Iran Sanctions
Abstract
The international coalition that is imposing progressively strict economic sanctions on Iran is broadening and deepening, with increasingly significant effect on Iran's economy. The objective, not achieved to date, remains to try to compel Iran to verifiably confine its nuclear program to purely peaceful uses. As 2012 begins, Iran sees newly-imposed multilateral sanctions against its oil exports as a severe threat -- to the point where Iran is threatening to risk armed conflict. Iran also has indicated receptivity to new nuclear talks in the hopes of reversing or slowing the implementation of the oil export-related sanctions. The energy sector provides nearly 70% of Iran's government revenues. Iran's alarm stems from the potential loss of oil sales as a result of the following: (1) A decision by the European Union on January 23, 2012, to wind down purchases of Iranian crude oil by July 1, 2012; (2) Decisions by other Iranian oil purchasers, particularly Japan and South Korea, to reduce purchases of Iranian oil; and (3) The willingness of other oil producers with spare capacity, particularly Saudi Arabia, to sell additional oil to countries cutting Iranian oil buys. This confluence of policies has already begun to reduce Iran's oil sales and might reduce them by as much as 40% (1 million barrels per day reduction out of 2.5 million barrels per day of sales). Iran is widely assessed as unable to economically sustain that level of lost oil sales. The signs of economic pressure on Iran are multiplying. The value of Iran's rial has dropped precipitously since December 2011. Iranian leaders have admitted that Iran is virtually cut off from the international banking system and is increasingly trading through barter arrangements rather than hard currency exchange. In the 112th Congress, legislation, and a Senate Banking Committee bill reported out on February 2, 2012, would enhance both the economic sanctions and human rights-related provisions of CISADA and other laws.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 10, 2012
- Accession Number
- ADA584279
Entities
People
- Kenneth Katzman
Organizations
- Library of Congress