Washington - A new Congressional push to sanction Iran's Central Bank is aimed at reducing Iranian oil revenues, but could backfire and hurt the global economy.
On Tuesday, the Wall Street Journal disclosed a letter to the White House signed by 92 senators urging the Barack Obama administration to place new restrictions on dealings with the bank as part of a strategy to "cripple" Iran.
A copy of the letter, obtained Thursday by IPS, alleged that the Iranian Central Bank "lies at the center" of Tehran's efforts to circumvent a long list of sanctions already imposed on the Islamic Republic by the United States and other countries.
Such a step – on top of prior sanctions that bar Iran from most transactions in dollars and make it hard for it to deal in euros – would make it even more difficult for Iran to obtain hard currency for its oil exports.
Experts on the Iranian economy told IPS that the intent was not to cut Iranian oil sales – which could cause a spike in global prices and ultimately help Iran's oil-dependent economy – but to worsen the terms of trade with Tehran by giving more leverage to customers such as China, India and Turkey to strike hard bargains for Iranian crude.
"If this goes through, the big buyers of Iranian oil will be able to squeeze Iran," said Kevan Harris, a sociologist at Johns Hopkins who studies the Iranian economy and recently returned from a trip to Iran.
"You want to move the market so that you have a smaller number of buyers" of Iranian oil, added Mark Dubowitz, director of the Iran Energy Project at the Foundation for Defence of Democracies, a Washington think tank that provides research for Congressional staffers crafting sanctions strategy against Iran.
"You want to remove the 'white-hatted' [reputable Western] buyers and ruthlessly drive the price down" that Iran receives from remaining buyers, he said.
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