Iran: Consequences of U.S. Sanctions
By Shahriar Kia
Earlier this year, U.S. President Donald Trump announced that the United States would be exiting the 2015 nuclear deal and that the crippling economic sanctions on Iran would be re-instated.
In May, the first round of sanctions took effect, targeting Iran’s gold and precious metal trade and its automotive and airline industry. Before these sanctions even took effect, Trump’s announcement alone had consequences. Many countries pulled out of business deals with Iran and others cut ties completely, not wanting to get caught in the crosshairs of U.S. sanctions.
The reinstating of pre-deal sanctions has been tough on Iran. When Obama lifted the sanctions when the nuclear deal was agreed, the Iranian regime suddenly had access to $150 billion in overseas assets that had been frozen.
At the beginning of the week, the sanctions on Iran’s oil and banking sectors took effect and the consequences, as intended by Trump, will be a major blow. There will be major pressure and scrutiny of banks, oil exporters, shipping companies and financial institutions. The Trump administration has said that anyone trying to circumvent or violate the sanctions will be targeted.
The Trump administration has made it very clear that its intent is to cut the regime off from the resources that allow it to finance terrorism and carry out malign acts across the Middle East and beyond. Secretary of State Mike Pompeo said last week that the sanctions are to deprive the regime of “revenues that it uses to spread death and destruction around the world”. He reiterated: “Our ultimate aim is to compel Iran to permanently abandon its well-documented outlaw activities and behave as a normal country.”
The U.S. wants all trading partners to reduce their imports of Iranian oil to zero, but there has not been enough time to make this happen. A handful of countries have been given waivers for now and a maximum six-month period to find other sources. The Secretary of State said that some of the jurisdictions have already reduced their imports significantly while the others are taking steps to reach this goal.
It is estimated that the regime has missed out on approximately $2billion since the sanctions were announced and implemented. Washington has reiterated that the people of Iran are not the targets of this maximum pressure campaign, as the regime has claimed. The target is the Iranian regime and those that it funds including the Lebanese Hezbollah, the Houthi rebels in Yemen and its Shiite militias across the region.
The Iranian regime has tried to portray a strong image and much fighting talk has been heard. Bahram Qasemi, a spokesperson for the country’s foreign ministry, said that Iran is able to manage its own economic affairs. “America will not be able to carry out any measure against our great and brave nation. We have the knowledge and the capability to manage the country’s economic affairs.”
The regime is also under intense domestic pressure as the people are continuing to take to the streets in a loud call for regime change. They will be the force for change in Iran and coupled with the pressure from the U.S., this change may come sooner rather than later.