U.S. President Donald Trump has reinstated his “maximum pressure” campaign against Iran, aiming to reduce the nation’s oil exports to zero in an effort to prevent Tehran from developing nuclear weapons. This decision comes ahead of his meeting with Israeli Prime Minister Benjamin Netanyahu.
During the signing of the presidential memorandum, Trump characterized the policy as “very tough” and expressed a degree of ambivalence about the move. He reiterated his stance that Iran must not obtain a nuclear weapon, stating, “They’re too close,” when asked about Tehran’s proximity to achieving this capability. Iran’s mission to the United Nations in New York did not respond to requests for comment regarding the renewed sanctions.
Trump has criticized former President Joe Biden for not enforcing oil-export sanctions rigorously, claiming this has allowed Tehran to fund its nuclear ambitions and support militias across the Middle East. According to the U.N. nuclear watchdog, Iran has significantly ramped up the enrichment of uranium to nearly 60% purity, approaching the 90% threshold considered weapons-grade, although Iran denies intentions to develop nuclear weapons.
The memorandum directs the U.S. Treasury Secretary to impose “maximum economic pressure” on Iran through sanctions and enforcement measures against violators. It also mandates a campaign to eliminate Iran’s oil exports entirely. Following the announcement, U.S. oil prices recovered some losses, countering declines linked to ongoing trade tensions with China.
In 2023, Iran’s oil exports generated an estimated $53 billion, with production levels reaching their highest since 2018, according to OPEC data. Trump’s previous sanctions had drastically reduced Iran’s oil exports, but these increased during Biden’s administration as Iran found ways to evade restrictions.
The International Energy Agency has indicated that Saudi Arabia, the United Arab Emirates, and other OPEC members are positioned to compensate for any lost Iranian exports. Notably, China continues to disregard U.S. sanctions, with Chinese firms being the largest buyers of Iranian oil. Beijing and Tehran have established a trading system largely based on the Chinese yuan, circumventing the U.S. dollar and regulatory scrutiny.
Analysts suggest that the Trump administration could leverage the 2024 Stop Harboring Iranian Petroleum (SHIP) law to limit Iranian oil exports. This law, which was not strictly enforced by the Biden administration, permits action against foreign ports and refineries processing Iranian oil in violation of sanctions. A recent decision by the Shandong Port Group to prohibit U.S.-sanctioned tankers from docking indicates the potential effectiveness of SHIP.
Trump has also instructed his U.N. ambassador to collaborate with allies to reinstate international sanctions on Iran, utilizing mechanisms from the 2015 nuclear deal that lifted sanctions in exchange for limits on Iran’s nuclear activities. The U.S. withdrew from this agreement in 2018, prompting Iran to gradually abandon its nuclear commitments.
Britain, France, and Germany have signaled their readiness to trigger a snapback of international sanctions against Iran if necessary, a process that will expire on October 18 under a 2015 U.N. resolution associated with the nuclear deal. Iran’s U.N. ambassador has denounced the invocation of snapback sanctions as “unlawful and counterproductive.”
In recent months, European and Iranian diplomats have held discussions aimed at reducing regional tensions, including those surrounding Iran’s nuclear program, in the lead-up to Trump’s reinstatement of the maximum pressure policy.
