For the Iranian regime, the U.S. sanctions that are scheduled to begin in November are a threat to its oil exports. The country is already experiencing a downswing in the amount of oil it is exporting and many nations are looking for alternatives to avoid risking penalties from the U.S. for purchasing Iranian oil.
The regime is brazenly bullying the international community and appears to be attempting to create a confrontation with the U.S. and neighboring nations. According to a report by the Iranian state-run Mehr news agency, if Iran can’t use the Strait of Hormuz for its oil exports because no one buying them, then the regime will block the Strait. Essentially, they will not allow anyone else to ship their oil if they can’t.
Threat to Block Strait Not New
Members of the Iranian regime and other officials have been threatening to halt exports out of the Strait since July. With the renewing of some sanctions occurring in August, the threats appear to have gotten more explicit. Sanctions against the Iranian oil industry are set to go into effect in November.
“There will be no security for others either and no other crude will be exported from this region,” said Mohammad Bagheri, Iranian Armed Forces Chief of Staff. U.S. and other military forces in the area are preparing for any moves by Iran to block the Strait. The Iranian regime has also cut its oil prices in an attempt to keep exports high, even as the sanctions go into effect.
“It’s an incorrect belief that all oil producers would be able to export, and Iran would be the only country unable to export oil,” said Iranian President Hassan Rouhani last month. At the mouth of the Persian Gulf, the Strait is a traffic lane for a large number of tankers carrying about 30% of all seaborne-traded crude oil annually.
Efforts to Isolate Iran Politically and Economically
For the Trump administration, the point of these sanctions is to bring Iran to the negotiation table by isolating the country both politically and economically. Since the U.S. pulled out of the Joint Comprehensive Plan of Action (JCPOA) in May, Iran has felt the economic realities of the hard line from President Trump.
Although the JCPOA was meant to be an economic boost for the Iranian people, the high levels of corruption have limited the positive economic impact. Now with sanctions being renewed, the regime is facing a rial that is losing value, high unemployment, and rising inflation.
“When I came into here, it was a question of when would they take over the Middle East,” said President Trump during a briefing on Thursday. “Now it’s a question of will they survive. It’s a big difference in one and a half years.”
The goal of the Trump administration is to reduce the Iranian oil revenue to zero. With that end in mind, it is not allowing waivers for allies to purchase Iranian oil and many countries have already significantly reduced their Iranian imports to avoid tangling with the U.S.