US considering new sanctions on Iranian oil sales to China: WSJ

The United States is weighing new sanctions on Iran’s oil sales to China as a way to pressure Tehran to commit to a nuclear deal, sources familiar with the matter told The Wall Street Journal (WSJ) on Monday.

US negotiators continue to work with European and international partners in Vienna, Austria in an attempt to revive the Joint Comprehensive Plan of Action (JCPOA) – the 2015 agreement that curbs Iran’s nuclear programme in exchange for the lifting of some of the sanctions Tehran faces.

But as those negotiations stall, the US is mulling alternative options to encourage Iran to stay at the negotiating table or up the cost of leaving it, US officials and people familiar with the matter told the WSJ.

One option under consideration would reduce Iran’s growing crude sales to China, the newspaper reported.

“There is not much left to sanction in Iran’s economy,” a US official told the WSJ. “Iran’s oil sales to China is the prize.”

Beijing is Tehran’s main oil client. In the plan under consideration, the US would take aim at Iran’s oil sales to China by targeting shipping networks that help export an estimated one million barrels per day, officials told the WSJ.

But the new plan would only go into effect if nuclear talks fail, those officials said.

The US would aggressively enforce current sanctions already banning dealings with Iran’s oil and shipping sectors through strong enforcement and legal action, according to the WSJ.

With mounting concerns that the effort could have unintended consequences and may even encourage Iran to accelerate its nuclear programme, other options under consideration include a diplomatic campaign to persuade China, India and other major crude-oil buyers to cut imports of the commodity, non-oil trades, debt financing and financial transfers, another official told the WSJ.

Iran’s president-elect, Ebrahim Raisi, who will be inaugurated next month, has said that Tehran will not agree to the nuclear deal without the lifting of US sanctions first.

Iranian Deputy Foreign Minister Seyed Abbas Araghchi addressed the issue in a series of tweets on Saturday.

US & UK need to understand this and stop linking a humanitarian exchange—ready to be implemented—with the JCPOA.

Keeping such an exchange hostage to political aims achieves neither.

TEN PRISONERS on all sides may be released TOMORROW if US&UK fulfill their part of deal. 2/2

— Seyed Abbas Araghchi (@araghchi) July 17, 2021

“We’re in a transition period as a democratic transfer of power is underway in our capital,” he tweeted. “Vienna talks must thus obviously await our new administration. This is what every democracy demands.”

His second tweet referenced the 2015 JCPOA.

“US & UK need to understand this and stop linking a humanitarian exchange—ready to be implemented—with the JCPOA. Keeping such an exchange hostage to political aims achieves neither. TEN PRISONERS on all sides may be released TOMORROW if US&UK fulfill their part of deal,” Araghchi added.

Then-US President Donald Trump exited the nuclear agreement with Iran in 2018, criticising it as being too lenient towards Tehran. Trump then reimposed widespread sanctions meant to pressure Iran into signing a new nuclear and security deal.

Under current US President Joe Biden, Iran’s crude-oil exports, mostly to China, have climbed.

US Republicans and other critics of Biden’s Iran policy have said his leniency and lack of enforcement of sanctions has only emboldened Tehran.

The Biden administration has recently announced the blacklisting of Iranians for alleged violations of the oil-trade sanctions.