“This week, U.S. Secretary of State Mike Pompeo moved to end sanctions waivers on Iranian oil—a major step to increase financial pressure on Tehran. The new policy, once it goes into force on May 2, aims to force China, India, Japan, South Korea, and Turkey to stop buying crude from Iran, depriving the country of its primary source of cash.
“In the near term, the pressure tactic will mostly work, successfully siphoning off a significant share of Iran’s oil exports. The big buyers in the handful of countries still doing oil business with Iran will plead for leniency, or kick and scream, and then grudgingly wind down. They are unlikely to get to zero, for lack of affordable and available alternatives, possible permission from the United States to slow-walk their retreat, and good old-fashioned recalcitrance. But they will likely steer away from committing reputational and financial suicide by flagrantly breaching U.S. sanctions…”
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