US, EU prepare for deep economic sanctions against Iran

Lorenzo Bagnato

17 April 2024 - 13:00

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The United States, the European Union, and the UK prepare for renewed sanctions at Iran, aiming at its oil exports.

US, EU prepare for deep economic sanctions against Iran

The United States, the European Union, and the United Kingdom may hit Iran with a fresh wave of economic sanctions, several Western outlets reported. Iran is already submerged in “the most extensive and comprehensive set of sanctions that the United States maintains on any country,” the Congressional Research Service reported.

Last Saturday, Iran launched an unprecedented strike aimed directly at Israel. Hundreds of battle drones left Iranian territory only to reach the Israeli airspace a few hours later. Israeli officials reported that 99% of the drones had been intercepted and destroyed, leaving nobody killed or wounded.

The strike came as retaliation for Israel’s own strike on the Iranian embassy in Damascus. This attack left 16 people killed and is widely considered a violation of international law.

Following Saturday’s strike, the Iranian government said it deems the matter closed, and no other form of retaliation will follow. That is unless Israel itself responds to the provocation in force. The United States and most Western governments already said they would not support an Israeli attack on Iran.

Support for Israel could, however, come in the form of economic sanctions against the Islamic theocracy. This would also be a way of dissuading Israel from launching a direct attack.

Deepening restrictions

As mentioned, the United States already exhausted almost all its economic bullets against Iran. According to National Security Advisor Jake Sullivan, however, there is still more the US could do.

At the moment, Iran is banned from almost all trade to and from the United States, including arms sales. Moreover, Iran’s assets in the United States have been frozen for years.

What the US could do is convince its allies in Europe and elsewhere to implement similar sanctions. The EU’s head of foreign policy Josep Borrell said his cabinet is already working on a sanctions package against Teheran. The G7 group at large, which also includes the UK and Japan, said it’s preparing a “diplomatic response” to Saturday’s attack.

Restrictions against Iran could also attempt to block its oil exports, a major source of revenue for the country. Iran is the third-largest oil producer in the Organization of Petroleum Exporting Countries (OPEC).

Most of Iran’s oil passes through the Hormuz Strait, which could easily be blocked by any modern war fleet.

It is however unclear whether such sanctions could actually have an effect. Western enemies including Russia and China would likely continue to trade with Iran, with Beijing keeping its oil imports from the theocracy.

A similar blockade would almost certainly increase global oil prices, which experts already warned could reach $130 per barrel in case of Israeli retaliation.

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