Washington — U.S. President Donald Trump’s unexpected decision to ban all Iranian oil purchases after May 1 – ending exemptions for eight nations – came after hawkish economic and security advisors allayed the president’s fears of an oil price hike, according to three sources familiar with the internal debate.
“No one’s actually tried to take this all the way to zero,” a senior administration official told Reuters, adding that forging a consensus among government agencies required “a lot of work.”
President Donald Trump has been eager to halt Iran’s oil exports since slapping sanctions on the Islamic Republic last November for the first time since 2015, a move intended as punishment for Iran’s nuclear ambitions and its support of armed militant groups in the Middle East. But he initially backed a go-slow approach, providing waivers to allies and trading partners such as China, India and Turkey.
The United States currently removes about 2 million barrels of oil per day from the world’s supply through sanctions on the Iran and Venezuela industries. But Washington hopes that soaring U.S. oil production – now at an all-time high of more than 12 million barrels per day – will keep global markets well-supplied and hold prices down.
By the weekend of April 20, with the initial 180-day waivers given to countries due to expire May 1, top economic and security advisors convinced Trump that the time had come to cut off Iranian oil exports completely, according to the sources, who spoke on condition of anonymity.
The National Security Council played a key role in driving the argument to end the waiver programme – especially Richard Goldberg, a new member of the Trump administration and a longtime advocate for confronting Iran, according to the two sources. He was “instrumental,” one of the sources said.
National Security Adviser John Bolton added Goldberg to the NSC in January.
Previously, Goldberg was an adviser at the Foundation for Defense of Democracies (FDD) think-tank headed by Mark Dubowitz, a leading advocate for tougher handling of Iran since the United States’ first round of sanctions against the country under former President Barack Obama.
In 2012, Goldberg was an aide to then-Senator Mark Kirk, a Republican, and delivered a blow to Tehran by writing legislation that closed Iran’s last legal loophole in selling oil under the Obama sanctions. That legislation targeted the Belgium-based SWIFT financial messaging system over which Iran was conducting billions of dollars in oil trade.
White House economic advisors Kevin Hassett and Larry Kudlow had also called for ending the waivers, according to a second senior administration official.
Trump discussed the matter with Bolton, Treasury Secretary Steve Mnuchin, Energy Secretary Rick Perry as well as Secretary of State Mike Pompeo.
While Bolton and Perry backed ending the waivers, some in Pompeo’s State Department reiterated worries about the potential for rising oil prices, the sources said, but they ultimately dropped their objections and supported the more aggressive policy on Iran.
At the time, the State Department had been engaged in talks with at least five of the eight economies holding waivers, according to sources – China, India, South Korea, Japan and Turkey.