The United States yesterday warned all ports and insurance companies to steer clear of Iranian ships, which it called a “floating liability” after the imposition of sweeping US sanctions. Since Monday, the United States has aimed to end all of Iran’s sales of oil, its crucial export, in a bid to curtail the influence of the Shiite cleric-led state. Brian Hook, the State Department’s special representative on Iran policy, said that the US sanctions extended to insurers and underwriters.
“Knowingly providing these services to sanctioned Iranian shipping companies will result in the imposition of US sanctions,” Hook told reporters. “From the Suez Canal to the Strait of Malacca and all choke points in between, Iranian tankers are now a floating liability,” he said.
He said that Iranian vessels would likely turn to domestic insurers but doubted that they could cover losses stretching into the millions or billions of dollars in a major calamity. “Should there be an accident involving an Iranian tanker, there is simply no way these Iranian insurance companies can cover the loss,” Hook said. He said that the United States, whose military patrols the Gulf and is allied with Iran’s rival Saudi Arabia, did not want incidents. “We sincerely hope there will be no accidents, but accidents are a very real possibility, given Iran’s record,” Hook said.
President Donald Trump in May pulled out of an international agreement negotiated under his predecessor Barack Obama, in which Iran curtailed its nuclear program in return for sanctions relief. The Trump administration said that the deal did not address other concerns, including Tehran’s support for regional proxies such as Hezbollah, and has boasted of the economic contraction forecast in Iran due to the renewed sanctions. The United States has nonetheless granted eight waivers to places including China, India and Japan, which will not immediately be punished for continuing to buy Iranian oil.
Meanwhile, US has granted Iraq a waiver to allow it to keep importing electricity from neighboring Iran despite renewed American sanctions on Tehran, a US official said yesterday. Baghdad relies heavily on Tehran to provide it natural gas and Iranian-generated electricity, and feared that supply would be endangered by Washington’s measures against Iran’s energy sector. The US State Department’s representative on Iran said Wednesday that Iraq had been granted a special permission.
“We granted Iraq a waiver to allow it to continue to pay for its electricity imports from Iran. We are confident that this will help Iraq limit electricity shortages in the south,” Brian Hook told reporters in Washington. “Iraq is a friend and a partner, and we are committed to its stability and prosperity.” Iraq is now expected to demonstrate to the US how it would wean itself off Iranian gas, a well-informed Iraqi source said. “The US gave us 45 days to give them a plan on how we will gradually stop using Iranian gas and oil,” the source said.
On Monday, the United States re-imposed tough sanctions on Iraq’s financial institutions, shipping lines, energy sector, and petroleum products. Iraq has a strong relationship with the United States, coordinating on security, politics, and governance. But its economy is profoundly intertwined with that of Iran, from which it imports consumer goods amounting to around $6 billion (five billion euros) in 2017. It also pipes in natural gas and 1,300 MW of Iranian-generated electricity to cope with power shortages. Most of Iraq’s 39 million people only get a few hours of state-provided electricity per day and rely on power generators. Chronic power outages were a key driving factor behind weeks of massive protests in southern Iraq during the summer.