The Trump administration Monday dramatically escalated its campaign of economic warfare against Iran, announcing that it would not renew any waivers for countries to import Iranian oil after May 2.
The big picture: Per Secretary of State Mike Pompeo, the goal is for Iran to reverse its foreign and domestic policies and accede to 12 demands he set out in a speech last year. But the plan is certain to face pushback from importers of Iranian oil, raise prices for consumers and further erode the value of sanctions as a tool of diplomacy.
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The lapsing waivers, following the U.S. designation of Iran’s Islamic Revolutionary Guards Corps as a foreign terrorist organization, expand the administration’s approach of unilateral coercion against Iran.
Where it stands: In anticipation of the announcement, world oil prices hit their highest level since November, when the U.S. re-imposed sanctions on Iran following withdrawal from the nuclear deal.
With Libya in chaos and Venezuelan exports depressed by sanctions and deteriorating infrastructure, it will be difficult for consumers of heavy crude to find adequate substitutes despite the administration’s claims that Saudi Arabia, the United Arab Emirates and U.S. production will increase to fill the gaps.