March 21st, 2012
Econintersect: In an attempt to circumvent Iran's attempt of gaining more nuclear capability, the U.S. has issued a warning to the world detailing the use of sanctions against any country that buys oil from Iran. That is any countries except for a select few: Japan, Germany, Greece, Belgium, Italy, the Netherlands, the Czech Republic, Poland, Spain and the U.K. These countries have already proven that they have significantly reduced their Iranian oil imports.
In support of a U.S. law which was enacted 31 December 2011, other countries around the world will have until 28 June 2012 to prove that they have largely reduced their Iranian oil purchases or be severed from the U.S. financial system. What constitutes a large enough drop in oil purchases from Iran is still in question. Twelve unnamed countries which are not included in the exception include: South Korea, China and India.
So far, only a couple of months after the passage of the National Defense Authorization Act for Fiscal Year 2012, the U.S. has made progress in halting the exporting of oil from Iran. President Obama is putting more pressure on Iran to comply with international standards and halt it's nuclear program.
"Tehran must understand it cannot escape or evade the choice before it. Meet your international obligations, or face the consequences."
Video Source CNN
The U.S. government has used Japan as the prime example for other countries trying to reduce their Iranian imports. It now imports roughly 22% of its oil imports from Iran. The EU's Iranian oil imports account for around 18% of its total imports. The EU has already decided to cut off all imports from Iran by 1 July 2012 so as to have any ties to Iranian crude or be affected by U.S. sanctions.
President Obama has until 30 March 2012 to decide whether or not the countries not exempt have reduced their Iranian oil imports to an acceptable number. If they have not satisfied the requirements they will face being cut off from the U.S.
The good news: Saudi Arabia's sticking to its previous decision to boost production to prevent any spikes in oil prices due to the sanctions.
Video Source CNN