Iran, America and New Sanctions

For years a variety of sanctions against Iran have been in place due to its nuclear program.

The first of these were the following, decided upon by the United Nations Security Council: Sanction number 1737 passed on December 23, 2006; number 1747 passed on March 24, 2007; number 1803 passed on March 3, 2008; and number 1929 passed on June 9, 2010.

Apart from these are a series of sanctions passed by the U.S., the EU and other countries. In general, the resolutions target organizations, individuals, programs and firms associated with Iran’s nuclear activities. Most of the targets can be considered part of Iran’s financial establishment. Recently some of them have found their investments and cooperative arrangements with foreign companies, designed to promote Iran’s energy infrastructure and petroleum sector, falling within the sanctions’ parameters.

Apart from the U.S. and the European Union, countries like Canada, South Korea, Japan, Sweden and even India are enacting sanctions against Iran.

As America in its current condition is not strong enough to force Iran to give up its nuclear ambitions, it is opting to enact new sanctions. In the works are possibly dangerous measures that have been previously unheard of and might negatively affect the global economy, such as targeting the Iranian Central Bank and shutting Iran out from the global energy market.

According to sources, among the measures to be taken in the Obama administration’s general plan for sanctions is to punish foreign organizations who do business with the Iranian Central Bank, as well as to forbid those organizations from performing transactions in the United States. According to one of Obama’s national security advisors, these measures are regarded as “final solutions.”

Plans to shut Iran out of the global energy market are undoubtedly dangerous. Obviously, the exclusion of an energy giant like Iran would have negative effects on global energy prices. For this reason, the Obama administration plans to tread carefully. While trying to deal a fatal blow to Iran’s energy sector on one hand, the U.S. is trying to take precautions against disturbing the global energy market on the other. So it is making connections and looking for alternative sources and transport routes for petrol and gas in the event that supplies from Iran should get cut off.

While following all of this, Iran is once again playing the Hormuz Strait card. As Iranian Fleet Commander Admiral Habibullah Seyyari said the other day, in the event that new sanctions are passed, Iran will immediately close the strait to all tanker traffic. America and the world are on notice. Seyyari pointed out that for Iran closing the strait is easier than drinking a glass of water. He added that Iran didn’t plan to make this move today, since it already has control of the Sea of Oman.

In order to avoid spooking the markets, America prefers to remain silent rather than respond to Iran’s threats. Meanwhile, it is probably strengthening its military forces.

To summarize, if both parties don’t ease tensions, we can expect rough times ahead for the already stagnant global economy in the New Year. God willing, those things that we dread will not be realized.