News / Middle East

Analysts Warn of Downside to Sanctions on Iran Oil Exports

An oil pump works at sunset in the desert oil fields of Sakhir, Bahrain, in the Persian Gulf. Iran test-fired a surface-to-surface cruise missile Monday in a drill its navy chief said proved Tehran was in complete control of the strategic Strait of Hormuz
An oil pump works at sunset in the desert oil fields of Sakhir, Bahrain, in the Persian Gulf. Iran test-fired a surface-to-surface cruise missile Monday in a drill its navy chief said proved Tehran was in complete control of the strategic Strait of Hormuz

Analysts say a possible European Union embargo on Iranian oil may do little to get Tehran to cooperate on its nuclear program, and could possibly contribute to a potentially dangerous standoff with the Middle Eastern nation. 

Diplomats suggest the European Union will likely agree on an embargo on Iranian oil exports within weeks - a move supported by members such as France.

Speaking during a visit to Turkey late Wednesday, French Foreign Minister Alain Juppe said Paris hopes the oil sanctions will be signed-off by European foreign ministers by the end of January.  He believes solutions will be found for EU countries like Greece and Italy that depend heavily on Iranian oil.

The possible sanctions underscore a toughening approach by the West to get Iran to cooperate on its nuclear program. Western nations believe Iran is trying to build a nuclear bomb, while Tehran insists its activities are for peaceful purposes.

But will an oil embargo work? Not as far as oil analyst Paul Stevens of London-based Chatham House is concerned. "If you look at history, oil embargoes have never, ever worked and never, ever been effective…so it's not going to work," he said. "It's just going to cause a great deal of disruption."

Stevens says EU countries that depend on Iranian oil can find new suppliers - like the Gulf states. But Iran may also find new buyers for its oil in Asia.

Iranian officials have downplayed the impact of Western measures - including new U.S. sanctions that could reduce Iran's ability to sell oil and other exports.  But Tehran also has threatened to close the critically important Strait of Hormuz, the entrance to the Persian Gulf.

Leo Drollas, director and chief economist at the London-based Center for Global Energy Studies, believes closing the strait could affect about 16 percent of global crude oil shipments. "The fallout would obviously hit the prices straight away in the future markets," Drollas stated. "Oil prices would rocket because of the fears of what might happen."

But Drollas believes the spike would be temporary as the countries adjust and the West taps into its reserves.

For his part, Stevens of Chatham House doubts Iran will go through with its threat to close the Strait of Hormuz - in part because it relies on the waterway for its own oil exports. But he believes the deepening standoff between Tehran and Washington, in particular, is creating a dangerously unstable situation. "By trying to limit Iran's oil exports, it [Washington] is essentially escalating the situation into what could very rapidly become a crisis," Stevens noted.

More effective, Stevens and other analysts say, are tougher financial sanctions.  Sanctions already in place have already taken a toll on Iran. The EU is considering sanctions against Iran's central bank, but member nations are reportedly still divided on the measure.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video VOA EXCLUSIVE: US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs countermeasure at UN More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Family of American Marine Calls for Release From Iranian Prisoni
X
Heather Murdock
July 01, 2015 8:59 PM
As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs