Where Obama Fails on Iran Sanctions, the Gulf States Can Step In Saudi Arabia and its allies have potent financial weapons to deploy. Some are already kicking in. By David Andrew Weinberg and Mark Dubowitz
http://www.wsj.com/articles/where-obama-fails-on-iran-sanctions-the-gulf-states-can-step-in-1456096639
Meaningful new U.S. sanctions on Iran will have to wait for the next administration. President Obama continues to oppose congressional efforts to inflict financial pain on Tehran for its malign activities. In January the Treasury Department finally did react to Iran’s unlawful ballistic-missile tests, but those sanctions will cause no economic damage. Instead they targeted individuals and companies—procurement networks that Tehran can easily reconstitute.
The Gulf States might not be so timid: Saudi Arabia and its allies have potent financial weapons they can deploy against Iran. The sectarian war between the Sunni and Shiite states is intensifying militarily, with proxies fighting from Syria to Yemen, and economically. On Jan. 4 Riyadh announced an end to all commercial relations with Iran and said it would cut off travel, with an exception for pilgrims visiting holy sites. In response Tehran banned imports of all Saudi products.
Last week the Saudis teamed up with Russia to propose capping oil production at January levels, putting pressure on Tehran to do the same as it tries to rescue its battered economy. Riyadh has deployed oil as a weapon before. In 2012 and 2013, after sanctions halved Iranian oil exports, Saudi Arabia raised production to prevent global price shocks. As the Iran nuclear deal was being negotiated in 2014-15, the Saudis increased oil production again. That helped to push prices below $35 a barrel. Now as Iran re-enters energy markets, desperate for economic relief, it will get only about half the price for its oil on which it based its budget last year. READ MORE ATE SITE
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