions on other firms, such as international suppliers of parts for Iranian drones, would prove.<\/p>\n
A Treasury spokeswoman declined to comment on ongoing deliberations, but Yellen is scheduled to address the media on Tuesday.<\/p>\n
The Biden administration also faces pressure from Capitol Hill to act. The House overwhelmingly approved legislation on Monday aimed at cracking down Iranian oil sales to China. Critics have argued that Biden should have gone further to ensure Tehran is not able to reap billions from its oil exports.<\/p>\n
\u201cIn the wake of Iran\u2019s massive and disproportionate attack on Israel, and with an eye toward escalation, all nonmilitary measures must be on the table. This includes targeting Iran\u2019s ongoing oil sales,\u201d said Matthew Levitt, director of the Jeanette and Eli Reinhard Program on Counterterrorism and Intelligence at the Washington Institute for Near East Policy, a D.C.-based think tank.<\/p>\n
Still, other experts say the challenge is that Washington has already been too aggressive in its posture toward Tehran. Iran has been under severe economic restrictions since the Trump administration abandoned the nuclear deal reached by President Barack Obama, and that gives policymakers little room to operate in the face of new emergencies.<\/p>\n
\u201cWe\u2019ve been at maximum pressure [on Iran] since basically November 2018, and there\u2019s not much more that can be done,\u201d said Esfandyar Batmanghelidj, founder and CEO of the Bourse & Bazaar Foundation, a think tank focused on international affairs and economic diplomacy. \u201cThis is really the problem with maximum pressure: You end up in a position where suddenly what you think is a question of Iran policy is no longer just a question of Iran policy.\u201d<\/p>\n<\/p>\n
President Biden\u2019s aides are preparing to hit Iran with economic sanctions over Tehran\u2019s attack on Israel, but experts say they face limited meaningful options for doing so without antagonizing China or risking a spike in the price of oil. In retaliation for a strike against its consulate, Iran over the weekend sent more than 300 […]<\/p>\n","protected":false},"author":0,"featured_media":3193,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3192","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=3192"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/3192\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/3193"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=3192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=3192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=3192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}