Obama Approves Iranian Oil Sanctions

Posted March 30th, 2012 at 4:15 pm (UTC-5)
Leave a comment

U.S. President Barack Obama is moving ahead with sanctions against Iran's vital oil exports, deciding there is enough crude on the world market so that U.S. allies won't be hurt if they curtail their purchase of Tehran's oil.

Mr. Obama's decision Friday will allow the U.S. — starting in late June — to impose sanctions against foreign banks that make oil-related financial transactions with Iran's central bank. The U.S. action, in concert with a planned European embargo of Iranian oil purchases, is aimed at pressuring Iran to abandon its disputed nuclear weapons program. Tehran maintains its nuclear work is for civilian purposes.

By U.S. law, Mr. Obama had to decide by Friday whether the world oil supply was sufficient and prices acceptable enough so that Iran's customers could “significantly” cut their imports. Iran is the world's third largest oil exporter, sending more than 2.5 million barrels of oil outside the country each day. Among its major buyers are China, South Korea, India, France, Britain, Spain, Greece and Italy. In a statement, the U.S. president said there is a “sufficient supply” of oil on the world market.

But the cost of crude has been increasing in recent months, leading to the highest gasoline prices ever in the U.S. for this time of year. The price now tops $1 a liter in some locations. Even though that cost is much lower than in some other parts of the world, it has become a political problem for Mr. Obama as he runs for re-election.

Mr. Obama said he would “closely monitor” whether the world market can continue to reduce its purchase of Iranian oil.

The U.S. has already granted waivers of the sanctions to 10 European Union nations and Japan because they have already cut their Iranian oil purchases. The EU embargo of Iranian oil is set to start in July.