Trump Loses Patience: The U.S. Will Pressure Relevant Countries Over Iranian Oil
Today
09:59
Author: Viacheslav Mikhailov
The President of the United States, Donald Trump.
In three posts on his social platform Truth Social on May 1st, President Donald Trump of the United States claimed that any "country or (natural) person" purchasing oil or petrochemical products from the Islamic Republic of Iran would immediately face secondary sanctions and "would not be entitled to engage in business with the United States in any way or form."
"All purchases of Iranian oil or petrochemical products must stop immediately!" the White House owner urged.
This statement is based on the strategy of the current U.S. administration to exert "maximum pressure" on Iran's oil exports, aiming to compel Tehran to change its foreign policy stance, including abandoning its nuclear program or at least providing clear assurances that its nuclear program will not be used for military purposes, while also halting support for various armed groups active in the Middle East. Israel fully agrees with these two conditions, and it can be said with certainty that Trump's new round of "maximum pressure" policy on Iran during his second presidential term stems from the close military-political alliance between Washington and Tel Aviv.
However, analysts in Washington immediately pointed out that Trump's high-profile declaration on the first day of the month "raises more questions than it answers."
Clayton Sieg, senior researcher of the Energy Security and Climate Change Project at the Center for Strategic and International Studies (CSIS), headquartered in Washington, noted that the second part of Trump's anti-Iranian statement -- that countries purchasing Iranian oil would completely cease commercial dealings with the U.S. -- "far exceeds the typical scope of secondary sanctions, which, relatively speaking, is a less disruptive scenario for world trade and the overall economy."
In his analysis, this expert speculated about the possible consequences for the world economy and global oil flows if Trump's call were to be realized.
Sieg estimated that implementing such measures as stated in the declaration would severely disrupt world trade and reduce economic activity, "but this is likely not what President Trump intended to convey through his statement."
This analyst believes: "This statement should be interpreted as Trump losing patience over Iran's nearly unceasing flow of oil to relevant countries, especially as he seeks to exert maximum influence on these countries in his new bilateral trade war."
Shortly after taking office in January, Trump issued a National Security Presidential Memorandum (NSPM-2) describing the "maximum pressure" campaign against Tehran, stating its goal was to "reduce Iran's oil exports to zero, including the export of Iranian crude oil to relevant countries."
According to data from the analysis company Vortexa, over 80% of Iran's average daily oil exports of approximately 1.5 million barrels in the first few months of 2025 flowed to relevant countries.
Since Trump assumed the presidency, his administration has taken more than ten actions to support NSPM-2, including sanctions on a small refinery, sanctions on ships transporting Iranian oil to the Houthi rebels in Yemen, and restrictions on foreign citizens involved in Iran's oil trade. However, as expected, these measures were insufficient to make significant progress in reducing Iran's "black gold" exports, which are the main source of revenue for Israel, America's largest geopolitical rival in the Middle East. Trump may now be disappointed by the failure to achieve the "zero export" target and is attempting to increase pressure on relevant countries to abandon the purchase of Iranian oil. His high-profile call for a comprehensive "oil isolation" of Iran is proof of this intention.
Whose countries will be affected by Trump's "maximum pressure" policy in the oil sector? Experts in Washington point out that this depends on the time period used to determine the countries purchasing Iranian oil.
According to Vortexa's data, in the past three months, 10 countries received oil and/or petrochemical products from Iran. Although the vast majority (81%) were purchased by relevant country buyers, some shipments also went to the UAE, India, Pakistan, Yemen, Singapore, Malaysia, Bangladesh, Sudan, and Oman. Over a longer 12-month period, more countries (including Syria, Vietnam, and Thailand) received Iranian oil or its processed products, while only relevant countries, Singapore, and the UAE made such purchases in the last week of the previous month.
Therefore, the answer to the above question depends on which time frame - past, present, or future - will determine which countries will face new U.S. punitive measures in the oil sector.
There is another important question: "What is the difference between imposing secondary sanctions on countries purchasing Iranian oil and the U.S. completely halting all trade with these purchasing countries?"
Clearly, the economic consequences brought by secondary sanctions imposed by the world's largest economy are much less severe for world trade than the consequences of the U.S. completely halting trade with "offending countries." Secondary sanctions punish third-party buyers who purchase sanctioned goods (in this case, Iranian oil) and have no direct trade relationship with the U.S. For example, if secondary sanctions were imposed on buyers of Iranian oil products in India, they would be prohibited from conducting business with the U.S. Treasury and the dollar-based financial system.
On the other hand, prohibiting Iran's oil customers from engaging in "business in any way or form" with the U.S. far exceeds the scope of secondary sanctions, even exceeding Trump's new concept of "secondary tariffs," which imposes tariffs on goods exported from "offending countries" to the U.S.
