Iran could begin feeling a further squeeze on its oil income soon

[DonViejo]

By Joby Warrick, Published: January 19

Ever since European seaports closed their gates to Iranian oil tankers last summer, Iran has looked to the East to keep its economy afloat. Countries such as China, India and South Korea — some of them critics of Western sanctions — have offered Iran a lifeline of reliable markets and much-needed dollars.

But perhaps not for long. In just over two weeks, the Obama administration will begin enforcing a little-noticed statute that could dry up one of Iran’s largest remaining sources of oil income, U.S. officials say. Beginning Feb. 6, Iran still will get paid for the oil it delivers to Asian markets, from Mumbai to Shanghai to Pusan — only not in cash.

The law, part of a package of sanctions approved last year, requires that foreign governments keep any payments for Iranian oil locked up inside bank accounts in their own territory. Iran can use the money only to buy goods from the local economy, such as wheat or medicine or consumer goods. But it can’t collect hard currency that could boost Iran’s beleaguered economy back home, U.S. officials and analysts say.

Administration officials have been quietly anticipating the impact of the new provisions, which could be the most significant since last summer’s measures targeting Iran’s oil and banking industry. A side benefit, officials say, is the potential impact on Iran’s trading partners, which soon will have a compelling new economic interest in supporting tough sanctions against Iran.

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http://www.washingtonpost.com/world/national-security/iran-could-begin-feeling-a-further-squeeze-on-its-oil-income-soon/2013/01/19/2185eaf8-5f5a-11e2-a389-ee565c81c565_story.html?wpisrc=nl_headlines

[leftyohiolib]

1. i thought russia was warning the west about this, to take no further sanctions on iran.