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The Importance of Sanctioning Iran's Central Bank

(Forbes) Ilan Berman - It is painfully clear that the economic pressure levied by Washington so far has fallen short of dissuading Iran's ayatollahs from seeking the bomb. Sanctioning Iran's Central Bank represents one of the most potent ways to hit Iran's chief export commodity: oil. The Central Bank of Iran serves as an intermediary between the state oil company and the Iranian regime's international energy customers. By isolating the bank from global markets, the U.S. can help dry up critical funding for the Iranian regime and its strategic programs. The impact, moreover, could be magnified exponentially if such sanctions are coupled with an international embargo on Iranian crude oil exports - something that European countries have begun to discuss in earnest. The Administration worries about the potential impact of such a designation on global oil prices. However, countries like Saudi Arabia have already indicated their willingness to ramp up oil output in order to offset any commodity price increases that would occur if and when Iranian oil goes offline. And if Washington makes judicious use of the U.S. Strategic Petroleum Reserve to mitigate price spikes in the global energy market, the effects on domestic consumers are likely to be more minimal still. The writer is vice president of the American Foreign Policy Council.
2011-12-09 00:00:00
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