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The Trump administration says today marks a new chapter in its efforts to drive Iran's oil sales down to zero. But it's unclear if it's going to really crack down on countries like China and India that buy the oil at the risk of jolting global markets. As NPR's Jackie Northam reports, ships of Iranian crude are still at sea.
JACKIE NORTHAM, BYLINE: For the past six months, the Trump administration allowed eight countries - including China, India and Turkey - to continue buying Iranian oil, despite U.S. sanctions. The Trump administration said those waivers would expire today, and now any country buying Iranian crude could be subject to sanctions.
ELIZABETH ROSENBERG: I do think the administration is serious in their threat to impose sanctions on anyone who continues to import Iranian oil.
NORTHAM: Elizabeth Rosenberg worked on sanctions at the Treasury Department during the Obama administration. She says some of the countries have been caught off guard. They'd hoped for an extension on importing Iranian oil, as they had been granted last November. Rosenberg says some countries, such as Japan and South Korea, have already drastically reduced Iranian imports, so reaching zero will not be too difficult.
ROSENBERG: However, I don't think it's possible that everyone who continues to import Iranian oil now will be able to go all the way to zero.
NORTHAM: Jim Burkhard, the head of oil market research at IHS Market, a global information and analytics firm, says just the nature of the oil business makes it difficult to immediately stop imports. Orders with Iran have been made, including some that have been rushed through in recent days. And ships laden with oil are already on their way to port. And, Burkhard says, some countries just aren't willing to cut off imports.
JIM BURKHARD: China is at the top of that list. India is another big buyer, although they may attempt to reduce imports from Iran to some degree.
NORTHAM: In the past, some countries have been able to skirt sanctions by bartering with Iran, using creative accounting techniques or holding payment in escrow. Burkhard says now, the administration needs to be careful as it decides what action to take against any country buying Iranian crude.
BURKHARD: In all of these countries, the U.S. has multidimensional interests. The Iranian oil issue is just one of them. So do you go with the full force of implementing these sanctions when there's so many other issues that the U.S. is concerned about in these countries, such as the overall U.S.-China trade relationship?
NORTHAM: Burkhard says there's a scramble now for oil purchasers in China and elsewhere to find alternative barrels in the market. The Trump administration said it will look to Saudi Arabia to fill the gap. But Jeff Schott, a senior fellow at the Peterson Institute of International Economics, says the Saudi crude might not be suitable in China, India and elsewhere.
JEFF SCHOTT: The Saudi light that the administration says will compensate for oil taken off the market by the Iran sanctions is not comparable to what the Iranian heavy oil that's being sold.
NORTHAM: Schott says he doesn't believe the administration will carry through with its threat not to grant more waivers. He says last November, the White House swore there would be no more exemptions, then changed its decision when gas prices started going up.
SCHOTT: Well, they're saying the same thing now, and the oil market reaction has been the same. Prices have gone up.
NORTHAM: Higher gas prices are something the Trump administration wants to avoid ahead of the 2020 elections.
Jackie Northam, NPR News, Washington. Transcript provided by NPR, Copyright NPR.