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News: International

U.S. Economic Sanctions Having Intended Effect on Iranian Economy

U.S. Economic Sanctions Having Intended Effect on Iranian Economy

By Mahmoud Hakamian

U.S. President Donald Trump pulled out of the 2015 Iran nuclear deal, or Joint Comprehensive Plan of Action (JCPoA) as it is formally known, in 2018. He explained last year that his reasons for doing so were numerous. He pointed to Iran’s continued belligerence and meddling in the affairs of other nations in the Middle East. He also pointed to the Iranian regime’s complete disregard of human rights and its violent and brutal suppression of the people.

Trump also explained that the aim of the nuclear deal had not been met because instead of curbing the Iran nuclear threat, the deal just guarantees a regional nuclear race.

The U.S. President made it clear that he would be open to negotiating with Iran, only if it was able to adhere to the conditions that his Secretary of State Mike Pompeo had set out. And the recent failure of the U.S. and North Korea to come to an agreement during the Vietnam summit solidifies the message – Trump will not give any concessions.

When the United States pulled out of the nuclear agreement, the State Department also announced that it would be expecting all countries to reduce their imports of Iran oil to zero. Although it initially said that no waivers would be granted, a handful of countries – the biggest exporters of Iranian oil – did indeed benefit from exemptions.

However, these waivers were heavily conditioned on a systematic reduction over time. And the State Department is not easing up on its stance.

The aim of the sanctions is to put Iran under immense economic pressure and to stop it plundering the nation’s wealth on malign acts and terrorism. The strategy is proving to be somewhat effective already because Iran’s oil income has significantly dropped.

Trade between Iran and the European Union significantly dropped in the last 6 months of 2018. The European Commission’s latest official figures show that in 2018, the 28 member countries exported €8.9 billion worth of goods to Iran. This represents around 17 per cent less than the previous year. Furthermore, the EU’s imports from Iran declined by 4 per cent over the same period.

Oil represent the biggest portion of Iran’s exports to the EU member states. Starting in the middle of 2018, most EU clients stopped purchasing Iranian oil. The EU’s exports to Iran also dropped in November and December 2018. Later in the year, the EU saw its exports to Iran drop.

China was Iran’s biggest oil importer and most valuable trade partner, but towards the end of last year trade significantly decreased as the Chinese made it clear that it would not mess with U.S. sanctions. Iranian officials recently paid a visit to China to encourage further trade relations, but the Chinese appeared hesitant and reluctant.

the people of Iran welcome the pressure that the United States is applying on the regime because they know that it will accelerate the regime’s collapse. Their ultimate goal.

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