The Coming Iran Squeeze

by | July 31, 2009

While the Obama administration waits to see whether Iran is willing to talk, Congress is moving forward on tough economic sanctions. A bill targeting Iran's refined petroleum imports now has 71 Senate co-sponsors, and was the subject of a Senate Banking Committee hearing yesterday. The House is scheduled to vote on the measure after its August recess.

A Ha'aretz article today indicates that the Obama team, which has thus far been privately winking at Congressional action on the issue, is getting ready to throw its public support behind the bill:

U.S. National Security Advisor James Jones, who is now in Israel to discuss Iran's nuclear program, indicated that Tehran has until the UN General Assembly in the last week of September to respond. U.S. Secretary of Defense Robert Gates delivered a similar message during his visit here earlier this week. If no satisfactory answer is received, the Americans said, they would work to form an international coalition to impose harsh sanctions on Iran.

A senior source in Jerusalem said the American message to Israel in these talks was to "lower its profile" and refrain from "ranting and raving" about Iran in public until the international evaluation on Iran takes place at the end of September. "Until that date, we must give diplomacy a chance," the official said.

New sanctions would mainly aim to significantly curb Tehran's ability to import refined petroleum products. Despite its huge crude oil reserves, Iran has only limited refining capacity, so it imports large quantities of refined products such as gasoline....

The Americans are proposing financial sanctions such as banning insurance on trade deals with Tehran, which would make it difficult for Iran to trade with other countries. They also want to impose sanctions on any company that trades with Iran and use this to pressure other countries, mainly in Asia, to resist making deals with Iran.

In the next stage, the Americans will consider even harsher sanctions, such as banning Iranian ships from docking in Western ports and, as a next step, banning Iranian airplanes from landing in Western airports.

We could be in for a pretty tense fall on this front.

--Michael Crowley

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