Iran imports refined petroleum products

In the NYTimes today:
The Obama administration is talking with allies and Congress about the possibility of imposing an extreme economic sanction against Iran if it fails to respond to President Obama’s offer to negotiate on its nuclear program: cutting off the country’s imports of gasoline and other refined oil products.

The option of acting against companies around the world that supply Iran with 40 percent of its gasoline has been broached with European allies and Israel, officials from those countries said. Legislation that would give Mr. Obama that authority already has 71 sponsors in the Senate and similar legislation is expected to sail through the House.
The fact that Iran imports refined products like diesel and gasoline may come as a surprise to the general public, which sees Iran as an "oil producer" (in the Persian Gulf region which of course supplies "all of our oil") under "economic sanctions." Turns out refined products are exempt from the sanctions - at least until now.

However, given Iran's likely retaliation - they've threatened "cutting off oil exports and closing shipping traffic through the Strait of Hormuz, at a moment that the world economy is highly vulnerable" - these extreme sanctions seem too risky for the U.S. to actually push, which reduces their credibility as a threat and negotiating tool.

Update: FP Passport ponders whether the threat of nuclear Iran might convince China to join.
... Beijing surely sees the unacceptable danger in risking its existing Saudi oil supply for an as-yet nonexistent Iranian oil supply.
Right, but in light of the Strait of Hormuz chokehold, would Beijing be willing to risk short-term Saudi oil supply to "assure" long-term Saudi oil supply through sanctions which may or may not dissuade Iran from becoming a nuclear power?

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