The momentum to restrict Iranian oil exports has stalled, and it is time for Congress to eschew a more gradualist approach and mandate zero oil exports with zero waivers. This, along with more concrete military pressure, could increase the otherwise slim chances for success in expected new talks with Iran. U.S. lawmakers and Obama Administration officials should not fear the impact on the oil market, which can manage a cutoff of Iranian oil revenue better than can Tehran.
Iranian oil exports have fallen but plateaued, to less effect than commonly understood. Oil exports dropped 22 percent in 2011-12 to 1.7 million barrels per day (mmb/d), but exports in the first half of this year roughly equaled those in the second half of last year. The drop last year followed the European Union’s oil embargo, and some countries cutting back to receive waivers from the Obama Administration. Existing U.S. sanctions allow waivers for countries “significantly reducing” Iranian crude purchases, which the Administration interprets as roughly a 20 percent cut.
