The US Forbids Us, But Sells It Themselves

An embargo will be carried out on Iran because they have not stopped development of their nuclear program. European Union nations will stop oil imports from Iran on July 1. In the last few days, the U.S. administration has put nations that have not decreased their oil imports from Iran on a black list. The list contains 12 nations, including Turkey.

China is on the top of the list as the country which imports the most oil from Iran, while India is in second place. Other nations on the list, which have not yet been ranked in terms of their oil imports from Iran, include Indonesia, Malaysia, Pakistan, the Philippines, Singapore, South Africa, Sri Lanka, Taiwan and Turkey.

So what will happen if these nations do not cut their purchases from Iran? They will be subject to various types of sanctions. In short, The U.S. will penalize these countries. Let's look at Turkey's situation. Yesterday, American Ambassador to Turkey Francis Ricciardone said, “Some countries decreased their oil imports from Iran by significant levels. We are waiting similar steps from other countries, including Turkey. We expect from Turkey to have a decision on this.” However, the American ambassador is not giving an answer on how the cost of such a step would be compensated for. Because Turkey is a neighboring country to Iran, it imports both oil and natural gas. In return, it sells products to Iran. In 2011 our exports to Iran totaled $3.6 billion, while our imports were $12.4 billion. Halting imports of oil from Iran will lead to a stop of exports to Iran and a major decrease in trade between the two neighboring nations. Despite this, the U.S. is continuing to pressure Turkey. So, what is America doing while it pressures Turkey to stop importing oil from Iran? It is selling wheat and other agricultural products to Iran. Due to a drought in Iran, there is a decrease in wheat production. According to yesterday's edition of The Wall Street Journal, the price of bread in Iran has gone up 30 percent in the last few months.

According the the U.S. Ministry of Agriculture, Iran will import 2 million tons of wheat by June. In addition, it is in talks to import three million tons of wheat from India. The sanctions imposed on Iran allow food exports. However with the ban on the import of oil, America is cutting off Turkey's ability to sell food to Iran. If Turkey cannot import raw energy from Iran, Iran will struggle to import from Turkey.

So, who will profit from this? The U.S. exports nearly $120 billion of foodstuffs per year. In a sense, by applying sanctions to Turkey, the U.S. will be opening a new market for itself. Iran’s population of 78 million has a large need for food.

This year there is a drought in the Middle East and Iran. In Iran, the wheat harvest will begin in May and crop expectations are low. For this reason, the U.S has its eyes fixed on the Iranian and Middle Eastern food market.

As a result of current tension with Iran, strategic food stocks are being created, and the existing stocks are being increased. Therefore, the purchase of additional food products is also being discussed. Let's look at how America transfers the money from its sold goods. There is an embargo in place on the transfer of money between Iran and the United States and some banks have cut ties with Iran. But Iran, sends money through Middle Eastern and European banks to American companies to pay for the goods it is buying. So you can see there is no problem transferring money. In short, the U.S. is saying, “You stop” to the international world and then itself selling goods to the Iranian market. And this is what is known as an embargo.