Iran International
Despite President Donald Trump's announcement to reinstate his maximum pressure sanctions on Iran, experts doubt the policy can truly cut Tehran's oil shipments to force the concessions he seeks.
Although concerned about Trump's announcement last week, officials in Tehran insist that the country will continue its oil exports through illicit channels, drawing parallels to Russian oil sales.
Iran's oil minister said this week that Trump's sanctions policy on Tehran has failed, along with his goal of cutting Iran's oil exports to zero.
"The more they restrict us, the more complex our response will be," Mohsen Paknejad was quoted as saying by state media. "The dream of cutting Iran's oil exports to zero is one they will never achieve."
The CEO of the National Iranian Oil Company, Hamid Boord, said on February 13, "We are striving to ensure that oil exports continue without interruption despite possible challenges, so that Iran's economic engine does not stop."
Iran’s oil-dependent economy has faced severe financial difficulties since 2018, when President Trump withdrew from the 2015 JCPOA nuclear deal and imposed oil export sanctions on Tehran.
This cut exports to the 200,000–300,000 barrels per day range for the remainder of his first term, though shipments rose after Joe Biden took office. Shortly after returning to the White House, Trump vowed to bring Iran’s oil exports down to zero until Iran fully renounces its nuclear weapons option.
However, some analysts doubt whether the Trump administration can significantly curb Iran’s oil exports, which continue to flow to China through a shadow fleet of tankers and various circumvention methods.
Javier Blas, a Bloomberg columnist covering energy and commodities, expressed serious doubt this week about the US ability to curb Russian, Iranian and Venezuelan oil smuggling efforts.
He pointed to the substantial profits involved in the trade for numerous shipping companies and middlemen, who are adept at finding ways to benefit from illicit shipments.
“The sums involved are so vast and the business so lucrative that everyone involved — sellers, buyers and intermediaries — is highly motivated to find alternative routes, tricks and ploys to keep the wheels turning. Over time, the enforcers grow tired and the smugglers become wiser,” Blas argued.
The Paris-based International Energy Agency (IEA) expressed doubt on February 13 if recent additional sanctions imposed on Russia by the United States can reduce illicit shipments.
"Time and again, oil markets have shown remarkable resilience and adaptability in the face of major challenges – and this time is unlikely to be different," the IEA said.
Blas also pointed that industrial countries are sensitive to higher oil prices, which weakens their willingness to engage in real and tough sanctions enforcement.
In addition, Blas drew attention to Trump’s apparent uncertainty when he announced the return of maximum pressure against Iran.
“On paper, it was a strong action. But Trump undermined his own thunder by saying, pen in hand, that he was ‘torn about’ the memo. ‘Everyone wants me to sign it,’ he said, adding ‘I’m signing this, but I’m unhappy to do it’, Blas wrote.
He also argued that after Trump’s directive, no major sanctions enforcement action took place by his administration.
A separate statement was issued announcing measures against Iran’s oil shipping network, but the move targeted a single large oil tanker and two small ones. "Over the last few years, Iran has relied on more than 500 tankers to move its oil," it said.
Other oil experts have also voiced doubts to Iran International. “We’re not yet convinced that Iran’s oil exports will drop to the levels seen in May 2019, mainly because there wasn’t an extensive global dark fleet available back then, unlike what we have today," Tanker Trackers said last week.
