What Happened: The United States and Iran are negotiating a possible oil-for-food arrangement through Iraq, Saudi newspaper Arab News reported June 6, citing Iraqi officials. The volume would be small, but the specific quantity and buyer or buyers of Iranian oil remain unclear.
Why It Matters: Iran is now facing unprecedented sanctions and U.S. attempts to cut off its access to the hard currency needed to purchase food abroad, though food and other humanitarian goods are exempted from U.S. sanctions. An oil-for-food deal could alleviate concerns that a humanitarian and food crisis will strike Iran because of the sanctions. The plan could also be a U.S. attempt to induce Iran to continue reducing the hostilities that flared up last month.
Context: The United States used this approach before when it subjected Iraq to heavy sanctions, but as seen with the Oil-for-Food Programme for Iraq, it opens up avenues for significant corruption and sanctions circumvention. The United States would likely try to avoid problems by putting strict monitoring protocols in place. An oil-for-food program may be inevitable should sanctions on Iran — which imports roughly half of its food — be in place for an extended period. Were the United States not to back such a plan, the European Union might step in with one regardless.
- The U.S.-Iran Confrontation: How Did We Get Here? (May 15, 2019)
- The Suspected Sabotage of Oil Tankers Puts the Persian Gulf on High Alert (May 13, 2019)
- Iran Faces Bleak Options as the U.S. Turns the Screws (April 24, 2019)