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Hitting Iranian Mullahs Where it Hurts — Oil Prices

6:05 PM, May 31, 2011 • By MARK HEMINGWAY
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In today's Wall Street Journal Reuel Marc Gerecht and Mark Dubowitz discuss a novel approach to sanctions on Iran:

If we buy oil from despotic states, are we somehow complicit in their crimes? Even after the Arab Spring has highlighted tyranny in the Middle East, Americans and Europeans still generally remove oil and natural gas from their moral calculations.

But what if we could do a lot of good by sanctioning Iranian oil? Is it possible, moreover, for Europeans to continue to buy Iranian crude but give the Iranian regime less money? And could China and India, major oil customers of Tehran who couldn't care less about the regime's behavior, purchase as much crude as they want and still hurt the mullahs' ability to translate oil wealth into nefarious actions?

The answer to all three questions is "yes." All buyers need is more incentive to shop ruthlessly whenever they buy from Tehran. Washington could provide it by declaring the United States an Iranian-oil-free zone. Any company that exports an oil-based product to America—gasoline, plastics, petrochemicals, synthetic fibers—would have to certify that no Iranian oil was involved in its manufacture.

Gerecht and Dubowitz estimate that this would lower the cost of Iranian oil by about 10 percent, which would both punish the repressive Mullahs and at the same time make Iranian oil cheaper to those still buying it. They discuss the proposal in much more detail, so be sure and read the whole thing.

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