Everyone Loses In an Economic War

The economic wars against Iran and Venezuela have been senseless and destructive from the start.

Emma Ashford warns Biden that the U.S. stands to gain nothing from his trip to Saudi Arabia. She makes some other suggestions for what the U.S. should do instead:

And it could consider softening sanctions on Venezuela, which could help to ease pressure on markets over the longer term.

Finally, resolving the standoff over re-entering the Iran nuclear deal, leading to lifting of sanctions against the Tehran government, would drop as much as a million barrels of oil a day onto world markets, with the prospect for more as Iranian production ramps back up.

The French government is reportedly thinking along similar lines. According to Reuters reports today, Macron told Biden at the G7 summit this week that the Saudis and the UAE will not be able to increase oil production significantly, and a French official called for finding ways to bring Iranian and Venezuelan oil back on the market. The Biden administration should heed what the French are telling him, but I doubt that he will.

The economic wars against Iran and Venezuela have been senseless and destructive from the start, and now the cost of keeping broad sanctions on two major oil producers is being felt everywhere. Ending the “maximum pressure” sanctions on both countries is the right thing to do for ordinary Venezuelans and Iranians, it would facilitate the revival of the nuclear deal, and it would also have the added benefit of bringing down global energy prices and helping to curb inflation. It would do more for American interests than currying favor with the assorted despots that will be gathering in Jeddah next month, and it would alleviate humanitarian crises that have been made much worse by Washington’s policies of collective punishment.