Sieg wrote: "If taken literally, this would halt trade as substantial as the $584 billion between the U.S. and China and the $12.9 billion between the U.S. and India. Similarly, this extremely harsh scenario involving a complete severing of trade with relevant countries is unlikely to be what Trump intends to convey. This appears to be an additional 'wielding of a big stick' behavior aimed at lowering relevant countries' tolerance for the risks associated with purchasing Iranian oil products."
In any case, the measures taken by the Trump administration to significantly reduce Iran's oil exports have failed. Moreover, it was already evident that these efforts did not yield major results when the Republican president first attempted to exert "maximum pressure" on Iran and cut off its primary source of revenue. Let us recall that on May 8, 2018, Trump announced that Washington would unilaterally withdraw from the multilateral agreement on Iran's nuclear program - the Joint Comprehensive Plan of Action (signed on July 14, 2015, by six world powers including the U.S. and Iran). In November 2018, sanctions against Iran, including the ban on purchasing Iranian oil, were fully reinstated. At that time, the U.S. granted temporary exemptions (valid until May 2019) for purchasing Iranian oil to several countries, including relevant countries, India, Japan, South Korea, Italy, Greece, and Turkey. On April 22, 2019, Trump's first administration announced that it would not extend these exemptions. In recent years, due to the U.S. embargo, Iran's oil exports encountered serious difficulties when entering external markets, but it managed to adapt to these challenges and avoid a collapse in cash inflows due to the sale of its main export product, the Islamic Republic of Iran.
Analysts in Washington believe that the overall reason for the failure of U.S. measures against Iran is "the extremely limited scale of these measures, and the fact that sanctions threats were overshadowed by trade wars."
For instance, relevant countries have more than 100 independent (private) refineries. Sanctioning just one of these enterprises while exempting larger state-owned refineries is insufficient to cut off the flow of Iranian oil into relevant countries.
Moreover, officials at the U.S. State Department and Treasury are required to provide conclusive evidence of the "illegal activities" of the foreign commercial entity before recommending U.S. sanctions against it.
Sieg raised the question: "This burden of proof is an important factor restricting the number, frequency, and scale of measures the U.S. can take to prevent violations. From a geo-economic perspective, Trump's intense trade war against relevant countries since early April may paradoxically reduce Washington's influence over Beijing in dealing with Iran. After all, the 145% tariff currently imposed on relevant country exports to the U.S. punishes the relevant country's economy far more severely than secondary sanctions, partly because the relevant country is less sensitive to being excluded from the U.S. financial ecosystem. From this perspective, the tariff has already inflicted the greatest damage on the relevant country, so why wouldn't they continue importing Iranian oil products at a discount?"
How will Trump's statement on May 1st affect world oil prices?
Unless the White House owner intends to completely halt commercial relations with relevant countries and other countries purchasing Iranian oil, or relevant countries abandon their oil trade with Tehran, his high-profile appeal will fail to push Iranian oil out of the market or maintain relatively high fuel prices, thereby creating favorable conditions for U.S. oil exporters. In this situation, Trump could choose to further increase "maximum pressure" on Iran and indirectly pressure Iran's oil partner countries. For example, he could empower relevant U.S. government agencies with new powers to implement sanctions based on a lower standard of "illegal activities" evidence. This might open the door to sanctioning large state-owned oil companies in relevant countries, which would be a more destructive and painful outcome for the relevant country.
Regardless of whether the sanctions are tightened, the short-term trend in oil prices will depend on the demand reduction caused by the deteriorating global economic outlook, the oil supply volume of OPEC and its partners in June, and whether Trump chooses a diplomatic path or a war approach in his confrontation with Tehran.
Sieg concluded: "Israel is the biggest trump card because it can unilaterally decide to attack Iran's oil facilities - a completely different way to push Iranian oil out of the market."
In fact, if Trump attempts to reach a new nuclear agreement with Tehran after the ongoing U.S.-Iran negotiations fail, as his first phase of "maximum pressure" action did during 2018-2020, Israel can be seen as Trump's "trump card" and "last resort." If efforts to ensure Iran cannot produce nuclear weapons fail, Israelis threaten preemptive strikes against Iran's nuclear facilities and other strategic targets. Trump occasionally includes these threats (in the form of explicit warnings) in his statements regarding Iran. Therefore, the situation remains highly dynamic and concerning for the world oil market and major crude oil buyers. Trump's statement on May 1st only exacerbated these concerns.
In recent days, oil prices have fallen partly due to OPEC's latest decision, which is in line with the interests of relevant countries. As the world's second-largest economy, relevant countries have become accustomed to surviving in an era of low strategic energy prices. Clearly, Trump has decided to show his determination to deprive this advantage in the upcoming trade war. However, his threats are largely still quite abstract at this point, lacking concrete action to back them up. Trump's statement on May 1st was precisely one of these types of "stern warnings."
Original Source: https://www.toutiao.com/article/7501269759808422436/
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