After initially promising to drive the country to zero exports of oil, the USA has offered a waiver to eight buyers of Iranian crude, a move that Secretary of State Mike Pompeo defended yesterday.
USA sanctions against importers of Iranian oil threaten the crude oil market's precarious balance and risk surging prices, all under Saudi Arabia's watchful gaze, according to experts. However, the reality is that the United States will not be able to reduce the sales of Iranian oil to zero, since India, China, Japan and a number of European countries made it clear that they are not going to stop buying oil from Iran.
European countries which are still party to the accord created to curb Iran's nuclear activity say they will help businesses bypass the sanctions.
For example, the USA does not want to have India and South Korea move geopolitically closer to China, Russia and other competitors and away from its influence. "[Iran] wanted to take over the whole Middle East". Some even showed a smiling silhouette logo of Kentucky Fried Chicken's founder Colonel Harland David Sanders crossed-out, equating the chain once in Iran before the Islamic Revolution to decadent Americanism.
Iranian President Hassan Rohani responded early on November 5 by saying in a speech on state TV that Iran is facing a "war situation".
Pompeo emphasized how increased USA sanctions on Iran leading up to today's announcement had ensured "that Iran is not able to increase its revenue from oil as its exports plummet", while keeping prices stable for the American consumer.
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Global benchmark Brent crude had fallen about 15 per cent from over $85 a barrel in October on speculation that some nations would get waivers, as well as signs that other Opec members would pump more to offset any supply gap.
They have promised to support European firms that do "legitimate business" with Iran and have set up an alternative payment mechanism - or Special Purpose Vehicle (SPV) - that will help companies trade without facing United States penalties.
The US wishes to weaken Iran and cause the Iranian nation to lose hope, but it will not succeed in doing either, said Rouhani, stressing that Iran will continue to grow and flourish through unity. "But they're not doing very well", he said, referring to the economic setbacks the country has already faced because of an earlier round of USA sanctions.
The US stance has already inflicted serious pain on Iranians, with the country's currency, the rial, losing more than two thirds of its value since May.
Senior Iranian officials have dismissed concerns about the impact to its economy.
"[Ms]. Mogherini and the European ministers once again reiterated their commitment to the 2015 Iran nuclear deal and emphasized the efforts to maintain financial channels with Tehran and the continuation of Iran's oil and gas exports", according to reports by Iranian state-run news outlet IRNA.
Pompeo and Treasury Secretary Steven Mnuchin were expected to provide more details on the sanctions at a briefing Monday.
While in a dramatic escalation of rhetoric, the Iranian President said the country now faces a "war situation".
The seizure of the United States embassy by radical students was a key stage in the Islamic revolution of 1979, leading to a 444-day hostage crisis that permanently damaged relations between Washington and Tehran.