Still, key Western officials gathered in Washington on Monday for the spring meetings of the International Monetary Fund and the World Bank, where U.S. officials and their European allies are discussing possible economic responses to Iran. Iran is already one of the most heavily sanctioned countries in the world, and their options are limited as U.S. sanctions apply to the country's banking, manufacturing and energy sectors.
One of the most obvious options left is to aggressively expand sanctions on Chinese companies that buy large quantities of Iranian crude exports, which are a financial lifeline for Tehran, which remains cut off from the West. It is. The United States has imposed sanctions on some commercial links in oil trade between China and Iran over the past year, but experts say the administration could go further and impose sanctions on more Chinese refineries and banks. It is pointed out that there is a sex.
However, this comes with risks. Treasury Secretary Janet L. Yellen and other administration officials have sought to stabilize relations with China in recent months, and any sudden hit to energy production could enrage Beijing. Furthermore, the suspension of sales of Iranian crude oil could cause global oil prices to soar amid tight supplies, potentially leading to higher gasoline prices in the run-up to the 2024 presidential election.
“With so much of Iran already under sanctions, there aren't a lot of options to turn things around,” said Rachel Ziemba, a nonresident senior fellow at the Center for a New American Security, a foreign policy think tank. “But if you really want to reduce Iran's oil revenues, you have to go through China and Chinese institutions.”
Sanctioning Chinese banks for facilitating purchases of Iranian oil could drain up to 1.5 million barrels a day from global markets. Bob McNally, president of consultancy Rapidan Energy Group, said that would push oil prices above $100 a barrel, creating a political nightmare for the Biden administration.
“The last thing Biden wants is high gas prices, so he wants Iran to sell oil to China. He doesn't want oil locked up. It's that simple. We can't afford to sanction Iranian oil,” McNally said. “They might do some symbolic things, like go after small traders here and there, but that's probably about it.”
Biden called for calm in the wake of the Iranian attack. The US has made clear it will not participate in any Israeli military attack on Iran, with senior officials stressing the US objective is to “de-escalate tensions in the region” to prevent widespread firefights. . Israel's war cabinet met on Monday to discuss possible responses.
Although Western countries have ruled out participating in a military response, an economic response to Iran's actions seems increasingly certain. European Commission President Ursula von der Leyen said officials in Brussels would discuss tightening sanctions against Iran. “We will work closely with our partners to consider additional sanctions against Iran,” the prime minister said in a statement.
For example, U.S. officials are discussing strengthening Iran's access to frozen funds earmarked for humanitarian relief, according to two people familiar with the matter who asked not to be identified discussing private conversations. They also discussed imposing additional sanctions on Iranian officials and companies. The first may be primarily symbolic. Iran already has little access to these funds. It is also unclear how much impact sanctions will have on other companies, such as international suppliers of parts for Iranian drones.
A Treasury Department spokeswoman declined to comment on the ongoing deliberations, but Yellen is scheduled to address the media on Tuesday.
The Biden administration is also facing pressure to act from on Capitol Hill. The House of Representatives overwhelmingly passed a bill on Monday aimed at cracking down on Iranian oil sales to China. Critics say Mr. Biden should have taken further steps to ensure Iran made billions of dollars from oil exports.
“Following Iran's large-scale and disproportionate attack on Israel, all non-military measures must be on the table in anticipation of escalation. This includes targeting Iran's continued oil sales. “That includes doing things,” said Matthew Levitt, director of the Janet Eli Reinhardt Program on Counterterrorism and Intelligence at the Washington Institute for Near East Policy, a Washington, D.C.-based think tank.
Still, other experts say the problem is that the U.S. government is already too aggressive in its stance toward Tehran. Since the Trump administration abandoned the nuclear deal agreed to by President Barack Obama, Iran has been under severe economic restrictions, leaving policymakers with little room to act in the face of new emergencies.
“We are under maximum pressure [on Iran] It's been basically since November 2018, and there's not much more that can be done,” said Tom, founder and CEO of the Stock Exchange & Bazaar Foundation, a think tank focused on international affairs and economic diplomacy. said one Esfanyar Batmangherizi. “This is really a maximum pressure issue. What you thought was an Iran policy issue suddenly finds itself in a position where it's not just an Iran policy issue.”