US Imposes Sanctions on Iran, Without Cause; Grants Exemptions to 8 Allies
November 4, 2018 Amanda Cooper / Reuters & Parisa Hafezi / Reuters
Nearly 40 years after the 1979 Islamic revolution saw the exit of Western oil companies from Iran, the Iranian oil sector faces yet another costly disruption from US-imposed sanctions. The US granted eight countries waivers from the sanctions. Though the EU were not awarded waivers, they stated they intend to ignore Washington's groundless economic powerplay and keep buying Iran's oil. But there are no waivers for the people of Iran, who will suffer immensely from this latest US act of economic aggression.
US Reimposes Sanctions Against Iran Iranians brace for more economic struggles Jason Ditz / AntiWar.com
"All the prices are going higher every day . . .
I cannot imagine what will happen after (Nov. 4).
I am scared. I am worried. I am desperate.
I cannot even buy rice to feed my children or pay my rent."
-- Elementary school teacher Pejman Sarafnejad, 43, a father of three
(November 2, 2018) -- The end of business on Friday marked the end of the six-month period between the US withdrawing from the P5+1 nuclear deal and the withdrawal being finalized. As of Monday, the US will be reimposing all sanctions against Iran that they'd previously been required by treaty to ease.
The US intention is to put all international sanctions back exactly as they were before the nuclear deal was signed. Since Iran is still party to the deal, as is most of the rest of the world, many nations do not intend to comply with US demands.
Still, Iran's economy has been struggling already, with the anticipation of sanctions gravely damaging the currency. This has many ordinary Iranians fearing that their economic struggles are about to get worse, while Iran's government, as throughout the sanctions, is in a better position to weather the storm.
That's roughly the stance Iran's Foreign Ministry is taking. On Friday they issued a statement saying they have "no concerns" and are confident that they'll be able to manage their economic affairs irrespective of the US sanctions. . . .
While the Trump Administration had been insisting for months that they did not intend to grant any waivers for anyone to continue trade with Iran, they have been forced to revise that with Monday's re-imposition. Both Turkey and Iraq reportedly have been granted sanctions.
Iraqi officials are reporting a significant sanction, which includes allowing them to continue buying food from Iran, as well as natural gas and other energy supplies. The only condition is that Iraq not pay the Iranians in US dollars.
Turkey got their own waiver, in this case specifically on oil. They are one of eight jurisdictions that the US is "temporarily" allowing to continue importing Iranian oil. The others are China, India, South Korea, Italy, Japan, and the United Arab Emirates, along with Taiwan. Though the EU did not get waivers as a whole, they've made clear they intend to keep buying from Iran.
Indeed, it's unclear how the US decided which countries would get waivers and which wouldn't. That India and China did is particularly significant, as both had already indicated they'd defy US threats even if they didn't get waivers.
Iranian officials say this underscores what a bad idea the new sanctions are, as the oil waivers show that the world's economy continues to need access to Iranian crude oil, and even the US cannot afford to see it withdrawn from the market.
LONDON (November 2, 2018) -- Nearly 40 years after the 1979 Islamic revolution saw the exit of Western oil companies from Iran, the Iranian oil sector faces yet another costly disruption after a series of interruptions from war, sanctions and diplomatic isolation.
Washington will reapply sanctions to Iran's oil sector on Nov. 4, after ending its participation in an international deal governing Iran's nuclear sector. Iran's oil buyers outside the United States will stop or reduce purchases because of secondary sanctions applied on foreign companies that use the US banking system.
Having lifted a self-imposed revolutionary ban on foreign investors in 1995, Iran has struggled to attract external investment for any sustained period.
The isolation caused by poor relations with the United States and, in recent years, Tehran's efforts to develop a nuclear capability have prevented Iran building output capacity. But huge reserves run by the National Iranian Oil Co have helped it cling to its position as one of the world's five largest oil producers.
The United States stopped buying Iranian oil or investing in Iran's oil industry in 1979 and has not resumed since.
Iran produces nearly 4 percent of the world's daily oil supply and over the last 30 years has exported on average two-thirds of that. [Iran's crude oil exports from 1975-2018: tmsnrt.rs/2CUMBnT]
The mid-1970s were the heyday of the Iranian oil sector, when its output accounted for 10 percent of global production. It has never returned to the record 6 million barrels per day (bpd) it pumped in 1974.
In that year it pumped 70 percent of the amount produced by OPEC's biggest producer, its regional political rival Saudi Arabia, and more than three times as much as its neighbor Iraq.
In 2012, when a first round of international nuclear sanctions was imposed, Iran's output was only a third of Saudi Arabia's, rising to 41 percent last year and just a little higher than Iraq's.
Output dropped to a low of 1.5 million bpd in 1980, the year after Shah Mohammed Reza was overthrown, an event that caused the second oil shock across the economies of the West.
