DAVID GREENE, HOST:
The U.S. State Department is expected to tighten the screws on Iran's oil industry today. And in doing so, the U.S. government is also going to be putting pressure on some of its own allies, like Turkey and Japan. Those countries and a few others have been given waivers from sanctions to continue buying Iranian oil. Those waivers are expected to end.
And joining us to talk about it is Demetri Sevastopulo. He is the Washington bureau chief for the Financial Times. He's been reporting on this. Good morning.
DEMETRI SEVASTOPULO: Good morning, David.
GREENE: So these are waivers to sanctions that are expected to be taken away. Can you just step back and remind us what these sanctions were in the first place?
SEVASTOPULO: Sure. Well, I mean, the U.S. has had sanctions on Iran for a long time. But when the Obama administration signed a deal with Iran in 2015, the landmark Iran nuclear deal with the other permanent members of the United Nations Security Council, they essentially arranged for waivers so that sanctions that were in place before would not be enforced. Now, when Donald Trump pulled out of the Iran nuclear deal in May of 2018, he signaled that he was going to snap back on those sanctions that had been waived for a long time.
In connection with that, the U.S. had been trying for a long time to get its allies and some partner countries to reduce their imports of Iranian oil anyway. And then leading up to November, when the broad sanctions on Iran were put back on last year, the administration said it was going to make sure that its allies and partners reduced oil imports from Iran to zero.
However, when it got close to the point, it actually did give a set of eight waivers to the countries that you mentioned and said it would give them more time - 180 days - to start trying to reduce their imports and their reliance on Iran. Some of those countries - Greece, Italy and Taiwan - actually got their imports, I think, pretty much down to zero. But the others - China, India, Japan, South Korea and Turkey - still have a way to go. So basically, what's happening this morning is Secretary of State Mike Pompeo is going to say, on May 2, the waivers will no longer exist, and you will face the potential of U.S. sanctions if you import Iranian oil.
GREENE: And is the expectation that this could have a big effect on Iran and, as always the goal in tough moves like this, to try and change the behavior of the regime?
SEVASTOPULO: Well, it's definitely going to have a greater impact on the Iranian economy, which is already suffering very hard under existing sanctions. So it's going to have more of an effect there. And one of the other questions, obviously, is whether it's going to impact oil prices in the global market.
GREENE: And to what extent could it do that? I mean, could we see, you know, a big spike in gas prices over the summer?
SEVASTOPULO: Well, a year ago, the Trump administration justified giving the waivers. It said, listen; oil markets are very tight right now. If we put the squeeze on, it could be bad for the U.S. economy. Well, oil prices are actually reasonably high right now, as well. They hit a high of $74 in Asia trading overnight, which is not far from where they were a year ago. What the administration here is counting on is that Saudi Arabia and the United Arab Emirates will actually step in and provide output to make up for the shortfall from putting - Iranian output.
Now, whether it can do that or not will obviously be the test. They say - I talked to an official last night who said that they've arranged that. But you know, these things can fall through. So I think that's got to be the real test.
GREENE: And briefly, why now? Why is the administration doing this now?
SEVASTOPULO: Well, they say that - their logic, they say, is that it's not conducive to do this because oil prices aren't as tight as they were a year ago. But there are a number of people who would doubt that. I think it's also partly that it's just - there is a gradual push to keep ramping up the rhetoric on Iran to try and change the behavior of the regime in Tehran.
GREENE: Demetri Sevastopulo is the Washington bureau chief for the Financial Times, joining us this morning. Thanks for your time, Demetri.
SEVASTOPULO: Thank you.
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