U.S. President Barack Obama is moving ahead with tough new sanctions aimed at squeezing Iran’s oil exports, The Associated Press reported on Friday.
The decision was made after Obama determined there is enough crude on world markets to take the step without harming U.S. allies, the report said.
Obama’s move allows the U.S. to go forward with sanctions on foreign banks that continue to purchase oil from Iran. The sanctions aim to further isolate Iran’s central bank, which processes nearly all of the Islamic republic’s oil purchases, from the global economy.
Obama signed a sweeping defense bill at the end of December which gave him until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran.
Obama announced his decision in a statement Friday, after a source initially confirmed the news to AP.
According to Obama’s statement, he based his decision on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors. He said he would keep monitoring the global market closely to ensure it can handle a reduction of oil purchases from Iran.
AP noted that the congressionally mandated sanctions target foreign financial institutions that do business with Iran’s central bank, barring them from operating in the U.S. to buy or sell Iranian oil.
The penalties are to take effect at the end of June, around the same time Europe’s embargo on Iranian oil kicks in.
Countries can still avoid the sanctions if they take steps to significantly reduce their imports before then, the report said. Domestic and foreign policy concerns have complicated the administration’s decision to pursue the oil sanctions.
Earlier on Friday, Turkey announced it was reducing oil imports from the Islamic Republic by 20 percent.
This week the U.S. hit six Iranian firms and shipping executives with sanctions, for allegedly dealing in weapons of mass destruction and ballistic missile technology.
Two weeks ago, the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, announced that it is cutting off some 30 Iranian banks and subsidiaries from its network, as part of global efforts to punish Iran for its nuclear weapons program.
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