BICOM

The United States is set to implement a new scheme in February 2013, which could place significant limits on Iran’s already shrinking oil revenue.

Sanctions spearheaded by the US and the European Union have already reportedly more than halved Iran’s oil shipments in 2012. A year ago, the US Congress passed a law requiring any purchasers of Iranian oil to make significant cuts to such acquisitions or else risk being excluded from the US financial system. As a result, Chinese imports of Iranian oil have gone down 22 per cent from January. This trend continued from October 2012, with a 39 and 41 per cent reduction in South Korean and Japanese imports respectively.

David Cohen, undersecretary for terrorism and financial intelligence at the US Treasury Department announced yesterday that a new measure is set to be introduced on February 6 that will further tighten controls on Iranian oil exports. A new law will place stringent limits on how Iranian oil profits can be used, by requiring that a foreign bank handling transactions related to Iranian oil sales must ensure the payments are held in an account within the importing country, and are used only for permissible trade between that country and Iran.

Cohen explained, “We are committed to increasing the financial pressure on Iran as long as necessary, and we will continue to look for innovative ways to make the Iranian regime bear the financial costs of its behaviour…This provision should lock up a substantial portion of Iran’s earnings in each of these countries.”

Meanwhile, Yukiya Amano, director general of the International Atomic Energy Agency, said yesterday that no real progress has been made in talks with Iran over its nuclear programme. He told the Council on Foreign Relations in Washington, “We have intensified our dialogue with Iran this year, but no concrete results have been made yet.” Fresh talks on the issue are expected in January between Tehran and the so-called P5+1 powers, the United States, UK, China, Russia, France and Germany.