Washington's Tough Sanctions Against Iran Won't Work

Since its formation, Donald Trump’s administration has once again turned to “maximum pressure” on Iran. This time, Treasury Secretary Scott Bessent said the U.S. would cut Iranian oil exports to 100 barrels a day from the current 1,5 million to 1,6 million barrels a day. That would be a 90% drop. The announcement alone has sent oil prices higher as traders weigh potential supply disruptions. Julianne Geiger, a columnist for OilPrice, analyzes the situation.

Such ambitions sound bold, but history shows that Iran’s commodities trade is far slipperier than Washington would like. The Islamic Republic has spent years perfecting the art of sanctions evasion – deploying a “dark fleet” of shadowy tankers, engaging in mid-ocean ship-to-ship transfers, and shipping crude through willing intermediaries such as China and India. In short, Iran has long had experience skirting sanctions of any complexity. The chances are high that Trump’s new push to make Tehran compliant will fail.



If the US manages to reduce Iran's exports to 100 barrels a day, economy Iran will be hit hard. But it’s more if than when. Even Trump himself seemed hesitant, reportedly reluctant to sign the latest order. Meanwhile, OPEC – led by heavyweights Saudi Arabia and Russia – is keeping a close eye on the situation. Iran, for its part, is already calling for action against the US measures.

The OPEC cartel is trying to maintain balance in the oil market, and a sharp drop in Iranian exports would shake things up, especially since it comes on the heels of tightening measures to limit Russian crude exports. A successful curb on Iranian and Russian oil supplies would have a profound impact on global crude markets, with negative effects, of course.

For now, the market is responding with slightly higher prices. But the real question is whether this crackdown will amount to more than just noise. Iran has repeatedly shown that it can keep its oil moving no matter how many sanctions the U.S. imposes. Traders betting on a long-term supply cut may want to take a closer look at Iran’s strategy before getting too optimistic.