Trump to sanction allies over Iran oil, causing new friction

Trump to sanction allies over Iran oil, causing new friction

AFP/File / ATTA KENAREDrivers in Tehran fill up their tanks in November 2018 as the United States keeps ramping up sanctions on oil exports

The United States said Monday it would start imposing sanctions on friends such as India that buy Iranian oil, in its latest aggressive step to counter Tehran that could jeopardize US relationships.

One targeted country, Turkey, vowed to defy the US demands that sent global crude prices spiraling higher, although President Donald Trump tweeted that his close ally Saudi Arabia would "more than make up" for cuts in Iranian oil.

In seeking to reduce Iran's oil exports to zero, the Trump administration is targeting the country's top revenue maker in its latest no-holds-barred move to crush the economy and scale back the clerical regime's influence.

"The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime's destabilizing activity threatening the United States, our partners and allies and security in the Middle East," the White House announced.

Eight governments were initially given six-month reprieves from the unilateral sanctions on Iranian oil imposed last year by the United States.

One of the most significant buyers is India, which has warm ties with Washington but disagrees on the US insistence that Iran is a threat.

India has been working with Iran on a seaport in hopes of circumventing Pakistan, home to virulently anti-Indian militants.

New Delhi is "studying the implications of the decision," an Indian source said, declining further immediate comment.

Other countries affected include China and Turkey, opening up new friction in contentious relationships if the United States goes ahead with sanctions over buying Iranian oil.

"We do not accept unilateral sanctions and impositions on the issue of how we will establish relations with our neighbors," said Turkish Foreign Minister Mevlut Cavusoglu, adding that the announcement "will not serve regional peace and stability."

Secretary of State Mike Pompeo insisted that the United States would punish countries that buy Iranian oil after May 2, without spelling out how.

"We've made clear -- if you don't abide by this, there will be sanctions," Pompeo told reporters. "We intend to enforce the sanctions."

The others -- Greece, Italy, Japan, South Korea and Taiwan -- have already ended or heavily reduced their purchases from Iran.

South Korea's foreign ministry said in a statement it was consulting with the United States and would do its "utmost" ahead of next week's deadline.

- Pressure keeps building -

AFP / ANDREW CABALLERO-REYNOLDSUS Secretary of State Mike Pompeo announces the latest measures to target Iran

Last year, Trump withdrew the United States from an accord negotiated by his predecessor, Barack Obama, under which Iran drastically reduced its nuclear program in return for promises of sanctions relief.

Pompeo said the United States would keep raising pressure until Iranian leaders come back to the table, although he appeared little concerned with wooing them, saying he was making his demands to "the ayatollah and his cronies."

The Iranian foreign ministry said the US sanctions were "illegal" from the start.

Trump's tough Iran policy has already alienated close allies, with the Europeans supporting the 2015 accord -- with which United Nations inspectors say Iran is complying -- and setting up a way for their businesses to evade US sanctions.

Along with Saudi Arabia, a key backer of Trump's push is Israeli Prime Minister Benjamin Netanyahu, who hailed the latest move as "of great importance."

Iran earned $52.7 billion from petroleum exports in 2017, according to the oil cartel OPEC, before the reimposition of US sanctions.

Experts say it is unlikely that Iranian exports will ever be reduced completely to zero, with a black market likely to exist.

- Oil prices rise -

AFP/File / SAM PANTHAKYA cyclist passes a refinery of Essar Oil in Vadinar in western India, which is looking for ways to meet growing energy needs

Oil prices jumped overnight on reports of the action by the United States.

US benchmark West Texas Intermediate for May delivery closed up another 2.7 percent at $65.70 a barrel, while Brent crude in London rose 2.9 percent to $74.04.

Backing Trump's comments, Saudi Arabia's Energy Minister Khalid al-Falih said the kingdom would work to "stabilize" the oil market.

Trump's move has also been good for US business, with energy-hungry India's oil purchases from the United States skyrocketing 350 percent from 2017 to 2018.

India -- which is also facing US pressure not to buy from Venezuela, where Trump is seeking to topple leftist President Nicolas Maduro -- bought 21.3 million tonnes of Iranian oil in the 10 months to January, a jump of 16.3 percent, although purchases dipped after the sanctions announcement, according to commerce ministry data.

The United States still has an exemption in place until mid-June for Iraq, which relies on electricity from its neighbor to cope with chronic blackouts that have triggered unrest.

Michael Fuchs, who was a senior adviser to former secretary of state Hillary Clinton, said the Trump administration was "doing everything in its power to force Iran to pull out of the nuclear deal and start building a nuclear weapon."

"And in the process, the US will anger all of our allies. Just plain dumb," he tweeted.

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