Iranian oil exports fell by about 300,000 barrels per day in March, according to Foreign Reports, a leading industry newsletter. The reason for this export decline is the refusal of some longtime customers to purchase as much Iranian crude, due to U.S.-led sanctions, and Iran’s inability to find alternate buyers. Countries that are cutting back imports of Iranian crude include Turkey, Japan, Philippines, Taiwan, Malaysia, India and Turkey, according to Foreign Reports. Additional reductions are likely this summer, as new European Union sanctions take effect.

Another potential chokepoint for Iran is the insurance market. The EU will decide next month whether to ban its financial companies from offering reinsurance on Iranian cargoes after July 1. This insurance cutoff would be “the most draconian feature” of European sanctions, according to Nat Kern, editor of Foreign Reports, because international tankers would probably refuse Iranian cargoes unless the risk could be pooled through reinsurance syndicates, nearly all of which are in Europe.

Adding to the insurance squeeze, a major Chinese insurance provider, known as China P & I Club, said last week that it, too, would stop indemnifying tankers carrying Iranian oil, according to a Reuters report from Singapore.

Iran faces a sharp loss of revenues even if some exports get through the sanctions net. That’s because Iran will have to offer discounts to get customers to purchase its crude in the face of coordinated U.S., European and Asian cutbacks.

To limit the market impact of the loss of Iranian oil, Saudi Arabia has promised to increase production to its 12.5 million barrel peak capacity. The Saudis have pledged, specifically, to supply any needed oil to China, a decisive swing vote when it comes to sanctions.

Ali Naimi, the Saudi oil minister, sought to counter industry skepticism that the kingdom could meet this promise when he said at a March 20 press briefing: “Trust Saudi Aramco. If you ask them to deliver 12.5 million barrels, they will deliver 12.5.” He said the Saudis could “immediately” add this surge production, which would be about three million barrels over their normal level.

The potentially decisive Saudi role was highlighted in a recent interview given by Ali Akbar Hashemi Rafsanjani, the pragmatic former president of Iran who was reappointed last month as chairman of an oversight body in Tehran known as the Expediency Council. “If we had good relations with Saudi Arabia, would the West have been able to impose sanctions?” Ransajani asked in the interview with a Tehran magazine called International Studies Journal, which was cited by Foreign Reports. “Only Saudi Arabia could fill the void left by Iran.”

Rafsanjani, whose reappointment some analysts see as a sign the Iranians are preparing for serious talks with the West, also offered an iconoclastic view of bargaining with the “Great Satan.” He asked: “What is the difference between Europe and America, China and America or Russia and America? If we are negotiating with them, then why shouldn’t we negotiate with America?”

Economic sanctions are often regarded as an ineffective weapon, because they are usually evaded by producers and consumers alike, and rarely have the “crippling” effect that has been advertised. But with the Iranian sanctions, the bite may actually be worse than the bark. That’s because in a globalized economy, decisions taken at the financial hubs in America, Europe and Japan can move instantaneously along the world’s financial nervous system to the most distant nodes.

This global net appears to be closing around Iran as negotiations over its nuclear program are set to begin. The next few weeks will test whether the pressure is sufficient to change Iranian behavior.