Specifically, on Thursday Donald Trump announced that any country or individual purchasing oil or petrochemical products from Iran will be subject to immediate secondary sanctions. Such a move would effectively prohibit them from doing business with the United States. This announcement furthers his big-picture strategy. He wants to cripple Iran’s economy and lessen its influence in the Middle East.
Ever since taking office, Trump has pursued his own version of a “maximum pressure” campaign against Iran. His stated goal is to zero out the Islamic Republic’s oil exports. The U.S. President went on to blame Iran for using its oil profits to support terrorist organizations throughout the Middle East.
In his announcement, wired for presentation, Trump stressed the gravity of his sanctions, saying,
“Any country or person who buys ANY AMOUNT of OIL or PETROCHEMICALS from Iran will be subject to, immediately, Secondary Sanctions.”
He further reiterated the implications of these sanctions with a stark warning:
“They will not be allowed to do business with the United States of America in any way, shape, or form.”
The announcement sent shockwaves through oil markets right away. U.S. crude oil futures were up $1.11, or 1.91%, to $59.32 per barrel. Up was the global benchmark Brent, which rose $1.15, or 1.88%, to $62.21 per barrel in the wake of Trump’s comments.
The declaration comes at a time when the Trump administration is negotiating with Iran over its nuclear program. In many ways, the U.S. has gone the opposite direction. They hope to use continued economic pressure to address worries over Tehran’s nuclear ambitions and its backing of regional proxies.
The Iranian national flag flies over the Persian Gulf Star Co. gas condensate refinery in Bandar Abbas. Yet it epitomizes the country’s unyielding drive to continue oil production amid adverse impacts brought on by the U.S. sanctions. The Trump Administration’s maximum pressure campaign has devastated Iran’s economy, which relies on oil exports for 95% of its income.