U.S. President goes for new sanctions against Iranian oil

PanARMENIAN.Net - U.S. President Obama agreed on March 30 to tough, new sanctions to slow Iran’s oil exportation by targeting the financial institutions that purchase the country’s oil.

The president said he made the decision after determining world markets have enough crude oil that such sanctions would not hurt U.S. allies, according to foxnews.com.

“There is a sufficient supply of petroleum and petroleum products from countries other than Iran,” the president said. “I will closely monitor this situation to assure that the market can continue to accommodate a reduction in purchases of petroleum and petroleum products from Iran."

Obama got the authority to impose the sanctions through the National Defense Authorization Act.

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.

U.S. officials hope ratcheting up economic pressure will push Iran to abandon its disputed nuclear program and convince Israel to give sanctions time to take hold before pursuing a military strike on Iran's nuclear facilities. The U.S. and allies suspect Iran of pursuing a nuclear bomb. Iran denies 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.

With oil prices already rising this year amid rising tensions over the nuclear dispute between Iran and the West, U.S. officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices.

That's particularly important for Obama in an election year that has seen an increasing focus on gas prices.

Administration officials say a February report from the Energy Information Administration shows there is excess oil supply on the global market. But the report also showed that prices are high.