US Sanctions on Iran and its Implications

Adedoyin Shittu
20% Complete
 07-Nov-2018

Before July 2015; according to the Obama administration, Iran large stockpile of enriched Uranium and centrifuges was enough to create around 10 bombs. It was estimated that Iran could produce nuclear weapons within two to three months; which will be the time needed to produce 90% uranium. Therefore sanctions was imposed on the country in order to halt Iran from Uranium enrichment, cripple its economy, and this caused the country almost $160 billion in oil revenue between 2012 and 2015.

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Therefore to redeem the economy and to release the economic sanctions imposed on Iran, a deal was agreed upon on 14th July, 2015 after months of deliberation between the Iranian government and the Joint Comprehensive Plan of Action (JCPOA). The JCPOA is a coalition of 8 countries including Iran. The deal imposed certain restrictions on how Iran developed nuclear capabilities in exchange for the US relieving them of the imposed economic sanctions. However, the US government is to re-certify the deal every 90 days or the sanctions kick back in. Iran. Though it was agreed that after 10 -15 years, Iran will be free to do whatever it want to do and build up a nuclear arsenal if it wants.

In order for the sanctions to be released, Iran will allow for the International inspections and monitoring in its nuclear development. The deal also includes; removing key elements from Iran for creating bombs thereby increasing the time needed to make bombs. Iran also agreed not to engage in activities including research and development for creating nuclear weapons, and sales of weapon in the troubled region. After the deal was sealed, Iran was able to gain access to over $100 billion dollars of assets frozen overseas and was able to resume to selling oil in the International transparent market.

Donald trump has always referred to the deal as a “Deal from Hell” and since his emergence as the US President, he has wanted to re-negotiate the deal. In May of this year, he threatened to pull out of the deal but the other JCPOA countries declared their determination to stand by the deal. However the US government true to the Trump administration, imposed sanctions on Iran. These sanctions were effected on Monday, 5th November, 2018.

The Trump administration had said that it is confident that the sanction against Iran which came into effect on Monday will have the intended effect of altering the Iranian regime behaviour. The sanction covers Iran banking and energy sector and reinstates penalties for countries and companies in Europe, Asia and elsewhere which do not halt trade deals and the importation of the Iranian oil. However eight countries have been exempted from the importation ban. They include China, Taiwan, Greece, Italy, Japan, Turkey, South Korea and India. However the Trump administration has asked these countries to bring down their purchase of the Iranian oil to zero as soon as possible. The US has also allowed Iran to keep important energy supplies and food supplies to Iraq.

However this decision by the US has drawn a barrage of criticism from different quarters as many as tagged it “Global bullying”. Proponents of the deal have come out to say this move will isolate the US since it was the US government that bridged the deal and not the Iranians government. The European Union including allies of the US (France, Germany and the UK) have also slammed the US measures of “arm twisting” the Iran government to bring them back to the negotiation table. Americans allies strongly urged the US and Trump to stay committed to the deal brokered in 2015 but Trump believes he can negotiate a new and lasting deal that benefits all of Iran

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According to Trump, the present deal put weak limit on Iran nuclear activities and no limit on its sinister activities in Yemen and Syria. Also the Trump administration thinks that the Iranians are not abiding by the deal because they are developing long range ballistic missiles. Trump also said that any nation that assists Iran with its nuclear aspirations will also be sanctioned.

The Iranian government greeted the re-imposition of the sanctions with air defence drills and the acknowledgement from the president, Hassan Rouhani, that the country faces a “war situation” have raised tension in the troubled Middle East.

Presently there seems to be no sign of yielding on the side of the Iranian government, they believe the America government can renegade in the future on any sort of deal made, so therefore the Americans cannot be trusted to uphold its end of any deal. Iran foreign ministry says Iran has no concerns over the US sanctions.

Though the US has exempted humanitarian goods from the sanction, this sanction will have the greatest effect on the average Iranian person because the US government is trying to isolate Iran from the rest of the world. This will also push up the prices of everyday commodities.

Iran major export is crude oil and it is the third largest exporter of the product. Crude oil is exchanged in dollars. For other countries especially the US allies that still hope to maintain trade deals with Iran, things will be more difficult because they will have to circumvent events that will allow the use of the dollar. Using the dollar for trade will automatically open them up to apply the sanctions imposed by the US government.

Over the years, before the present deal that the US government pulled out from, Iran had always had various ways of selling their oil. They have resulted in crude method and use of black market to sell their oil. Iran foreign minister told USA today that, “If we cannot openly trade our commodities, if we cannot get what we want to get from the open, transparent international transactions, we will not lie down and wait to die. We will do it. We will do it whatever means necessary.” It should however be noted that the sanctions might have contributed to the push upwards to the price of the crude oil higher in the International market.

This sanction seems to be a double standard by the US government. Saudi Arabia, an ally of the US, has been in negotiations with the US and other countries in pursuit of a nuclear deal. The country found a willing partner in the Trump administration, which has signalled far greater support for a deal than its predecessors. Also the US government did not take harsh steps to bring the Saudi government to book as they were fingered to be involved in the death of Jamal Khashoggi but the US government is ready to act tough towards the rival of the Kingdom.

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