Waivers for some nations to Iran sanctions necessary?
Inside latest effort to thwart Iranian nuke program
- Duration 4:40
- Date Jun 26, 2012
Inside latest effort to thwart Iranian nuke program
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The new sanctions go into effect in just a few days to clamp down on Iran and its oil sales is so key with the economy.
This is all part of an effort to put so much pressure on Iran.
There is -- well simply stop its pursuit of nuclear power.
Now -- for these -- sanctions go into -- the Obama administration has granted waivers to eighteen countries allowing them.
To keep buying -- riding crude in exchange -- they despite a lesson that.
But why do we really need all those waivers -- do with -- executive director of the foundation for defense of democracies mark do we need this clearance.
Well hi Jenna.
You know -- we needed those waivers at the end of last year and oil markets are very tight and administration was rightly concerned that -- we took -- oil off the market too fast all prices would spike you would hand that Iranian regime a massive economic windfall.
While plunging the rest of us into an oil led recession will market conditions of change market is buoyant it's liquid and I think we have bad.
Much more flexibility right now to significantly reduce.
The volume of Iran in oil that that the regime can sell -- waivers -- are necessary but I think we should significantly raise the threshold.
For those waivers to -- that look like.
Well what it would look like is for the next stats six months or so.
If countries want to be exempted from US sanctions they should be forced to reduce their purchase of Iran and oil by thirty or 40%.
And that could have a significant impact on now Iran's economic life plot which is its oil revenue.
We see South Korea coming out today and saying listen -- actually knocked me do business with Iran to the big question.
For this much bigger economies economies like China for example whether or not they're gonna get -- -- you perceive that.
Well I think the Chinese are slowly getting on board and if you look at there oil imports from January to may.
On that calculation is down by 22 point 5% I think you will see Chinese oil imports actually increase.
From June to July so the real question is will China play ball.
I ultimately think they will I think will be a slow reduction from the Chinese and they're not taking advantage of the significant discounts that are available right now.
As hearings become more and more just a desperate.
Because they care about the diplomatic fallout of the Washington -- good about the next six months.
These -- go into effect on Sunday.
What -- seat.
-- an economic perspective I see Iranian oil revenue -- a ready dropping by about 40%.
And conceivably dropping by a further 78%.
For the next six months so what we're looking at is they think.
It's significantly die generated all revenue but -- the real question is these sessions were not designed to reduce Iranian oil revenue punished Iranian economy.
They were designed to stop Iran's nuclear weapons program and we're seeing no evidence today.
That Iran's supreme leader Ali come NA has cried on call and is willing to reach a negotiated settlement with the the the international community.
So the big question is you think there will be enough pressure will it put enough pressure on the middle class of arrival of put enough pressure on the regime.
Within the next 6090 days or maybe even I started six months that we actually sea change -- do you think these.
Sanctions are just.
Part of an exercise that's leading -- Towards different options.
Well the issue right now is that Iranian nuclear physics is beating western economics and and the nuclear weapons program is moving forward aggressively.
So we have to get really aggressive on these sanctions -- we had any hope of of changing his risk reward calculus.
Or reigniting the democratic counter revolution we saw on June of 2009 but we're on the sanctions dolphins -- attack her where the six right now we gotta get to -- Spinal Tap eleven.
Well -- do you you know you need money though right -- money to get that program off the -- continue to put resources into developing that nuclear program.
So it is so it did they where's the money coming from that is not coming from the oil markets -- there'll be less coming from the oil markets will that actually slow down the processor and or are they getting you know money from somewhere else.
Well it just I got skeptical of their foreign currency reserves or somewhere the neighbor to 16100 billion dollars that they they'll probably make thirty to fifty billion dollars in oil revenues this year.
They've got plenty of money to finish their nuclear weapons program.
And I think the that denying in the funds it specifically to finish the program is a fool's -- what we really need to do.
Is create massive economic crisis and put common -- a choice between is Bob and his regime.
And -- we are a long way from doing that and I'm concerned we don't have the time that again that the physics of the program is beating the the economic pressure that we can't impose.
We may be heading to to a confrontation where we have to start looking at.
Using military force to stop this program opal won't happen.
But sanctions may be too little too late and -- different time lines and where they intersect is so important mark thank you for the time today any now since we always appreciate it that.