The Obama administration expects a significant drop in foreign dealings with the Central Bank of Iran in the next two months.
U.S. officials launched a campaign to have countries that deal with Iran to comply with new sanctions as soon as President Obama signed them into law on Dec. 31, a senior administration official said Wednesday in a briefing for Israeli and Jewish media.
The sanctions in the law target third parties that deal with Iran’s financial and energy sectors; for years the United States has banned dealings by its own citizens with those sectors.
The sanctions on non-petroleum dealings with Iran’s financial sector kick in within 60 days of the signing, and the Obama administration expects “significant” changes by that time.
Sanctions on Iran’s energy sector are expected to have an effect within three months, the official said, reflecting the timelines for such sanctions written into the law.
Much of the effort has focused on persuading nations that deal with Iran to diversify their intake of oil from other suppliers, notably Saudi Arabia and Libya, or conversely on having those countries use the sanctions as leverage to force Iran to heavily discount its oil.
In the latter case, the countries would agree to backchannel deals with Iran to avert U.S. sanctions and demand a cut in price as compensation.
There are signs that China and India, both major purchasers of Iranian oil, already have responded, the official said. China has sought discounts from the Iranians and is seeking to diversify its intake, as is India, the official said.
The overall goal of the sanctions is to cut income to Iran. The official said the Obama administration has calculated that the sanctions will not affect U.S. gasoline prices.