U.S. President Barack Obama gave the green light Friday for sanctions that will target Iran's oil exports in a bid to pressure it on its nuclear program.
The White House said it had determined there was enough non-Iranian oil supply worldwide to move forward with sanctions passed by Congress last year that will target foreign entities doing with Iran's central bank, which channels funds involved in its oil exports.
There currently appears to be sufficient supply of non-Iranian oil to permit foreign countries to significantly reduce their import of Iranian oil," the White House said in a statement, pointing to estimates of demand as well as global oil inventories.
"In addition, international concerns over Iran's nuclear activities and recent steps taken to reduce the amount of Iranian crude oil and petroleum product imports are contributing to an increased demand for non-Iranian crude oil," the statement said
The U.S. already has a ban on importing Iranian oil, but the new sanctions will now force other countries to give up their trade with Iran or face penalties.
However the U.S. has already granted waivers to the European Union and Japan, which are making significant steps to reduce their reliance on Iranian oil. The EU approved an oil embargo against Iran in January that will only take effect July 1.
Once the U.S. and EU efforts go into effect, "Iran will face a degree of pressure that is above and beyond anything that it has experienced before with regard to sanctions," a senior administration official told reporters.
The White House declined to speculate on what impact the move would have on already-high petrol prices, but noted that many other factors, including soaring international demand, are heavily influencing the price of oil. It did not announce a tapping of US strategic oil reserves that could temporarily increase the supply of oil and lower prices, but an official said the option remained open.
The new U.S. sanctions are set to go into place June 28, and the U.S. said it will continue to hold talks with other countries in hopes they will reduce their reliance on Iranian oil before then.
China, India and South Korea are among the countries that could be impacted, and a senior administration official said Obama discussed the issue with a number of leaders on the sidelines of a summit in South Korea this week. The US could grant exemptions to other countries in coming weeks if they show they are reducing their imports, the official said.
State Department spokesman Mark Toner said that no further exemptions were yet due to be announced, but that talks with several countries, including India, were ongoing.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now