Europe Weighs Unilaterally Easing One Part of Iran Sanctions
Great Britain and other members of the European Union (EU) are in talks about easing sanctions on Iran, the New York Times reports. European countries are worried that one provision of the EU’s sanctions on Iran concerning insurers of ships that transport Iranian oil goes too far.
Rick Gladstone of the New York Times explains:
Concern about the impact of the insurance provision has grown since the European Union announced the embargo early this year, part of a coordinated Western campaign to penalize Iran over its disputed uranium enrichment program, which Iran says is peaceful and Western powers suspect is a cover for efforts to develop the capacity to make nuclear weapons.
Most big maritime insurers and underwriters are based in Europe, and other buyers of Iranian oil are finding it increasingly difficult to buy the required liability insurance needed to ship it as the embargo’s July 1 enforcement date looms.
The provision has also been criticized as hastily conceived by many in the insurance industry, notably the associations of shipowners and charterers who pool resources to provide coverage. They are known as P&I clubs, for protection and indemnity.
This is hardly the first time sanctions on Iran crafted by the West have backfired. The crippling sanctions pushed by groups like the American Israel Public Affairs Committee and then imposed on Iran by the Obama administration is reported to have added 25 cents a gallon to prices at the pump in the US.
Gladstone’s piece notes that “such an easing would most likely be welcomed by Iran as well as non-European buyers of Iranian oil, and it could reduce a potential cause of spiking oil prices.” It’s important to realize, though, that the potential move by the EU would be an individual step that takes place outside the framework of negotiations between Iran and the West.
But within the negotiations framework, Iran has looked to get the EU sanctions lifted. Any deal that saw Iran give up parts of its nuclear energy program would be in exchange for a concession from the West.
The heavy set of sanctions Iran is under due to its nuclear program has weakened the country’s economy.