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Obama inches closer to new Iran oil sanctions
US president outlines measures to further isolate Iran, judging move will not hit US consumers or allies.
Last Modified: 30 Mar 2012 19:30

US President Barack Obama is inching closer to imposing sanctions against countries that buy oil from Iran, saying there is enough crude oil on the international markets for countries to cut Iranian imports.
   
Obama signed a memorandum on Friday in which he warns countries to stop buying oil from Iran, or else face further measures.

In order to provide flexibility to US allies, the memorandum allows Washington to grant waivers to nations that significantly reduce their purchases of Iranian oil.

Al Jazeera's Patty Culhane, reporting from Washington, said 11 countries have received these waivers from the US government.

"The sanctions telling counties they have to choose - do business with Iran or the US - haven't gone into effect and it is not clear if they will.

"These sanctions aren't necessarily automatic if for example China, India and the others don't follow suit. In fact, the White House, when pushed, admits it is not an automatic thing."

Spare oil capacity

Domestic and foreign policy concerns have complicated the administration's decision to pursue new oil sanctions.

Many of the countries that buy oil from Iran are US allies, including several European Union nations, Japan, South Korea and India.

Under a sweeping defence bill Obama signed at the end of December, the president had until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran.

The president said he based his determination on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors.

He said he would keep monitoring the global market closely to ensure it could handle a reduction of oil purchases from Iran.

With oil prices already rising this year amid rising tensions between Iran and the West, US officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices.

That is particularly important for Obama in an election year that has seen an increasing focus on gas prices.

The EU oil embargo, approved in January, is set to take effect in July.

'Nations on notice'

Senator Bob Menendez, a Democrat who co-authored the legislation with Republican Senator Mark Kirk, said he welcomed Obama's support in targeting Iran's central bank.

"Today, we put on notice all nations that continue to import petroleum or petroleum products from Iran that they have three months to significantly reduce those purchases or risk the imposition of severe sanctions on their financial institutions," Menendez said in a statement.

He predicted most countries would cut their purchase of oil from Iran, either out of fear of sanctions, or a shared fear over Iran's alleged pursuit of nuclear weaponry.

The US has not said what constitutes a significant reduction in Iranian oil purchases, and analysts believe the administration could use different metrics for different countries.

Source:
Agencies
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