Executing foreign policy choices will always incur costs along with hoped-for benefits. But willfully ignoring how US economic statecraft toward Iran and China might have unintended consequences in the Middle East creates dangerous blind spots for national security.
There are two current key misunderstandings in the effects of US foreign economic policy on the Middle East, which National Security Council senior director for the Middle East Victoria Coates elaborated on in her remarks at the Atlantic Council on June 6. The first misunderstanding is about the relation between US sanctions on Iran’s oil exports and subsequent opportunities for American energy. The second is about US trade policy toward China and the ripple effects on global markets, including the Middle East.
First, the Trump administration is heralding US energy production, particularly shale production and liquefied natural gas exports, as both domestic energy independence and a growing source of export revenue. Unfortunately, there is not a clear understanding of how the impositions of sanctions on Iran’s oil exports may or may not increase export opportunity for US energy.
Coates first suggested that Iran’s decreased exports to China would create opportunity for the United States. This is not necessarily true. While Iranian oil exports have declined sharply to China, so has American oil. Analysts at Standard Chartered find that China’s imports from the United States have averaged 35,000 barrels per day for the year through April, a fall of 89.6% compared to 2018. China imported no US oil in January and March, and April’s imports of 117,000 barrels per day were the first above 100,000 barrels per day since late 2018.