Country impacts of multilateral oil sanctions

In recent years, economic sanctions have become an important tool in the conduct of U.S. foreign policy. Though usually aimed at a single country, they also can affect the economies of other nations. Knowledge of such impacts would inform U.S. policy‐makers as to which other countries might be helped or harmed, and help predict which other nations likely would support or oppose the sanctions. This article presents results relating to the imposition of sanctions in the oil market. These results are obtained from exercising a dynamic computable general equilibrium model built by Charles River Associates under sponsorship of the American Petroleum Institute. The model is used to analyze GDP effects on a number of countries from multilateral oil sanctions against Iraq. The results suggest that it is possible to provide useful information regarding the impacts of sanctions as a foreign policy tool. However, they also indicate that sanctions can be expensive, with substantial spillover effects. Though sanctions may be an appropriate policy choice in given instances, these effects should be incorporated into foreign policy analyses.