WASHINGTON – The Obama administration cleared the way for tightening sanctions on Iran with a determination that a reduction in the global purchases of Iranian oil wouldn’t harm the world petroleum market.
President Barack Obama determined that though world oil supplies are tight, there is a “sufficient supply of petroleum and petroleum-related products from countries other than Iran” to make the reductions manageable, the White House said in a statement Friday.
Obama was required to make the finding under a 2011 law that sets in motion graduated sanctions aimed at squeezing Iran to persuade it to accept limits on its nuclear program. U.S. officials have been pressing dozens of countries to ratchet back their purchases of Iranian oil to starve Iran’s treasury of revenue and build pressure on its leadership.
The decision comes at an awkward moment for the White House. American consumers are upset about high gas prices, which have risen in part because of the sanctions program.
Yet if Obama had decided that market conditions were not suited for more sanctions, he would have been inviting attack by Republicans as being weak on the issue of Iran.
In a teleconference call with reporters, White House officials sought to play down the sanctions’ effect on oil prices, saying that they were but one cause of many for high gasoline prices. Officials emphasized that the sanctions are not their idea alone, but received a vote of 100-0 in the Senate.
Cliff Kupchan, a Mideast analyst at Eurasia Group in Washington, said that while many factors are affecting prices, some in the oil business “fear that sanctions will shut in up to 1 million barrels a day of Iran crude. … This is a factor applying upward pressure on oil prices.”
U.S. officials have been discussing a release of oil from the U.S. strategic petroleum reserve to try to ease prices.
The decision comes as a six-nation contact group prepares to try to resume talks with Iran over the nuclear program. Diplomats from the group hope to meet with Iranian officials in about two weeks, possibly in Turkey.