US signals more sanctions pressure as Iran faces financial crisis

Iranian media and officials have remained largely silent on Washington’s decision to sanction companies and individuals for violating US sanctions by exporting petrochemicals.

In a clear move to pressure Iran over stalled nuclear talks, the Biden administration on Thursday sanctioned Chinese, Emirati and Iranian companies engaged in the illicit export of Iranian petrochemicals.

One of Iran’s deputy foreign ministers, Mehdi Seferi, said on a state television program on Thursday evening that Iran could always set up new businesses for oil and petrochemical trade.

But the United States did not mince words when announcing the sanctions, after 15 months of indirect talks with Iran to revive the 2015 nuclear deal.

“The Biden administration has been sincere and determined to pursue a path of meaningful diplomacy to achieve a mutual return to full implementation of the Joint Comprehensive Plan of Action (JCPOA). In the absence of a deal, we will continue to use our sanctions authorities to limit exports of oil, petroleum products and petrochemicals from Iran,” a statement by Secretary of State Antony Blinken said after the Treasury Department announced the sanctions.

The move marked the administration’s new policy toward Iran that had favored the non-implementation of tough sanctions imposed by former President Donald Trump as year-long talks unfolded in Vienna. But the end of formal negotiations in March left the Biden team’s strategy at an impasse as Iran pursued its nuclear program by enriching uranium to a higher level and building leverage.

At a time, The Wall Street Journal revealed Thursday that the United States had been secretly coordinating Israeli airstrikes against Iranian targets in Syria since the campaign began in 2017. Israel shared its plans ahead of most airstrikes, the WSJ quoted current and former US officials as saying. .

Deputy Foreign Minister Seferi, however, remained defiant, saying Iran had been under various sanctions for four decades and had its own means of self-sufficiency, exports and imports.

“The Americans are adding people to their sanctions list every day, but these sanctions will not be an obstacle to the sale of petrochemicals, and everything will continue as normal,” Seferi said.

In the real world, however, it is not easy for Iran to sustain the extra level of exports it has achieved since the Biden administration came to power. From a low of 250,000 barrels of crude oil sold per day in 2019, Iran’s exports reached almost a million barrels in early 2022. China was the main customer because it knew that Washington would not enforce not the sanctions as it aimed to reinstate the JCPOA. .

Now the United States is signaling that the rules of the game have changed and pressure will be put on third parties buying Iranian exports and those involved as middlemen.

Already, Iranian crude exports fell in May because of Russian competition, which offers cheaper oil to China.

Iran’s revenue from petroleum and petrochemical products was $23 billion from March 2021 to March 2022 and it aimed to increase it to $27 billion. The foreign currency generated competes with crude exports and is vital for Iran in the context of its current economic crisis.

Just this week, as the national currency fell to a historic low, the government ordered petrochemical exporters to sell their dollars on the local market to drive down the exchange rate. The effort had a modest impact and for the moment the Iranian rial has stabilized.

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