Two days after the signing of an executive order by President Trump, the US Department of the Treasury announced the imposition of new sanctions targeting Iran’s energy, shipping, and oil sectors. The Office of Foreign Assets Control (OFAC) issued a statement asserting that these embargoes were enacted against an international network to facilitate the shipment of millions of barrels of Iranian crude oil, valued at hundreds of millions of dollars, to China. This oil was purportedly dispatched on behalf of Iran’s General Staff of the Armed Forces and its sanctioned entity.
It is essential to note that these restrictions encompass a range of institutions and individuals across various countries, including China, India, and the UAE, as well as several maritime vessels. This announcement coincided with President Trump’s endorsement of an executive order renewing the maximum pressure campaign against Iran, in which he articulated his administration’s intent to prevent Tehran from reaching the nuclear breakout threshold.
Simultaneously, President Trump, in a statement on his social media platform, Truth Social, expressed his desire for Iran to become a prosperous nation free from nuclear weapons. In a formal response, Iranian officials reiterated their firm stance against capitulation, emphasizing that their official policy of refraining from crossing the nuclear threshold remains intact.
Iran and its Response
Abbas Araghchi, the Iranian Foreign Minister, responded to these claims by asserting that achieving a non-nuclear Iran is attainable and not a difficult task if that is the sole objective of the United States. Concurrently, Mohammad Eslami, the head of the Atomic Energy Organization, reiterated Iran’s commitment to not pursuing nuclear weapons and affirmed ongoing communication with international safeguard authorities.
The Snapback Mechanism’s Implications
In the context of ongoing international tensions, Al Jazeera reported that in response to years of Israel’s subversive activities within Iran’s nuclear facilities and numerous resolutions endorsed by the International Atomic Energy Agency’s Board of Governors with Western support, Tehran has escalated its uranium enrichment to 60%. This development brings Iran just one technical step away from reaching weapons-grade enrichment levels, surpassing 90%. Additionally, global nuclear watchdogs and Western intelligence agencies assert that Iran possesses sufficient fissile material to cross the nuclear breakout threshold, although it has yet to modify its nuclear doctrine.
These assertions coincided with a recent second round of diplomatic talks between Iranian representatives and European countries to reach a mutual understanding on nuclear and other pertinent issues. Both parties expressed intentions to commence a new phase of negotiations shortly. According to Al Jazeera, while the extensive sanctions imposed during Trump’s first term did not yield the desired outcomes for the then-US administration, they notably impacted the Iranian economy, maintaining their stringency throughout the COVID-19 pandemic. During this period, European nations could not advance a new mechanism regarding Iran without US involvement, leading to the stagnation of the INSTEX mechanism.
Following Biden’s victory in the 2020 elections, he increased these sanctions but faced continuous criticism from his Republican counterparts for perceived leniency in their enforcement, purportedly due to his engagement in indirect discussions to resurrect the JCPOA. Al Jazeera highlights that with the return of US President Donald Trump to the White House, the “sunset clause,” a pivotal element of the agreement, is set to expire in October 2025. Should Tehran and the European trio fail to secure an accord within the remaining timeframe, the European Union, under US influence, may reimplement UN sanctions by activating the snapback mechanism.
Notably, the Islamic Republic’s economy experienced relative stabilization following the easing of sanctions consequent to the nuclear agreement. Yet, it has grappled with crises for several years due to the reinstated sanctions.
Simultaneously, Foreign Policy magazine suggests that Trump is reintroducing the maximum-pressure policy against Iran, a strategy that failed to exert the anticipated pressure on Tehran during his first term. Trump’s administration is believed to aim now to curtail the financial resources pf Iran further through rigorous enforcement of US sanctions and the introduction of new measures.
This assertive US stance is likely intended to disrupt Iran’s sanction evasion tactics. Al Jazeera further contends that Washington may concurrently escalate pressure on China, given its longstanding role as Iran’s primary oil purchaser. Indications suggest Trump is prepared to initiate another trade conflict with Beijing.
Trump’s Strategy and China’s Response
Iran possesses one of the largest oil reserves globally and is a founding member of the Organization of the Petroleum Exporting Countries (OPEC), which includes some of the world’s largest oil producers. Thus, President Trump’s efforts to reduce Iran’s oil exports to zero will be both challenging and time-consuming due to his aggressive stance towards China. Consequently, it is unlikely that the US President will be able to implement his threats effectively unless he reaches an agreement with Beijing regarding the ongoing tariff disputes and other issues.
Foreign Policy highlights several complications with Trump’s reliance on this strategy. Currently, Iran exports approximately 1.7 million barrels of oil per day, with over 90% of its oil being directed to China. Trump’s recent executive order to exert maximum pressure on Iran aims to impact Tehran’s oil exports, which continue through various channels. However, the executive order does not indicate serious pressure, nor does it introduce diverse restrictions. Gregory Brew, senior analyst at the Eurasia Group, emphasized that unless new and innovative sanctions are aimed at limiting oil exports to China, they carry little weight and will not yield results.
Nevertheless, the Trump administration has multiple instruments to affect the ability of Iran to generate revenue from oil sales, support Tehran’s resistance groups, and influence the construction and maintenance of centrifuges for uranium enrichment beyond the nuclear breakout threshold. Preventing Tehran’s nuclear program advancement and regional influence is among Trump’s key priorities.
According to Foreign Policy, hundreds of tankers, approximately 250 or more, act as a shadow fleet for Iran, ready to circumvent US sanctions. Recently, Iranian oil has been transferred from larger vessels to smaller ones, managed by advanced radar systems.
Al Jazeera reports that the current situation underscores a more significant issue when discussing sanctions on Iran: China. Beijing’s financially pressured independent refineries remain the primary buyers of Iranian crude oil. Thus, the trade war with China, in addition to the conflict initiated five years ago and the tariffs imposed on Chinese exports last weekend, presents a significant challenge for the new US administration. The critical question for observers is how to address enemy number three without provoking enemy number one. It could be described as a classic game of cat and mouse, where sanctions are the primary strategy, despite sounding like a worn-out cliché.
In conclusion, President Trump’s strategy of imposing new sanctions on Iran’s energy, shipping, and oil sectors while renewing the maximum pressure campaign is fraught with complexities and challenges. The involvement of China, a major purchaser of Iranian oil, further complicates the situation, making it unlikely that Trump’s threats will be fully implemented without significant concessions from Beijing. Although the Trump administration aims to disrupt Iran’s financial resources and ambitions regarding nuclear deals, the efficacy of these measures remains uncertain. Moreover, the assertive US stance risks escalating tensions with China, potentially leading to another trade conflict. Ultimately, the intricate dynamics between the US, the Islamic Republic of Iran, and the People’s Republic of China underscore the difficulties in achieving long-term stability and non-proliferation in the region.
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Bahram P. Kalviri is a PhD candidate in political science at the University of Hyderabad, Hyderabad, India. His research interests focus on the Middle East, particularly the interplay of international relations and public diplomacy within the region.