“Come! We are waiting. You start this war, but we will finish it.”
Major-General Soleimani — Head of the elite Quds Force
“Iran will continue selling oil. We will proudly break the sanctions.”
Iran President Hassan Rouhani
The leader of Iran’s elite Quds Force, General Qassem Soleimani, has responded to US President Donald Trump’s announcement that “Sanctions Are Coming’ with a Game of Thrones inspired meme of his own. But make no mistake. This is no child’s play. Follow us on Twitter: @INTEL_TODAY
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UPDATE (November 5 2018) — Although the US sanctions aim to reduce Iranian oil sales to zero, the Trump administration has indeed granted exemptions to eight countries to continue importing Iranian oil.
The countries have now been named, confirming my initial guess. Italy, Greece, Japan, South Korea, and Taiwan along with Turkey, China and India are among the countries allowed to buy Iranian oil.
Trump himself revealed the logic behind the waivers. “We have the toughest sanctions ever imposed but on oil we want to go a little bit slower because I don’t want to drive the oil prices in the world.”
Together, these countries buy more than about 90% of Iranian exported oil. France and the UAE are not on the list. But even if France is not exempted, French companies will be able to buy Iranian oil through the “Special Purpose Vehicle” that will enable European and Iranian companies to avoid the US financial system.
Combined, these exemptions will allow Iran to continue to export oil, and it might even be able to increase exports from current levels. Iran exported somewhere around 1.6-1.7 million barrels per day in October, and according to S&P Global Platts, might export around 1.1 mb/d in November.
But the losses could potentially stop there, and exports might even rise if some countries (South Korea and Japan) resume purchases while others (China and India) increase their imports from Iran. Very little is known about these waivers which expire in May 2019.
“No one’s going to argue that Secretary Pompeo isn’t tough on Iran,” Secretary of State Mike Pompeo said on “Fox News Sunday.” Pompeo goes on to describe his approach as “laser focussed”.
On November 2 2018, Pompeo said that the US sanctions are “just a part of the U.S. Government’s total effort to change the behavior of the Ayatollah Khomeini, who died in 1989.
The sanctions by the U.S. Treasury Department target, among other things, the oil tanker Sanchi that sank in January 2018 after a week of burning off the coast of China, killing all 32 crew on board.The list also includes Tat Bank, which was dissolved in 2012.
Very impressive “laser focussed” strategy!
A decline in oil prices accelerated Tuesday (November 6 2018), with US crude dropping to an eight-month low as the market re-evaluated the impact of Washington’s sanctions on Iran. Brent crude, the international benchmark, dipped 2.2 per cent to $71.59 per barrel. West Texas Intermediate fell 2.2 per cent to $61.70 per barrel.
END of UPDATE
On November 2 2018, President Trump tweeted an image of himself with the message — Sanctions Are Coming — borrowed from the HBO fantasy show — Game of Thrones — based on George R.R. Martin’s unfinished book series.
Trump appears to see himself as the King of Dragons, tweeting an image of himself inspired by Game of Thrones.
In the tweet, a photo of the US President is accompanied by the words “Sanctions Are Coming” with the date November 5 underneath.
The tweet is a nod to wildly popular HBO series, with the words displayed in a font that’s very similar to the show’s title.
It also appears to mimic one of the show’s most recognisable phrases: “Winter is Coming”.
Major-General Soleimani, head of the elite Quds Force, quickly replied on Instagram.
“Come! We are waiting,” Major-General Soleimani wrote in Farsi on Friday, under the image depicting him as a White Walker from the hit HBO show.
“I am your enemy. Quds Force is your enemy,” added Soleimani.
“You start this war, but we will finish it.”
The Joint Comprehensive Plan of Action
Trump has withdrawn the US from the 2015 Joint Comprehensive Plan of Action (JCPOA) –known commonly nuclear deal — with Iran negotiated by the Obama administration, arguing it was a terrible deal that did nothing about Tehran’s “malign activity” in the Middle East, ballistic missile development, and threats to Israel.
The US has re-imposed most of the sanctions on Iran that had been suspended under the deal, with the last batch scheduled to go into effect November 5 2018.
Uncertainty comes from the European Union’s efforts to bolster the Iran nuclear agreement by seeking to protect its own companies from US sanctions.
There is also talk about establishing an alternative payments system that would not involve either the dollar or US banks.
But experts in Washington – even those critical of the Trump administration’s approach – remain highly sceptical that EU efforts, in the short-term, will make much economic difference. [BBC]
So is the JCPOA now doomed? Not necessarily.
The two major regions importing Iranian oil are Asia-Pacific and Europe, which together received some 2.1 million barrels per day (bpd) in 2017, according to OPEC data.
Roughly speaking, 1.5 million bpd go to Asia-Pacific countries (China, India, South Korea and Japan) while the rest is exported to European countries (Turkey, Italy, France, Britain, Hungary and the Netherlands).
China and India are likely continue to buy a reasonable level of Iranian oil. Moreover, behind the scene, Trump appears to be willing to make exceptions for allied countries to ensure that they are not being hurt by the sanctions. This list will certainly include South Korea, Japan and probably Turkey.
European countries will be able to buy Iranian oil through the “Special Purpose Vehicle” that will enable European and Iranian companies to avoid the US financial system.
Therefore some experts believe that Iran may possibly stick with the JCPOA for the time being. But most agree that, in the long-term, the future appears gloomy.
“However, once sanctions begin to bite – perhaps causing further economic unrest – then the fate of the Joint Comprehensive Plan of Action will depend upon the complex political battles between moderates and hardliners in Tehran.”
Here we go again. A few images flash quickly in my mind: Iran-Contra scandal, Black Monday, IR 655 and Lockerbie… As T.S. Eliot wrote:
“We do not know very much of the future
Except that from generation to generation
The same things happen again and again.
Men learn little from others’ experience.”
Trump re-imposes Iran sanctions: Now what? — BBC News
General Qassem Soleimani : “I Will Stand Against You”
General Qassem Soleimani : “I Will Stand Against You” [UPDATE]