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How Tehran Survives U.S. Sanctions
(Wall Street Journal) Rory Jones - Iran has spent years setting up a complex system of oil sales and clandestine shadow banking that it hopes will sustain its economy and military long enough to outlast the latest U.S. economic assault. The U.S. naval blockade of Iran's ports has reduced Iranian oil exports to near zero. But Tehran still has 80 million barrels of oil stored offshore in oil tankers, mainly in the waters off Malaysia. Relying on a ship-to-ship transfer system, sanctioned tankers unload crude onto other tankers in international waters to mask the fuel's origin, then ship the cargo to China. U.S. sanctions generally aim to cut off targets from the U.S. financial system. But sanctions become less effective if U.S. enemies avoid the U.S. financial system entirely. Iran's transactions with China are increasingly settled in Chinese yuan, outside U.S. oversight. Iran also uses cryptocurrencies to avoid U.S. oversight. Moreover, Tehran operates a network of shell companies in hubs including Hong Kong and Dubai that are controlled by Iranian exchange houses. These move Iranian oil proceeds into other currencies. As Washington sanctions one front company, Tehran simply spins up another.