U.S. officials and energy analysts noted that Iran has experienced a sudden decline in oil based revenue due to the pressure from the Obama administration and its European allies. The White House rebuffed any concerns by stating that there is sufficient availability of oil from sources other than Iran. This will allow America to limit its import of Iranian oil, increasing how deeply Iran feels the lost business in the next few months.
U.S. officials and Industry analysts agree that other exporters such as Saudi Arabia will make up the demand usually filled by Iran’s exports. These predictions come after concerns about ensuring there will be no shortage of oil availability and that the global market will not feel any strain or see any sharp increase in price per gallon.
It is understood that this has been an intentional effort to strain Iran’s economy before the peace talks scheduled in the upcoming weeks. Officials see this as a necessary step to prepare ground for the implementation of vigorous economic sanctions which will be put in place in about three months. They believe that Iran’s loss of billions of dollars in revenue as their customers turn to other sources for petroleum coupled with the upcoming July European embargo will make Iran take the threat of stronger restrictions seriously.
The purpose of the sanctions is to get Iran to agree with heavy restrictions on its nuclear program. Officials believe that showing Iran that they need the income from their oil exports will provide the proper leverage and increase the chance of success during the diplomatic session.
Intelligence agencies have come to the conclusion that Iran is using its reportedly civilian nuclear infrastructure to create parts to put together nuclear weapons, causing worldwide fear of military strikes from Iran or on Iran by Israel. Iran denies any activities related to the development of nuclear weapons.
President Obama’s administration believes that the move could amount to Obama taking on greater criticism during an election year. If oil prices were to unexpectedly skyrocket due to the shortage of Iranian oil the President could draw fire from the American voters.
A senior White House official said to reporters, “We are fully prepared to go forward with these sanctions,” on Friday. They continued, “The best outcome here is to have the broadest number of countries working together to send a clear message to Iran.”
With negotiations expected to begin in the middle of April, the Obama administration has encouraged at least 11 countries to agreements to either cease or limit imported oil from Iran. Turkey officials announced that they were in talks with Saudi Arabia about making up for the 10% reduction pledge they made concerning the oil importation.
The new sanctions will be aiming for the Central Bank of Iran which is the bank that handles the transactions concerning almost all of Iran’s exported oil sales. One sanction would go into effect June 28th and will limit the business of any company that transacts business with the bank.