US ‘maximum pressure’ to drive down Tehran’s main source of revenue is succeeding

Iranian oil exports fell to 400,000 barrels per day in May, half the amount it exported in April, indicating the US ‘maximum pressure’ campaign to drive down Tehran’s main source of revenue is succeeding.

Washington reimposed economic sanctions on Iran in November last year after pulling out of the landmark 2015 nuclear deal in May 2018.

US President Donald Trump said the Obama-era deal failed to prevent Tehran developing nuclear weapons and ballistic missile technology, nor stop it from interfering in regional conflicts.

Major importers of Iranian oil, including China, Greece, India, Italy, Japan, South Korea, Taiwan, and Turkey, were initially granted waivers to allow them time to find alternatives.

The US scrapped these waivers in April, exposing those continuing to buy Tehran’s oil vulnerable to sanctions.

The result of that decision is clear in May’s oil export figures – halved since last month and down from 2.5 million bpd last year. Saudi Arabia, the UAE, and the US are expected to fill the gap left in the global oil market.

“We coordinated closely, of course, with them to minimize any negative impact. And our goal … is for everyone to cease importing Iranian oil entirely,” State Department spokesperson Morgan Ortagus said Wednesday, responding to a question about India’s import of Iranian oil and its implications for New Delhi.

“We appreciate everyone who has worked with us steadfastly to get to zero.”

Washington is exerting pressure on Iran to dry up other sources of energy it exports to its neighbours.

The only country that appears to still enjoy a sanctions waiver is Iraq, allowing it to continue importing Iranian energy.

Asked if the Secretary of State would renew the waiver, which is due to expire on June 16, the State Department spokesperson said: “The Secretary has not made a decision on this yet. On March 18, he did grant a 90-day waiver … to engage in financial transactions. I think it’s important to note that those were related to electricity, not to gas, from Iran.”

Asked about the way forward for negotiations with Iran, Ortagus said: “I think that we have been very explicit here: We do not want a war with Iran. We want to deescalate with Iran … In fact, what we seek is to end economic sanctions, to end the maximum pressure campaign. That’s where we want to get.”

The US warned Hong Kong on Tuesday to be on alert for an Iranian vessel that may attempt to dock in its port. Servicing the vessel would breach US sanctions, officials said.

Tensions between the US and Iran have continued to mount. The US sent an aircraft carrier and bomber task force to the Persian Gulf earlier this month. On Saturday it announced it would also be sending 1,500 troops to the Middle East in response to Iranian threats.

Earlier this month, two Saudi Arabian ships were ‘sabotaged’ off the coast of the UAE.

Just two days later, Yemen’s Iran-backed Houthi rebels carried out drone strikes on Saudi oil pumping stations.

John Bolton, the US national security advisor, said Iran was “almost certainly” to blame for the sabotage. Bolton did not however provide evidence for the claim, which Iran called “laughable”.

Oil giant ExxonMobil evacuated 30 of its employees stationed in Basra, southern Iraq, earlier this month following advice from the US State Department that all non-emergency government staff should leave the country, citing an unspecified Iranian threat.

The US diplomatic missions in Baghdad and Erbil have also evacuated staff following unspecified threats.

Arab leaders are set to meet for an emergency summit in Saudi Arabia on Thursday to discuss the repercussions of the attacks on Saudi oil stations.