Efficacy of Sanctions on Oil-Exporting Countries Doubtful By Erfan Ghassempour* | ID -InDepth e!

sEssay "E#$% &ID ' - One of the main reasons for putting sanctions in place is to restrain the target go(ernment) in*i(i*ual or group from continuing an acti(ity !hich is belie(e* to be against international peace an* security+ Sanctions usually in(ol(e the restriction or ban on international tra*e an* finance+ One prominent example is oil sanctions+ "hese can be impose* on import or export of petroleum pro*ucts+ %n example of the former is the sanctions impose* by %rab oil-pro*ucing countries against the ,+S+ an* European countries supporting Israel an* of the latter sanctions by the ,+S+ an* European countries against Ira- in .//0s an* Iran+ "he other !ay of imposing sanctions in the oil in*ustry is to forbi* foreign oil companies from in(esting in the sanctione* country+ #a(e sanctions against oil-exporting countries reache* their purpose so far1 %t first glance) history sho!s that sanctions ha(e put a lot of pressure on the countries that ha(e been sub2ect to them) but they ha(e not influence* their beha(ior+ "he main sufferers of sanctions are people rather than go(ernments) because in many sanctione* countries) many people3s li(es are tie* to oil) *irectly or in*irectly+ "he !orl* has seen the gra(e impact of oil sanctions on the people of Ira-+ Sanctions force* the country close to a state of famine+ "he recent onerous sanctions against Iranian petroleum exports ha(e *iminishe* the go(ernment3s earnings !hich account for o(er 40 per cent of its re(enues+ Sanctions ha(e ta5en a *ramatic toll on Iran3s economy *uring 60.6-60.7 an* cause* some uninten*e* conse-uences such as the shortage of me*icine+ Sanctions ha(e also plunge* the country3s currency (alue+ "he $ial has lost t!o-thir* of its *ollar (alue since 60..+ "his resulte* in an intense inflation) !hich also impacts the people rather than the go(ernment) because it has cause* in*ustrial *e(astation an* layoffs that are more relate* to people than the go(ernment+ Sanctions on exporting oil also are ineffecti(e from another (ie!+ Oil is a global in*ustry that can be connecte* to many countries from its extraction from an oil fiel* to be consume* as (arie* petrochemical pro*uctions+ Cru*e oil may be pro*uce* in one country) refine* in another an* consume* in a thir* one+ Once refine* it becomes *ifficult to *etermine !hether the oil originate* from a sanctione* country+ %lthough sanctions *ecrease the amount of oil sales of the sanctione* country) an* in Iran3s case) they cause* Iran to be pai* in goo*s) but it is completely impossible to ban all countries from importing petroleum from an oil-exporting-sanctione* country+ %fter imposing sanctions) many countries *o not pay attention to them an* carry on importing oil from the sanctione* country an* some others e(a*e sanctions+ 8or example) an* accor*ing to Oil Price) 9some of Iran3s problems &in exporting oil' came from the un!illingness of tan5er companies to ris5 ,S retaliation by carrying Iranian oil:Iran therefore has bought from China .6 huge oil tan5ers) each of !hich can carry 6 million barrels of petroleum+ It !ill therefore be in a position o(er coming years to export to China an* In*ia !ith its o!n tan5ers;+

