Iran Furious After Obama Said To Extend Iran Sanctions; Oil Jumps To 2016 Highs

A furious Iran threatened to retaliate early Friday against a U.S. Senate vote to extend the Iran Sanctions Act (ISA) for 10 years, saying it violated last year's deal with six major powers that curbed its nuclear program.  The ISA was first adopted in 1996 to punish investments in Iran's energy industry and deter its alleged pursuit of nuclear weapons; it was due to expire on Dec. 31. Lawmakers said the extension would make it easier for sanctions to be reimposed if Iran violated the nuclear settlement. The extension was passed unanimously on Thursday.

While US officials said the ISA's renewal would not infringe on Obama's landmark nuclear agreement (which may or may not be voided by Trump), and under which Iran agreed to limit its sensitive atomic activity in return for the lifting of international financial sanctions that harmed its oil-based economy, senior Iranian officials took odds with that view. Iran's nuclear energy chief, Ali Akbar Salehi, who played a central role in reaching the nuclear deal, described the extension as a "clear violation" if implemented.

"We are closely monitoring developments," state TV quoted Salehi as saying. "If they implement the ISA, Iran will take action accordingly."

Iran's most powerful authority, the Supreme Leader Ayatollah Ali Khamenei, warned in November that an extension of U.S. sanction would be viewed in Tehran as a violation of the nuclear accord.

"Iran has shown its commitment to its international agreements, but we are also prepared for any possible scenario. We are ready to firmly protect the nation's rights under any circumstances," Foreign Ministry spokesman Bahram Ghasemi said in comments reported by state news agency IRNA.

The Senate's vote will have political consequences as well: the U.S. Senate vote was a blow to the more moderate and pragmatic Iranian President Hassan Rouhani, who engineered the diplomatic opening to the West that led to the nuclear deal, and may embolden his hardline rivals ahead of presidential election next year. Khamenei and his hardline loyalists, drawn from among Shi'ite Muslim clerics and Revolutionary Guards, have criticized the deal and blamed Rouhani for its failure to deliver swift improvements in living standards since the lifting of international sanctions in January.

It was not immediately clear what form any eventual retaliation for the U.S. Senate vote might take.

Influential Friday prayer leaders, appointed by Khamenei, strongly denounced the ISA extension and called on the government to take action, according to IRNA.

According to Reuters, Iranian lawmaker Akbar Ranjbarzadeh said Iran's parliament would convene on Sunday to discuss a bill obliging the government to "immediately halt implementation of the nuclear deal" if Obama approves the ISA, the Students News Agency ISNA reported. Another lawmaker quoted by the semi-official Tasnim news agency said Iran's parliament planned to discuss a bill that would prevent the government purchasing "American products".

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Until today, the White House had not pushed for an extension of the sanctions act, but had not raised serious objections. Congressional aides, cited by Reuters, said they expected President Barack Obama to sign the extension.

However, moments ago, the White House did opine, and according to a Reuters headline, Obama is expected to extend the Iran sactions, in effect not only jeopardizing his own Nuclear treaty...

  • WHITE HOUSE SAYS EXPECTS OBAMA TO SIGN BILL EXTENDING IRAN SANCTIONS

But potentially opening the way for the reimposition of oil sanctions on Iran. While it is unlikely that sanctions could return while Obama is still president, after the Trump inauguration it's a different matter entirely, as explained earlier this month in "Will Trump Send The Price Of Oil Soaring" by eliminating as much as 1 million in Iranian output from the world market.

To be sure, crude oil was certainly excited on the news, jumping to the highest price since July 2015.