The Trump administration’s return to “maximum pressure” sanctions on Iran kicked off earlier this month, and nations across the globe can expect to feel the shockwaves of his crackdown on third-party oil dealers.
Iran currently exports an average of 1.5 million barrels of oil per day, but under Trump’s February 6th executive order, the Secretaries of State and Treasury are to work to “implement a campaign aimed at driving Iran’s oil exports to zero.”
The order calls on the Treasury Department to reverse any loosening of sanctions and rescind any waivers offered by the Biden administration.
But it also directs the Treasury Department to re-evaluate “beneficial ownership thresholds.” Currently, companies where the IRGC could have a 50% stake of ownership are squeezed by sanctions, but the order allows Treasury to lower that threshold to include companies that the Iranian regime has any ownership of at all.
The U.S. has significant leverage over Iraq – $100 billion of its reserves are held in the U.S., and it could wield that leverage amidst Iran’s increasingly firm grip over Iraqi leadership.
And last week, Iraq banned five banks from conducting U.S. dollar transactions as a way to crack down on Iran getting its hands on U.S. currency. Iraq is a lifeline for Iran’s access to hard currency, and the U.S. has long sought to restrict Tehran’s bypassing of sanctions through its neighbor.
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