Bitter medicine for Iranian consumers as sanctions kick in

War of words between US and Iran set to intensify

The reimposition of US sanctions against Iran on Monday has ushered in what is likely to be a protracted period of heated rhetoric and standoff, as the Trump Administration threatens more pressure and Tehran warns that it can ramp up its nuclear programme again, Middle East experts say.

In a preview of the war of words that is likely to escalate, Iranian President Hassan Rouhani vowed to continue selling oil in defiance of the sanctions. As state television aired footage of military forces staging war exercises yesterday, Rouhani said the country is in an “economic war situation”. “We will proudly break the sanctions,” Rouhani said during a meeting of government officials in the Iranian capital.

In Washington, US Secretary of State Mike Pompeo said: “The Iranian regime has a choice. It can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble.”

It will take many weeks or months before the effectiveness of the Administration’s maximum-pressure campaign against Iran can be judged. But what already is clear is that the renewed sanctions will be greeted by threats hurled between Washington and Tehran as the two governments grow more confrontational.

“We should look at today as the first day of an escalating maximum-pressure campaign, not a new status quo,” said Richard Goldberg, an adviser at the Foundation for Defence of Democracies. “We’re going to see an enormous amount of pressure brought to bear on the regime, to the point where it may have to consider negotiating with the Trump Administration or the regime will collapse.”

The sanctioning of hundreds of Iranian individuals, companies and organisations was the final result of President Donald Trump’s decision in May to withdraw from the nuclear deal, known officially as the Joint Comprehensive Plan of Action (JCPOA).

The sanctions target Iranian oil, banks and shipping companies. But many prominent banks and companies were left off the list of more than 700 names, as well as entire sectors like mining and computer sciences, suggesting a strategic decision to hold back some names for future sanctions.

Eight nations were given temporary waivers, including Iran’s two

biggest oil customers, China and India. Turkey, which buys natural gas from Iran, also was exempted from sanctions. Waivers also were given to projects under way at three nuclear power plants related to impeding Iran’s ability to reverse course and restart its nuclear programme.

US officials say their goal is to force the Iranian Government to stop its support of militants in the region and, eventually, renegotiate the nuclear agreement forged by the Obama Administration.

But it is uncertain whether Iran would bend to American will under another round of pressure, or whether it can afford to simply wait until there is a new US president.

Patrick Clawson, an Iran expert at the Washington Institute for Near

East Policy, said he met Iranians at a recent conference in Moscow whom he described as confident they could ride out the sanctions.

Kelsey Davenport, director of nonproliferation policy for the Arms Control Association, said there is danger of the US overreacting to Iranian rhetoric.

Iran “will continue to remind the international community that if the deal collapses or it no longer benefits Iran, it can ramp up its nuclear activity”, she said. “It’s critical to distinguish between the rhetoric and steps that actually violate the deal.”

It is unclear whether the reimposed sanctions, which are opposed by all but a handful of countries in the world, will signal the end of the nuclear deal.

Britain, France, Russia, China and Germany, which all negotiated alongside the US, insist they want to keep it going.

Iran has said it could walk away and resume its nuclear programme, a step few expect Tehran to take.

The European Union is attempting to devise an alternative “special purpose vehicle” to continue trade with Iran, but it has had trouble finding a country willing to host it.

Even the Europeans, who consider the nuclear deal essential to their national security, may be softening their support after Danish officials accused Iran of trying to assassinate an Arab separatist leader living in Denmark.

Iran has denied the claims.