IRNA – Founder and president of the Indian strategic think tank Mantraya believes that the economies of all countries importing Iranian oil will be adversely affected by the US sanctions on Iran and this may further isolate the US at the international stage.
In an exclusive interview with the Islamic Republic News Agency (IRNA) here on the possible impact of the US sanctions on Iranian oil exports on the economies of the oil importing nations, Dr. Shanthie Mariet D’Souza said: “There is no doubt that all the importers of Iranian oil will be impacted by the US sanctions on Iran. The severity of the impact would depend on to what extent and how fast can a country diversify its imports and under what terms. This fallout on their economy, in a way, can lead to further isolation of the US.”
‘France, for example, has vowed to press ahead with plans to flout Washington’s Iran sanctions and boost the international role of the euro as it moves to lead Europe in defying the US efforts to act as the world’s “trade policeman”. Such an action to assure its own “economic sovereignty” will not be limited to France alone and may have significant impact on the way the US has sought to use the strength of the Dollar to become a trade policeman of sorts”, the seasoned analyst of the world affairs added.
To a question if the US waivers to 8 countries, including India to continue buying Iranian oil as a big victory for Tehran, she said: “Yes, it remains a fact that a lot can change in the period of next six months and these eight countries might seek further extension to the waiver or ways to work around it. The diplomatic negotiations will be crucial in determining the future course of the sanctions. But this does provide Iran with a short breathing space and reprieve.”
“The waivers are only a temporary relief for Tehran. The Trump administration has granted waivers for oil sanctions to eight countries-China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey for up to 180 days (6 months). Thus, the relief granted is only for a limited period and comes with a clause that each of these countries who have been granted this waiver will have to gradually cut down their oil imports from Iran. In a way, it is a way of making Tehran realize the gradual impact of the economic squeeze that the US is trying to impose on it. Those given temporary exceptions will deposit Iran’s revenue in escrow accounts where Tehran will be able to access those funds for the humanitarian purposes.”
To the question if Iran may make up its loss in oil exports due to the possible hike in the prices, Dr. D’Sauza said: “This assumption that hikes (if any) in oil price will make up for Iran’s loss of exports, is preliminary and the actual would be seen since the full sanction comes into play. Past instances do demonstrate that economic sanctions do have a negative impact on the target country’s economy. Iran’s economy suffered during the sanctions in the pre-2015 period and its economics did benefit after the sanctions were removed. So, to assume that Iran will not be impacted may not be correct.”