US Oil Company Activities Under Economic Sanctions

April 07, 2000

Economic sanctions have restricted greatly the ability of oil companies, particularly US oil companies, to invest abroad and compete in the international arena. According to one estimate, about 40% of the world’s population is subject to United States sanctions. USA Engage Statement of Position, (visited May 22, 2000). Sanctions against Iran, Libya and Iraq in particular, stand as major obstacles as oil companies look to the Middle East for low-cost development in a time of unstable oil prices. The sanctions are intended to deprive these countries of their primary source of hard currency--oil export revenues.

During the time that sanctions against Iran, Libya and Iraq have been in place, there has been some evolution in their content and implementation. Recently, we have witnessed the suspension of UN sanctions against Libya, a UN resolution allowing Iraq to import more spare parts to repair its ailing export infrastructure, and the Clinton Administration’s trade liberalization with Iran permitting the import of luxury goods such as carpets and caviar and the export of food and medicine. Although further liberalization in US sanctions could occur this year, prospects for any major shift in US policies are marginal due to upcoming presidential and congressional elections.

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