It took 23 years for Iran to restore 4 million bpd in 2003, with a post-revolutionary peak last year just short of 5 million bpd of crude and condensate combined.
Iran's exports halved during the depths of the 2012-2016 international sanctions on its nuclear program. [Iran's crude oil exports and production: tmsnrt.rs/2CRTM0h]
It is unclear what proportion of Iranian crude sales will vanish from international markets after Nov. 4. The United States said on Friday it would temporarily spare from sanctions eight jurisdictions that import Iranian oil. The European Union would not be one of the eight, US Secretary of State Mike Pompeo said.
This isn't Iran's first round of sanctions. It has devised ways to export oil under the radar, evading detection by switching off the transponders of its fleet of nearly 40 supertankers, using alternatives to the US dollar for payment, or selling crude to private refiners, in small, harder-to-track parcels . . . . Struggling to Cope,
Iranians Fear more Misery from US Sanctions Parisa Hafezi, Tuqa Khalid / Reuters
DUBAI (November 2, 2018) -- Iranians fear an even more painful squeeze on living costs after additional US sanctions take effect on Monday, from businesses struggling to buy raw materials to the sick and elderly unable to afford life-saving medicines.
The United States will reapply curbs to the country's vital petroleum and banking sectors on Monday in an effort to rein in its arch foe's nuclear, missile and regional activities. Iran's clerical rulers have played down the US move, but many ordinary Iranians appear apprehensive.
"All the prices are going higher every day . . . I cannot imagine what will happen after 13 Aban (Nov. 4). I am scared. I am worried. I am desperate," said elementary school teacher Pejman Sarafnejad, 43, a father of three in Tehran. "I cannot even buy rice to feed my children or pay my rent."
The daily struggle to make ends meet has been getting harder for months: The economy was battered by the reimposition of a first raft of US curbs in August after Washington's pullout from a nuclear deal between Tehran and global powers in May.
Foreign businesses of all types, ranging from oil companies, trading houses to shipping, have stopped doing business with Iran for fear of incurring US penalties.
A Tehran Grand bazaar grocery shop owner said: "I am very nervous because already there is shortage of some goods in the market and the rial has lost so much value. "What will happen after the reimposition of new sanctions?"
Iran's leadership says Tehran will not succumb to pressure to halt its missile programs or to change its regional policy.
Yet while some Iranians back their leaders' defiance, others are fearful that the economy, weakened by years of sanctions, mismanagement and corruption, may collapse when the US puts more pressure on the world's Number 3 crude exporter.
"Statements by government officials that . . . the sanctions (will) have no impact are political slogans," said Washington-based lawyer Farhad Alavi, who focuses on US trade regulation and sanctions.
"The fact is that these restrictions significantly increase transaction costs for Iranians."
Since the reimposition of the first round of curbs in August, prices of bread, cooking oil and other staples have soared and the rial national currency has fallen sharply.
Rice, one of the staples of Iran's diet, has more than tripled in price since last year because of the rial's fall.
Ordinary Iranians fear cuts in Iran's oil sales could be the ultimate hammer blow to the economy, since energy exports are still the country's main source of earnings.
Iranian leaders hope sanctions waivers granted to eight buyers of Iranian crude, combined with rising oil prices, will compensate for a reduction oil export volumes.
But even without the new measures due on Monday, Iranian businessmen have been finding it harder to cope.
Some 70 percent of small factories, businesses and workshops have already started to shut down in the past months due to lack of raw materials and hard currency, according to Iranian media.
LIFE GROWS HARDER
"I had to close my business. Those European companies that were racing to ink a deal with me last year, now refuse to return my calls," said a businessman in Tehran, who declined to be named.
Mohammad Reza Sadoughi says ordinary people will bear the brunt of the sanctions, in terms of medicines for the sick such as cancer patients and food shortages and currency problems.
"My father has cancer, and with sanctions, the cancer-treatment medicine that his life depends on will only be available in the black market for a higher price," said the 38-year-old government employee in the northern city of Sari.
The US sanctions permits trade in humanitarian goods such as food and pharmaceuticals. Yet measures imposed on banks and trade restrictions will make life hard for Iranian patients.
"At the end of the day, it's the Iranian people with their aspiration to lead a good life who are suffering due to lack of good sense from their own regime who are not ready to compromise with the world power (US)," said Dubai-based businessman Aftab Hasan, a member of the Iranian Business Council in Dubai.
However analysts say that economic grievances are unlikely to revive anti-government unrest such as the demonstrations in December that turned into anti-government rallies.
"I don't care about politics. I don't care who is responsible for our problems. I don't want a regime change. I just want to live peacefully with my family in my country," said housewife Fariba Shakouri, 51, in the central city of Yazd.
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