U.S. Senate approves tougher Iran sanctions (REUTERS) By Roberta Rampton and Susan Cornwell WASHINGTON 05/22/12 4:39am EDT)
Reuters News Service
Reuters News Service Articles-Index-Top
(Reuters) - The U.S. Senate unanimously approved on Monday a package
of new economic sanctions on Iran´s oil sector just days ahead of a
meeting in Baghdad between major world powers and Tehran.
The sanctions add to a raft of punitive measures by the United States
and the European Union aimed at shrinking Iran´s oil revenues to
force it to halt a nuclear program the West suspects is being used to
build an atomic bomb.
Iran has said its nuclear program is for civilian purposes.
The new package would extend sanctions to cover dealings with the
National Iranian Oil Co and National Iranian Tanker Co, if they are
deemed to be an agent or affiliate of the Revolutionary Guards. It
aims to close a potential loophole that could have allowed Tehran to
continue selling some of its oil using its own fleet.
The House of Representatives passed its version of the bill in
December and now the Senate and House must work out their differences
in the legislation before it is signed into law by President Barack
"This bill is another tool that will demonstrate to Iran that the
United States is not backing down," Robert Menendez, the Democratic
senator who helped craft the legislation, said on the Senate floor.
"Today, the U.S. Senate put Iranian leaders on notice that they must
halt all uranium enrichment activities or face another round of
economic sanctions from the United States," said Republican Senator
Mark Kirk, a co-author of the bill, in a statement. The Senate bill
was brought up on Thursday but was blocked by Republicans who wanted
some parts toughened up.
BUILD ON BANKING SANCTIONS
Iran, OPEC´s second-largest producer, exports most of its 2.2 million
barrels of oil per day to Asia, home to its four main customers:
China, Japan, India and South Korea.
All four nations have cut back on their purchases, dissuaded by the
previous package of U.S. financial sanctions that due to take effect
at the end of June as well as an EU oil embargo and a ban on shipping
insurance, which take effect on July 1.
The U.S. sanctions threaten to shut out importers of Iranian oil from
the U.S. financial system unless they make substantial, sustained
cuts to their purchases. Washington has already granted 10 EU nations
and Japan a waiver from these measures and is pressuring Iran´s main
buyers China and India to comply.
In addition to totally banning Iranian oil imports, the EU measures
prohibit European insurers from covering Iranian oil exports anywhere
in the world, which would leave importers exposed to personal injury
and pollution claims. Typically, a supertanker insures against these
liabilities to the tune of $1 billion per shipment.
Almost 90 percent of the world´s tanker insurance is based in Europe.
South Korea will effectively become the first of Iran´s major Asian
customers to halt purchases from July due to the ban.
The cumulative impact of the U.S. sanctions will be severe, said
Suzanne Maloney, a senior fellow at the Brookings Institution´s Saban
Center for Middle East Policy.
"Right now, both sides are playing a game of chicken - the Iranians
want to see how much they can get and how little they can give,
whereas Washington and its allies are counting on the looming threat
of impending sanctions to elicit more concessions on the part of
Tehran," Maloney said.
The escalating Western sanctions, and threats by Israel and the
United States of last-ditch military action, have helped to push up
world oil prices, compounding the economic misery wrought by debt
crises in many industrialized countries.
The U.N. nuclear watchdog chief held talks in Tehran on Monday ahead
of a meeting between major powers and Iranian officials this week,
but there was no immediate sign of a breakthrough.
During the meeting in Baghdad, the United States, Britain, France,
Russia, China and Germany will try and make Iran stop the higher-
grade uranium enrichment it started two years ago and has since
Paul Pillar, a former CIA analyst for the Near East and Persian Gulf
region, said any new sanctions could be counterproductive ahead of
the talks as Iran may think the West is less interested in a deal
than in undermining the regime.
"The biggest requirement now for getting an agreement is not to pile
on still more sanctions, but instead to persuade the Iranians that if
they make concessions the sanctions will be eased," said Pillar, now
a security studies professor at Georgetown University.
(Additional reporting by Timothy Gardner and Thomas Ferraro; Editing
by Miral Fahmy and Neil Fullick) (© Thomson Reuters 2012. 05/22/12)
Return to Top
MATERIAL REPRODUCED FOR EDUCATIONAL PURPOSES ONLY