“Royal Dutch Shell Plc said Wednesday it has stopped selling gasoline to Iran, the latest company to cease business with a country that is increasingly targeted by U.S.-encouraged sanctions..... Reports say the Dutch-Swiss traders Vitol Holding BV and Trafigura also have halted sales to Iran, as has Glencore International AG, another Swiss-based commodities trader…...”

“Royal Dutch Shell and Ingersoll-Rand this week became the latest major corporations to announce they would cease or cut back business operations in Iran.The announcements came as the United States and its European allies stepped up their efforts to win a tough new round of United Nations sanctions aimed at pressing Iran to rein in its nuclear program....……...”

“An "official source" quoted by the official SPA news agency said reports that Riyadh said it was willing to use its influence to get Beijing to support U.N. sanctions aimed at convincing Iran to halt its atomic program were false. "This issue is not true, it was not discussed during the visit of the secretary of defense who was in the kingdom recently," the unidentified source was cited as saying…….”

Clearly the Obama administration sees the petroleum sector as the ‘ultimate’ way to go to squeeze Iran. There are other targeted financial ways. But the petroleum squeeze is the one that can do more harm faster, as is the case in every OPEC country. Still, using broad blockades and sanctions will also squeeze the people quickly. With the long borders of Iran, ironically almost every mile/kilometer of them under some degree of American control, gasoline will be smuggled in. But it will be at higher costs, and much of the benefit may go to certain groups.
A complete oil boycott of petroleum exports is highly unlikely: obviously the UN Security will never agree to it. So Iran will export a little less oil, but at somewhat higher new prices forced by tightened supplies (and by some higher costs). In exchange, they will import somewhat less refined products at higher prices than they would normally, mainly because some countries may go along a gasoline boycott, complicating supply routes.
Given the abilities they have shown for innovation under pressure, the Iranians probably will speed up the development of alternative energy sources. They have already announced a new electric car. In the long run it will have the effect of developing new technologies and domestic industries, ironically (I like using this word today) making Iran even more independent and more industrialized than her neighbors.
Still, people will get squeezed, and by next parliamentary and municipal elections they may be ready to dump the conservatives, if they are given the chance.
Cheers
mhg

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