Secretary of State Hillary Clinton announced today that the United States was granting exemptions to Japan and several European countries from sanctions that are intended to prevent the sale of Iranian oil. However, Clinton represented the waivers as part of the administration’s effort to tighten the vise on Iran. This makes some sense, at least as far as Europe is concerned. The European Union has already forbidden its member nations from signing new oil contracts with Iran and has pledged itself to ending existing obligations by July 1. As for Japan, Clinton said the exemption was a reward for their efforts toward reducing their dependence on Iranian oil.
If these exemptions really part of an integrated strategy aimed at tightening the noose around Iran’s economy then it is fair to say that President Obama is keeping his word to implement the sanctions Congress passed last year over his objections. However, it is worth noting that the administration has history of non-enforcement of sanctions on Iran as well as the possibility that such waivers will be used as a way to prolong negotiations with Iran over its nuclear program. There is also the likelihood that the exemptions have more to do with a desire to stabilize oil prices than a campaign to force the ayatollahs to renounce their nuclear plans.
Assuming that Clinton means what she says about sticking to a tough policy on Iran, the exemptions are a way to gradually achieve an oil embargo of Iran without causing a major disruption of oil markets that would harm America’s allies. And while avoiding a spike in oil prices is an imperative for the president’s re-election campaign, it is also desirable to avoid any actions that would create windfall profits for Iran.
That said, as the New York Times notes, the real test of the administration’s intentions is whether it is prepared to apply the law to China and India, the nations that are the primary consumers of Iranian oil. China has already committed itself to buying more Iranian oil in the future.
The danger here is not only that Iran doesn’t believe that President Obama has the guts to risk raising oil prices in an election year and thus will continue to defy international efforts to get it to back down. Though the waivers allow the administration some flexibility in implementation of the sanctions, the fear is that when push comes to shove, the president will lack the nerve to punish nations that still prefer to do business with Tehran. The waivers may also encourage the Iranians to use the promise of negotiations to string the West along without them ever having to give up their nukes. As with everything else about the administration’s Iran policy, the key issue here is trust. The Treasury Department has already issued thousands of exemptions to American companies who want to do business with Iran in violation of the law. So long as Obama and Clinton can keep talking tough, they may assume that the public will be unaware of the fact that the crippling sanctions Congress imposed on them are full of holes.
Given Washington’s ardent desire to prevent Israel from taking action against the existential nuclear threat from Iran on its own, the administration will have every incentive to keep granting exemptions while continuing to indulge in bellicose rhetoric aimed at Iran but really intended for the ears of American voters. An American government that is more committed to maintaining a window for dubious diplomacy with Iran than actually forcing Tehran to give up its nuclear ambitions may well use the exemptions to avoid a confrontation rather than to achieve their intended purpose.