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U.S. reimposes Iran sanctions, Tehran decries 'bullying'

Reuters  |  WASHINGTON/DUBAI 

By Lesley and Hafezi

WASHINGTON/DUBAI (Reuters) - The on Monday restored sanctions targeting Iran's oil, and and threatened more action to stop its "outlaw" policies, steps the Islamic Republic called economic warfare and vowed to defy.

The measures are part of a wider effort by U.S. to curb Tehran's missile and nuclear programs and diminish the Islamic Republic's influence in the Middle East, notably its support for proxies in Syria, and

Trump's moves target Iran's main source of revenue - its exports - as well as its financial sector, essentially making 50 Iranian banks and their subsidiaries off limits to foreign banks on pain of losing access to the U.S. financial system.

The return of the sanctions was triggered by Trump's May 8 decision to abandon the 2015 nuclear deal, negotiated with five other world powers during Democratic Barack Obama's administration. That agreement had removed many U.S. and other economic sanctions from in return for Tehran's commitment to curtail its nuclear program.

Trump denounced the deal because of time limits on some of Iran's nuclear activities, as well as for its failure to address other Iranian activity that the does not like.

In abandoning the agreement and imposing sanctions that it had lifted as well as adding new ones, the is betting the economic pressure will force to change its behaviour and agree to a new, much more restrictive deal.

"The Iranian regime has a choice: it can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble," U.S. told reporters.

"We hope a new agreement with Iran is possible."

Speaking before Pompeo detailed the U.S. sanctions, Iranian accused the United States of targeting ordinary Iranians and said the Islamic Republic would find a way to "continue to sell our ... to break sanctions."

"The enemy is targeting our economy ... the main target of sanctions is our people," he said. "This is an economic war against Iran."

"BULLYING"

Some analysts are skeptical Iran will knuckle under to U.S. pressure, at least in the short term.

"The increasing pressures on Iran will not change the behaviour of the regime any time soon," said Dennis Ross, a former U.S. now at the Institute for Near East Policy.

Iranian said U.S. "bullying" was backfiring by making more isolated, a reference to other world powers opposed to the initiative. The other parties to the 2015 nuclear deal, Britain, China, France, and Russia, have said they will stay in it.

The sanctions are designed, in part, to force Iran's main customers to stop buying its However, the United States gave temporary exceptions to eight importers - China, India, Greece, Italy, Taiwan, Japan, and - allowing them to keep buying from Iran.

has also been given an exemption, Brian Hook, the for Iran, told reporters in a conference call, saying was working "on reducing Iran's influence and opening Kirkuk, which would be another 200,000 barrels of oil."

In June Iran said that and had begun exchanging

Crude from the Kirkuk field in is being shipped by truck to Iran. will use the oil in its refineries and will deliver the same amount of oil to Iraq's southern ports, on the Gulf.

The sanctions also cover 50 Iranian banks and subsidiaries, more than 200 persons and vessels in its shipping sector, Tehran's national airline, Iran Air, and more than 65 of its aircraft, a statement said.

The administration said it had toughened the sanctions by roughly 300 new designations on individuals and entities, and targeted more subsidiaries of Iranian companies than before.

EUROPEAN OPPOSITION

European powers that continue to back the nuclear deal said they opposed the reapplication of sanctions and major said it regretted the move.

said it was holding talks with the United States and Iran about launching a humanitarian payment channel to help and drugs keep flowing to

U.S. sanctions permit trade in humanitarian goods such as and but measures imposed on banks and trade restrictions could make such items more expensive as well as more difficult to pay for.

The United States will allow non-proliferation civil nuclear work at Arak, Bushehr and Fordow in Iran "under the strictest scrutiny," the State Department said on Monday.

The Belgium-based SWIFT financial messaging service said it is suspending some unspecified Iranian banks' access to its messaging system in the interests of the stability and integrity of the global financial system.

The of Iran's Central Bank, Abdolnassr Hemmati, said the country has taken necessary measures to continue trade after the U.S. move, Iranian state TV said.

The European Union, France, and Britain said they regretted the U.S. decision and would seek to protect European companies doing legitimate business with Tehran.

Diplomats told last month that a new EU mechanism to facilitate payments for Iranian should be legally in place by Nov. 4 but not operational until early next year.

Trump told reporters he wanted to impose the slowly so as not to "cause a shock to the market."

were mixed on Monday after a steep five-day fall. Brent crude LCOc1 futures rose 34 cents to settle at $73.17 a barrel. U.S. Intermediate (WTI) crude CLc1 futures fell 4 cents to settle at $63.10 a barrel.

Prices rallied to near four-year highs in early October on expectations the imposition of sanctions would create a global supply shortage. However, of the waivers last week sent prices lower as top buyers would continue to import Iranian oil.

Graphics

Iran's nuclear programme https://tmsnrt.rs/2D0wdT3

Iran's crude exports 1975-2018 https://tmsnrt.rs/2CUMBnT

Iran's crude exports, production https://tmsnrt.rs/2CRTM0h

(Writing by William Maclean and Arshad Mohammed; Editing by Jon Boyle, and Bill Trott)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, November 06 2018. 03:21 IST
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