19 Mar 2024
Tuesday 2 October 2018 - 10:58
Story Code : 321754

'I doubt US sanctions will isolate Iran' - Prof of national security affairs



Sputnik - President Donald Trump's intention to impose sanctions on Iranian crude exports could entail a significant drop in global oil supply. This is what analysts told CNBC earlier this week amid concerns that oil prices could reach a three digit number.




Sputnik discussed the correlation betweenIran sanctions and oil prices withGawdat Bahgat, professor ofnational security affairs atthe National Defense University's Near East South Asia Center forStrategic Study.

Sputnik: To what extent have Iranian sanctions been figured intofuture prices already?

Gawdat Bahgat:The oil market is driven more bypsychology and I believe it is clear that the Trump administration is determined toimpose a full embargo onIranian oil, butalso it is clear that Iran is determined tofind ways toexport its oil.

Just a few months ago, President Rouhani said that if his country will be prevented fromexporting oil, all other countries inthe Persian Gulf will not be allowed toexport oil. Because ofthis, the market is reacting and I believe the reality will be clear ina few weeks, who will prevail and whether Iran will be completely isolated, which I doubt.

Sputnik: I believe you're referring tothe threat ofIran toblock the Strait ofHormuz, which most people think is fairly unlikely asa scenario simply because it would lead tomilitary action againstIran byvarious countries. Then we also have the position ofthe European countries; we have Turkey, we have China and others, who have said they're going tocontinue buying oil fromIran and there's even talk ofcreating a system tocircumvent the US sanctions. Do you think it will kick intime?

Gawdat Bahgat:I would not rule outthat Iran will atleast maintain thethreat toclose the Strait ofHormuz; atthe end ofthe day, Iran depends heavily onoil and if it feels that it is going tostarve, they will do anything they can. In my mind, I do not think Iran will close the strait butwill use it asleverage tobring more pressure onthe United States toallow Iran toexport oil, because Europe, China, India, many other countries, depend onoil fromthe Strait ofHormuz.

If Iran keeps threatening and other countries see that there is credibility inthe Iranian threats, they will put some pressure onthe United States toallow Iran toexport some ofits oil. This is very speculative and probably inthe next few weeks, we will know more. As you pointed out, there are some countries, not only China, India, Turkey, Russia, and some other countries, butalso the European Union is not going alongwith the Trump administration tocompletely isolate Iran.

Sputnik: How effective do you think their aim will be? They have said that they've decided togo forward withthe creation ofa payment system, what are your hopes forthat? Do you think that it would be effective?

Gawdat Bahgat:I believe the Iranians, so far, have taken the right approach. They have not overreacted, theyhave not withdrawn fromthe nuclear deal.More or less they're playing the victim role fromthe Iranian perspective and this is what the world is seeing: the United States withdrew fromthe nuclear deal, Iran has honored its commitment. But also, atthe same time, Europe has much closer relations withthe United States; the American and European economies are very inter-dependent onthe each other, so I do not believe atthe end ofthe day Europe will take Iran's side and leave the United States.

Sputnik: What can you say aboutthe tensions betweenIran and the US and their allies? There's sort ofa fight toput pressure and atthe same time keep the oil prices down?

Gawdat Bahgat:Iran is trying toshow the United States that it can fight back and that the closure ofthe United States consulate inIraq is a sign that Iran is reacting and there is a low-intensity conflict going onbetween Iran and the United States and I believe it is important not totake it forgranted. Iran has options, there's no doubt the United States is much stronger, butIran has denied that it is behindthe attack onthe US diplomatic mission inIraq, butit is clear that even if Iran is much weaker thanthe United States, Iran has options.

https://theiranproject.com/vdcbs8bfarhb5zp.4eur.html
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