The U.S. is considering tighter sanctions on Iranian oil sales to China as a way to encourage Tehran to conclude a nuclear deal and raise the costs of abandoning stalled negotiations.
U.S. negotiators have been working with European and other international partners in Vienna since April to revive the 2015 deal that limits Iran’s nuclear program in exchange for an easing of broad sanctions. As those talks falter, the U.S. is running through options intended to induce Iran to keep negotiating or punish it if it doesn’t, according to U.S. officials and people familiar with the matter.
One plan being drafted would choke off Iran’s swelling crude-oil sales to China, the country’s main client, through fresh sanctions targeting the shipping networks that help export an estimated one million barrels a day and bring critical revenue to Iran, the officials said.
The new steps would take place if nuclear talks fail, the officials said. The plan would involve the aggressive enforcement of current sanctions already banning dealings with Iran’s oil and shipping industry through new designations or legal actions, the officials said. In the past, the U.S. has, for instance, sanctioned the captain of a Syria-bound Iranian crude tanker and obtained the seizure of fuel cargoes Tehran was sending to Venezuela. “There is not much left to sanction in Iran’s economy,” said one of the U.S. officials. “Iran’s oil sales to China is the prize.”
No decision has been made on proceeding, the officials said. There are risks that the effort could backfire, driving Iran to accelerate its nuclear program. Other options are also being considered, the officials said.
Those include a diplomatic campaign to persuade China, India and other major crude-oil buyers to cut imports of the commodity, non-oil trades, debt financing and financial transfers, a second official said.
Negotiations have stalled as Iran’s hard-line president-elect, Ebrahim Raisi, has said that Tehran won’t agree to a deal without a comprehensive removal of U.S. sanctions, something Washington has said it won’t do. Iran’s deputy foreign minister and top nuclear negotiator, Abbas Araghchi, tweeted Saturday that talks must wait until next month’s inauguration of Mr. Raisi.
Iran’s nuclear program has made strides over the past year. According to estimates of European and U.S. officials, it could amass enough fissile material for a nuclear weapon within two to three months.
The U.S. is warning that while it is committed to the talks, the time to secure a deal under the 2015 accord is running out. “This process is not indefinite,” said Ned Price, spokesman for the State Department. “There will come a point where our calculus will change.”
Should that point come, the second official said, “There are things that are relatively easy to do…and things that would take more time.”