From Consortium News
Secretary of State Mike Pompeo's announcement last week that no importer of Iranian oil will henceforth be exempt from U.S. sanctions is as risky as it is misguided. The withdrawal of waivers as of this Thursday effectively gives eight importers dependent on Iranian crude -- India, Japan, South Korea, China, Turkey, Taiwan, Italy, and Greece -- 10 days' notice to adjust their petroleum purchases. This is now a full-court press: The intent is to cut off Iran's access to any oil market anywhere as part of the administration's "maximum pressure" campaign against Tehran. "We are going to zero," Pompeo said as he disclosed the new policy.
Nobody is going to zero. The administration's move will further damage the Iranian economy, certainly, but few outside the administration think it is possible to isolate Iran as comprehensively as Pompeo seems to expect. Turkey immediately rejected "unilateral sanctions and impositions on how to conduct relations with neighbors," as Foreign Minister Mevlut Ã"¡avusoglu put it in a Twitter message. China could do the same, if less bluntly. Other oil importers are likely to consider barter deals, local-currency transactions, and similar "workarounds." In the immediate neighborhood, Iraq is so far ignoring U.S. demands that it cease purchasing natural gas and electricity from Iran.
Insights on Overreach
There are a couple of insights to be gleaned from this unusually aggressive case of policy overreach.
First, the new turn in the administration's Iran policy appears to mark a decisive defeat for President Donald Trump in his long-running battle with his foreign policy minders. It is now very unlikely Trump will achieve any of his policy objectives, a number of which represent useful alternatives to the stunningly shambolic strategies advanced by Pompeo, National Security Adviser John Bolton, and other zealots in the administration.
Weakened by relentless "Russia-gate" investigations, for instance, the president has little chance now of improving ties with Moscow or negotiating with adversaries such as Iran and North Korea, as he has long advocated.
In a Face the Nation interview Sunday, Iranian Foreign Minister Mohammad Javad Zarif said Tehran would be open to bilateral talks under the right conditions. It was the second time in a week that Zarif made this point. But those around Trump, not least Bolton and Pompeo, are sure to block any such prospector sabotage talks if they do take place, as they did in Trump's second summit with Kim Jong-un, North Korea's leader, in late February.
Second, this administration's foreign policy has steadily assumed an irrational character that may be unprecedented in U.S. history. This is perilous. The administration's near-paranoiac hostility toward Pyongyang and Moscow are cases in point. So is its evident indifference to alienating longstanding allies across the Atlantic and in Asia. As of this week, however, Pompeo's "down to zero" policy makes Iran the most immediate danger.
Persian Gulf Choke-point
Iranian officials, including Zarif, now threaten to close the Strait of Hormuz, choke-point of the Persian Gulf, if Iranian tankers are prevented from passing through it. This is an indirect warning that the Iranian military could confront the U.S. Fifth Fleet, which operates in the Gulf and adjacent waters.
A sharp spike in oil prices is another danger with which the administration now lands itself. Taken together, U.S. sanctions against Venezuela and Iran are intended to take roughly 2 million barrels of oil a day out of the market.
Saudi Arabia has pledged to make up the lost supply, but many analysts question its ability to sustain an increase in output given the advancing depletion of its long-productive Ghawar field. Spare capacity among producers is already wafer-thin. Do we need to risk another oil crisis, given the flagging global economy?
Trump's foreign policy minders also risk alienating allies South Korea, Japan, and India, the Europeans whose cooperation the U.S. needs on numerous other policy questions. In the case of China, the administration puts progress on a nearly complete trade deal and Beijing's leverage with North Korea in jeopardy.
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