Will EU sanctions on Iran work?
Will oil sanctions stall, prevent, or exacerbate Iran's nuclear programme?
The European Union (EU)’s decision to ratchet up sanctions against Iran raises tensions between Iran and the West, but is unlikely to dent Iran’s efforts to develop nuclear technologies.On Monday 23rd January the EU announced a ban on Iranian oil imports as well as sanctions against Iran’s central bank. The announcement followed a meeting of EU foreign ministers to decide on the next policy step to stall Iran’s development of nuclear technology and force the Islamic republic into negotiations.
British Foreign Secretary, William Hague, stated that the “sanctions show how serious EU member states are about preventing nuclear proliferation and pressing Iran to return to the negotiating table.\" Meanwhile, Washington also announced new sanctions against Iran’s third largest state-owned bank, Bank Tejarat, and its affiliate the Trade Capital Bank.
The sanctions come days ahead of a high-level visit to Iran by the UN’s International Atomic Energy Agency for talks on Tehran’s nuclear activities. Tehran maintains that it is enriching uranium solely for civilian power production. Previously, Brazil and Turkey negotiated a deal in which Iran would ship much of its enriched uranium for further processing abroad and the uranium would then be returned in the form of fuel rods for a medical research reactor. However, this deal was rejected by the United States, preferring instead to impose sanctions against Iran. Western governments and intelligence agencies remain highly suspicious of Iran’s nuclear intentions; suspicions compounded this week by rumours of the rehabilitation of a potentially military-proof, and once secret, enrichment plant near the Iranian holy city of Qom.
Previous sanctions against Iran have had little affect on Iranian policy, and there is much scepticism regarding the likely impact of Monday’s announcements. Europe accounts for just 18% of Iranian oil exports and, according to Iran’s Oil Ministry, the country has had plenty of time to prepare for sanctions and secure alternative markets. Instead, the impact will likely be felt by ordinary Iranians as the sanctions devalue the Iranian Rial, inflating prices in Iran.
Effective sanctions against Iran’s oil sector would require participation from major importers such as China, India, South Korea and Japan, which between them purchase 59% of Iran’s oil. Despite encouragement from the US this is unlikely. China, Iran’s biggest customer, will not cut back its imports from Iran, while India’s Oil Minister said on Monday that sanctions were forcing down the price of Iranian oil and that India intended on taking full advantage, buying as much of Iran’s oil as possible.
The announcement of sanctions appeased Israel, which has been threatening strikes against Iran if it continues along its current course. However, should sanctions prove ineffective, Israeli sabre rattling is likely to return, as are clandestine assassinations of Iranian nuclear scientists. Continued violations of Iran’s sovereignty may actually serve to heighten its desire to boost defences and develop military nuclear technology.