The next step in the Trump administration’s “maximum pressure” campaign against Iran comes this Sunday, Nov. 4, when the most severe sanctions will be imposed on the Islamic Republic. Crucially, they apply not only to Iran but to anyone who continues to do business with it.
It’s not yet clear how disruptive this move will be. While the U.S. intention is to isolate Iran, it is the U.S. that could wind up being more isolated. It depends on the rest of the world’s reaction, and especially Europe’s.
The issue is so fraught that disputes over how to apply the new sanctions have even divided Trump administration officials.
The administration is going for the jugular this time. It wants to force Iranian exports of oil and petrochemical products down to as close to zero as possible. As the measures are now written, they also exclude Iran from the global interbank system known as SWIFT.
It is hard to say which of these sanctions is more severe. Iran’s oil exports have already started falling. Theypeaked at 2.7 million barrels a day last May—just before Donald Trump pulled the U.S. out of the six-nation accord governing Iran’s nuclear programs. By early September oil exports were averaging a million barrels a day less.
In August the U.S. barred Iran’s purchases of U.S.-dollar denominated American and foreign company aircraft and auto parts. Since then the Iranian rial has crashed to record lows and inflation has risen above 30 percent.
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Revoking Iran’s SWIFT privileges will effectively cut the nation out of the dollar-denominated global economy. But there are moves afoot, especially by China and…