U.S. Urges Allies to Join Iran Embargo
The Reagan Administration urged the world’s major industrialized countries Tuesday to join the United States in a trade embargo against Iran, although officials conceded that it will be nearly impossible to enforce a ban on importation of Iranian oil.
“We will be urging our OECD allies to take similar measures against Iran,” State Department spokesman Charles Redman said, referring to the Organization for Economic Cooperation and Development, a grouping of 24 non-Communist industrialized nations.
Redman said the only response received so far was from France, which has asked French oil companies to stop buying Iranian petroleum. The U.S. embargo, which mostly affects crude oil, also bans most American exports to Iran and prohibits imports of Iranian goods such as Persian rugs and pistachio nuts.
‘A Moral Stand’
Energy Secretary John S. Herrington said the U.S. embargo, announced Monday by President Reagan, is “a moral stand” that will be ineffective unless other nations join the action. In any case, he said, enforcement will be difficult.
Herrington said the ownership of a cargo of oil frequently changes hands six or seven times while a tanker is on the high seas, often making it virtually impossible to determine the origin of the oil.
Once the oil reaches the international spot market, Herrington and other officials said, it becomes part of an overall pool that cannot be traced. Some officials argued against an oil embargo because they believe it will be ineffective.
Also, if the United States acts alone, Iran could expect to sell its oil to other countries, though possibly at somewhat lower prices. Herrington said he expects Iran to combat the embargo by cutting prices.
Full Impact Unknown
“I don’t fully know the impact of that,” he said.
However, U.S. officials said, if all major nations agree to ban Iranian oil, the impact will be far greater. Under a global ban, the Tehran regime would not have ready buyers to make up for sales lost to the United States. Officials believe that Iran would have to reduce its prices so much to attract customers that it would seriously erode its profits.
Herrington said the U.S. Customs Service will attempt to prevent U.S. oil firms from importing Iranian oil. But he said the effectiveness of the embargo “is directly dependent on the cooperation we get from our allies.”
The U.S. embargo will not prohibit U.S. oil companies from buying Iranian oil for use outside the United States, Herrington said. He said the Administration has not even asked U.S. firms to eliminate Iranian oil voluntarily from their overseas operations, though “I would hope the companies would join the United States and its allies” in the worldwide boycott.
Oil Imports Soar
The United States imported 90,000 barrels of Iranian oil daily in 1986. But sales soared this year, reaching 620,000 barrels daily in July, an increase that Herrington attributed to Iranian price-cutting.
“Last summer, to keep the revenues pouring in for the war, Iran had some of the most competitive prices,” he said.
The energy secretary said U.S. officials overlooked the sharp increase in Iranian imports for months because “we were not focusing on where it (the oil) was coming from.”
In an effort to reinforce the reasons for the embargo, the State Department issued a 16-page “white paper” accusing Iran of supporting terrorism throughout the Middle East and beyond.
“The government of Iran regards terrorism as an integral tool of its foreign policy, to be used when the opportunity seems propitious,” the report said. It listed 56 terrorist incidents during the last seven years that it described as a partial but illustrative list of Iranian activities. Most of the attacks were carried out by pro-Iranian front groups.
“Iran recruits disgruntled Shia (Muslims) from the gulf states and elsewhere, gives them paramilitary and terrorist training and returns them home,” the report said.
