Friday 19th Jul 2019 

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News: Iran Economy

Iran Regime Fails to Shift Oil via Exchange

Iran Regime Fails to Shift Oil via Exchange

By Shahriar Kia

Last year, the U.S. State Department announced that it would be expecting foreign countries to reduce their imports of Iranian oil to zero within a specified timeframe. Only a handful of countries – the biggest importers of Iranian oil – were granted waivers. This was a bold move by the United States because Iran’s oil revenues are huge and it is nothing less than a major blow to the Iranian regime.

However, the United States maintained that the purpose of this action is to cut the Iranian regime off from the huge revenues that it uses to finance terrorist activities and groups. The move have proven to be somewhat successful because reports indicate that the Lebanese Hezbollah group is dealing with huge cuts in funding.

The Iranian regime has tried to shrug off the effect of the U.S. action and a number of officials have pointed out that the regime has survived and got through tough periods of sanctions before.

Yet there are indications that all is not well. Foreign investors are naturally staying away from Iranian oil so the Iranian regime has turned to the Iranian Energy Exchange to see if it can offload quantities of oil to domestic buyers. It has been reported that Iran has tried to offer investors up to 6 million barrels of oil since the beginning of the year via the Energy Exchange, but it has only managed to do one deal. In a further blow, this one deal was for 35,000 barrels - the minimum amount.

The Deputy Head of the Iranian Association for Energy Economics, Morteza Behrouzifar, said that it was clear from the very start that selling oil was going to be “almost impossible”. He said: “Iran's crude is sanctioned and under no circumstances can anyone buy Iranian crude except those who were granted waivers.”

South Korea, China, Japan, Turkey and India were granted waivers which have served almost as a lifeline to the Iranian regime. It has at least brought in some revenue.

This is not the first time the regime has tried to sell oil on the exchange. It also made efforts back in 2011, but was not at all successful. Three years later it tried again and it was not able to sell more than 3,000 barrels.

The sanctions on the Iranian regime are tough and the Trump administration has re-iterated that it is subjecting Iran regime to a maximum pressure campaign. President Trump has taken the opposite approach to his predecessor, Barack Obama. Obama led policies of appeasement and promised that the Iranian regime would become more moderate with concessions! However, this approach was a complete failure and the regime became emboldened.

The people of Iran are the regime’s first victims and the longest suffering. Policies of appeasement do nothing to help the people and they have called on the international community via the opposition to pressure the regime. They are applying the domestic pressure on the mullahs but they must be backed up by the international community. It is time that the regime be held accountable for its belligerence.

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