Sanc­tions have no ef­fect on Iran: Rouhani

US grants Iraq 45-day waiver over Iran sanc­tions to im­port gas, elec­tric­ity

Kuwait Times - - Business -

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

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