The US has been quick to resort to economic sanctions to achieve its political and strategic goals, but poor enforcement and immature handling by Washington have blunted their effectiveness.
US sanctions on Cuba have been in place for more than 50 years. Now sanctions have been imposed on Iran and impacted its oil exports and led to a deterioration of the economy and the collapse of the national currency.
Anyone who tracks their impact can notice what they mean for negotiations on Iran’s nuclear programme and on sentiments in the wider Middle East. But, on the other hand, one has to question the effectiveness of such sanctions.
First, the White House issued a resolution to punish Iran’s oil importers, a move that led most countries to adhering to the sanctions. This also led to a drop in Iran’s oil exports by 50 per cent, leading up to a deleterious impacts on the economy. This, more than anything else, has prompted Tehran’s threat to block the Strait of Hormuz if oil sanctions continue.
Japan’s imports of Iranian oil are down by 50 per cent, while those headed for China, India and South Korea are lower by 25-30 per cent. Interestingly, the high oil prices have ensured Iran is coping with the downturn despite the painful repercussions.
This at a time when negotiations between Iran and the P5+1 Group over its nuclear programme have failed and as Iran increases its military expenditure, especially after its enhanced involvement in Syria’s internal conflict, where it is funding Hezbollah operations and compensating the Syrian regime for losses it suffered as a result of the civil war. This is apart from Iran’s involvement in other regional conflicts, such as in Yemen, and its support for allied organisations in the Gulf.
In light of this deterioration in Iran’s financial situation, the US excluded China and India, the two largest importers of Iran’s oil, from sanctions last year. Last month, the US exempted 10 Asian countries, including South Korea, Malaysia and Singapore from Iran’s oil sanctions, a decision that followed the Qusair battles in Syria.
This means US sanctions on Iran’s oil has been abolished in practice, since these countries import more than 65 per cent the country’s crude exports.
Last month, the US lifted sanctions on some modern technologies to Iran — another move that casts doubts on the seriousness of these sanctions, especially as it coincides with the June 14 Presidential election. It places question marks about the effectiveness of such sanctions after whipping up such a big fuss earlier.
In addition to the political aspects and bargaining related to economic sanctions, there are black market mafias, which benefit from oil and oil products smuggling through other countries. There are also companies that reap huge profits from smuggling operations regardless of their varying political stands.
For example, after the Iraqi invasion of Kuwait, Uday (Saddam Hussain’s son) — and Mahdi — son of former Iranian president Akbar Hashemi Rafsanjani — set up a joint company to smuggle Iraqi oil and export it through Iran despite the deep-rooted hostility between both countries at that time.
Therefore, no one can depend much on economic sanctions, as there are political bargains and those related to interests, speculations and smuggling operations that bring enemies together.
Then, only their shared interests matter and these are managed in a pragmatic manner. All that matters is the influence of money in maximising gains.