NEW YORK ( TheStreet) -- Those old enough may recall the immortal words of Gomer Pyle: Surprise, surprise, surprise. As I wrote in several previous articles, the only impact of oil restrictions placed on Iran is higher costs for Europeans. Fortunately, Washington's foolishness won't likely impact West Texas Intermediate prices. All of Brussels and Washington's actions play right into the hands of China.
Even Japan, one of our strongest allies, has received a "waiver" to ignore the European Union ban and doesn't face banking or any other repercussions for importing Iranian oil. Insuring the oil while on the high seas hasn't proven as problematic as many have suggested either. Japan's parliament recently voted to use the backing of the Japanese government to insure the oil, problem solved.
South Korea appears ready to halt imports; however, halting imports is not based on a desire to help punish Iran, but lack of insurance availability. It's especially ironic that South Korea is otherwise willing to work with Iran given the friendly relationship between Iran and North Korea. If South Korea is willing purchase from Iran and they have as much or more than any European country to lose, why is this ban moving forward?
Up to now, seven countries, including India have received "waivers" from the U.S. to import oil from Iran. India is the second most populated country in the world and is expected to pass China. This whole circus act would be funny if real tax dollars didn't go toward paying the salaries of the many bureaucrats spending time on this issue.(USO), the market is pricing in zero or possibly less of a premium based on the upcoming sanctions. In U.S. dollars oil is not only oversold technically, it's selling near the lows of 2012. USO is about $2 above the 52-week low also.