<ean!hile many countries are ine(itably exempte* from sanctions+ .= months after ,+S+ sanctions targeting Iran3s oil sales) half a *o>en countries) particularly China are still importing large (olumes of Iranian cru*e an* are repeate*ly being exempte* from the sanctions+ %lthough sanctions ma*e some huge multinational companies such as "otal an* Eni to lea(e Iran) the t!o go(ernment-o!ne* Chinese companies) namely Sinopec an* C ?C ha(e replace* them in Iran an* are no! !or5ing in t!o of the country3s largest 2oint oil fiel*s !ith Ira-+ Sinopec is !orl*3s fifth largest company by income an* C ?C has 70 international pro2ects aroun* the !orl*+ <ean!hile) in 8ebruary this year) Iran offere* $ussian companies to *e(elop some of its oil fiel*s an* accor*ing to Russia Beyond The Headlines) $ussia3s energy minister has state* that 9@arube>hneft has expresse* its *esire to ta5e part in hy*rocarbon pro2ects in Iran+ "he company is .00-percent state-o!ne* an* has no nee* to fear ,+S+ sanctions;+ 8urthermore) accor*ing to The Times of India) In*ia has expresse* its *etermination to continue to pursue its energy cooperation !ith Iran+ "he In*ian refinery possesse* the capacity of .AA million metric tons by 60.6+ "he country is emerging as a refinery hub an* refining capacity excee*s the *eman*+ "herefore) In*ia nee*s safe an* secure imports an* !ill nee* to import more oil from Iran+ Other countries are in nee* of Iranian cru*e an* cannot buy cru*e oil from other suppliers) because their refineries are *esigne* to 2ust process the Iranian cru*e+ Ineffective Bestern authorities ha(e state* that oil sanctions are a tool to cut fun*ing for Iran3s suspecte* pursuit of nuclear !eapons an* ma5e it to cease its nuclear program imme*iately) but Iran3s go(ernment has a huge amount of har* currency reser(es !orth billions of *ollars !ith !hich it can 5eep up its nuclear program for oncoming years+ "here is a consensus sanctions ha(e not) to *ate) reache* their ob2ecti(e of compelling Iran to halt its suspecte* nuclear program+ %ccor*ing to some ,+S+ officials) sanctions ha(e slo!e* Iran3s nuclear efforts) but this !as not their main ob2ecti(e+ ot only sanctions ha(e not reache* their main purpose) they ha(e also cause* many negati(e collateral conse-uences+ Cenneth Cat>man in his se(eral C$S reports for the ,+S+ Congress has state* that sanctions *i* not ha(e an a*(erse effect on Iran3s nuclear program *ecisions an* capabilities+ Sanctions ha(e reache* their collateral ob2ecti(es) but many experts pre*ict that reaching the main ob2ecti(e is almost impossible by sanctions+ %s it is state* in $ussia3s foreign ministry statement poste* in 60..) DSuch a practice seriously obstructs a*(ancement to!ar* a constructi(e *ialogue !ith "ehran+ Stronger sanction pressure) !hich some of our partners see almost as a goal in itself) !ill not encourage Iran to sit *o!n at the negotiating table+D "he go(ernment3s acti(ities are not ones that coul* be *amage* by sanctions+ "he tool shoul* be change* to be proportione* to the ob2ecti(e or the ob2ecti(e shoul* be change* to be proportione* to the tool+ "he global community can ma5e a country to change its beha(ior by t!o *ifferent !aysE either by compelling or by persua*ing it+ "he main tool for the former is imposing sanctions an* the main tool for the latter is negotiation+

Bhy *o go(ernments impose sanctions e(en !hen they harm harshly the sanctione* country but *on3t ser(e the goal1 One has to in(estigate this issue in t!o perio*sF before an* after imposing sanctions+ Before imposing sanctions an* by threatening an oil-exporting country to impose sanctions on it in the near future) the sai* country !oul* not bo! to them) because either it thin5s that the sanctions may or !ill not completely harm its economy or e(en if it speculates that the sanctions !ill be harmful) its pri*e !ill not allo! it to change its beha(ior+ %fter imposing sanctions !hich ha(e harme* the target country3s economy &such as Iran') the go(ernment lea*ers of sanctions imposing countries may claim that sanctions ha(e been effecti(e) but may continue their actions because of false pri*e or obstinacy+ Subse-uently) although oil sanctions are (ery strong tools to put pressure on a country) the pressure *oes not change the target country3s beha(ior at all+ *Erfan Ghassempour is *oing <asters in International Ga! at the %llameh "abatabai ,ni(ersity) "ehran) !ith focus on HIn*irect Expropriation in the International Oil an* Gas %rbitration3+ %s Bachelor in Ga! he !rote thesis on H"he $ole of ,nite* ations on ?re(ention of Bars3+ IID -

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