Sanctions have no effect on Iran: Rouhani
US grants Iraq 45-day waiver over Iran sanctions to import gas, electricity
DUBAI: Iranian President Hassan Rouhani said yesterday that US sanctions announced last week have had no effect on Iran’s economy because Washington had already practically reimposed them earlier.
The restoration of sanctions is part of a wider effort by US President Donald Trump to force Iran to curb its nuclear and missile programs as well as its support for proxy forces in Yemen, Syria, Lebanon and other parts of the Middle East. “The sanctions have had no impact on our economy because America had already used all the weapons at its disposal and there was nothing new to use against us,” Rouhani said in remarks carried live on state television. “They just issued a long list of banks, their branches ... and airlines and their planes. And this shows that they are merely trying to affect the Iranian nation psychologically,” Rouhani said.
The United States said it would temporarily allow eight importers to keep buying Iranian oil when it reimposed sanctions last Monday aimed at forcing Tehran to curb its nuclear, missile and regional activities. “It has now become clear that America cannot cut Iran’s oil exports to zero,” Rouhani added, speaking after a weekly meeting with the heads of the parliament and the judiciary.
Iraq can continue to import natural gas and energy supplies from Iran for a period of 45 days, the United States has said, several days after reimposing sanctions on Tehran’s oil sector.
“The United States has given Iraq a temporary relief from the sanctions for 45 days to continue purchasing natural gas and electricity from Iran,” the US Embassy in Iraq said in a video published on its official Facebook page on Thursday.
“This relief gives Iraq time to start taking steps towards energy independence,” the video said. Iraq central bank officials said in August that the country’s economy is so closely linked to Iran that Baghdad would ask Washington for exemptions from some of the sanctions. The current temporary waiver is conditional on Iraq not paying Iran for imports in US dollars.
Sanctions, which had been lifted under a 2015 nuclear deal negotiated by President Barack Obama’s administration and five other world powers, were reimposed on Nov 5. They cover 50 Iranian banks and subsidiaries and more than 200 persons and vessels in its shipping sector, as well as targeting Tehran’s national airline, Iran Air, and more than 65 of its aircraft.
Iran is likely to ride out the storm from US oil sanctions, suffering recession but no economic meltdown, thanks to rising crude prices and deepening divisions between the United States and other major powers, officials and analysts say. “Iran’s situation is better than pre-2016 because of high oil prices and the fact that the US is isolated this time,” said a European diplomat who asked not to be further identified. Iran emerged in early 2016 from years of global sanctions under a deal with world powers that curbed its disputed nuclear programme. But President Donald Trump withdrew the United States from the deal in May, calling it flawed to Iran’s advantage, and reimposed far-reaching US sanctions in phases, with the most damaging oil and banking penalties taking effect on Nov 5.
Trump aims to force Washington’s longtime adversary to accept tougher restrictions on its nuclear activity, drop its ballistic missile program and scale back support for militant proxies in Middle East conflicts from Yemen to Syria. But the broadly united front of world powers that enforced sanctions on Iran previously, pushing Iran into nuclear restraint, has unravelled since Trump took office and clashed with allies over everything from trade to collective security.
The other signatories to the nuclear deal - Germany, France, Britain, the European Union, Russia and China have condemned Trump’s walkout from the pact. The EU is preparing a special mechanism to enable payments for Iranian oil and other exports without US dollars, possibly through a barter system.
“It will be a difficult period but Iran’s economy will withstand it for various reasons,” a second diplomat said, “including (the fact of) Russia being under (US and EU)sanctions, Saudi Arabia having its own financial and political issues, and (trade war) between China and the United States.”
Big power disunity and EU moves to circumvent Trump’s sanctions regime have given Tehran a psychological boost - but not dissuaded foreign businesses ranging from oil majors to trading houses and shipping concerns from pulling out of Iran for fear of incurring new U.S. penalties. Still, while the US clampdown will probably trigger recession in Iran next year, economic meltdown should be avoided, with a reduced but still significant volume of oil exports continuing, a Fitch solutions analyst said. “Tehran is still likely to see a substantial share of its foreign exchange earnings maintained,” Andrine Skjelland told Reuters. “This will enable Tehran to continue subsidising imports of selected basic goods, keeping the costs of these down and thus limiting inflation to some extent.” — Reuters