While Iran has claimed that its nuclear program is for peaceful purposes only, the United States, the European Union, and Israel believe that the country is pursuing nuclear weapons capabilities. Based on this assumption, the U.S. Senate agreed on Friday to augment the economic sanctions placed on Iran, with senators voting 94-0 to add the new proposal to the annual defense policy bill.
According to Bloomberg, the new sanctions were designed to target Iran’s main sources of revenue and to prevent the country from circumventing trade restrictions by buying gold. While previous sanctions have already banned trade with Iran by any U.S. business or individual, the new proposal will also impose penalties on other nations that trade with the country.
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
So far, the current sanctions have weakened Iran’s currency because oil exports have declined significantly; as U.S. Energy Department data shows, exports fell by 1 million barrels per day last month.
For Democratic Senator Robert Menendez, who co-authored the proposal along with Republican Senator Mark Kirk and Independent Senator Joseph Lieberman, the sanctions are seen as a powerful weapon. “We must be clear to the Iranians that toughing it out and waiting it out is not an option, that it will only get worse,” he told Reuters.
But former Persian Gulf CIA analyst Paul Pillar said the sanctions will not be effective unless they are accompanied by diplomacy. As Reuters reported, “the leadership in Iran is unlikely to make concessions on the nuclear issue if it expects sanctions to continue until the regime falls.” However the bill is far from finished. The House of Representatives has approved its version of the bill, but both houses of Congress must approve the finalized version before it is signed into law by President Obama.
Investing Insights: Will Halliburton’s Stock Outperform Against Industry Headwinds?