U.S. Announces Pause in Efforts to Reduce Iranian Crude Oil Exports

Analysis

White House Press Secretary Jay Carney said June 5 that under the Joint Plan of Action between the P-5+1 and Iran, the United States will put a six-month hold on measures to reduce Iranian crude oil sales in return for Iran's compliance in rolling back its nuclear program. While Carney's statement is not a fundamental shift in U.S. sanctions policy, it does formally acknowledge the tacit U.S. practice of not fully enforcing sanctions on Iran's oil exports.

Under the Joint Plan of Action launched in January, the United States committed to using the authority of the U.S. executive branch to ease up on enforcement of reductions in Iranian crude imports in order to facilitate a nuclear agreement. The plan originally limited Iran's oil exports to around 1 million barrels per day, although the latest figures show Iran exporting slightly more at 1.3 million barrels per day. July 20 is the deadline for the nuclear deal and Iran needs to show its domestic audience that it is securing concessions from the United States as it discusses opening up access to Iranian nuclear facilities and accepting limits on its enrichment program.

Carney's announcement of a pause in efforts to reduce Iran's crude sales is somewhat misleading. The United States largely suspended these efforts at the beginning of the year. That said, the White House statement is already making the rounds in the Iranian media, allowing Tehran to show its constituency that the Iranian negotiating team has the potential to secure a favorable deal. Iran is currently engaged in expert-level talks with the P-5+1 group in Vienna and a number of sticking points remain. The two sides are unlikely to reach a comprehensive settlement on the nuclear issue by July 20, but they could strike an interim deal in which the U.S. administration eases up further on Iranian oil export restrictions and energy-related financial transactions.

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