Trump Administration reimposes sanctions on Iran
US sanctions on Iran officially resumed on Monday, November 5, 2018, three years after being lifted by the Obama administration as part of the 2015 Iran nuclear deal. The sanctions came back into full effect Monday morning, bringing crippling economic burdens on Iran’s oil, banking, shipping, and other sectors. U.S. sanctions which are aimed at more than 700 Iranian entities and individuals are expected to have dire consequences on the country’s economy.
The U.S. penalties will hit foreign countries and companies that do business with the targeted Iranian entities, including its national oil company, its banks, and its shipping industry. However, the Trump administration announced on Friday that it was exempting eight countries from bruising sanctions that the United States was reimposing against Iran. Mike Pompeo, the secretary of state, did not identify the eight countries that were being granted six-month waivers, but a senior official confirmed that they include India, South Korea, Japan and China — among the world’s largest importers of Iranian oil.
According to the State Department’s special representative for Iran, the U.S. has asked Saudi Arabia to increase its production of oil while the US works to take off Iranian oil from the market. That will help prevent a global spike in the price of oil, which would essentially be helping Iran. The Trump administration’s strategy – relying on Saudi Arabia to squeeze Iran – illustrates why the White House has responded carefully to the murder of Jamal Khashoggi, a Washington Post columnist who was killed inside the Saudi consulate in Turkey.
Since the United States ended the nuclear deal, Iran’s currency, the Rial, has lost more than two-thirds of its value, according to officials and experts, the country’s oil exports have plunged to 1.5 million barrels daily, from 2.5 million barrels. Analysts with Oxford Economics say they expect the sanctions to send Iran’s economy into recession, predicting it will contract by 3.7 percent next year, “the worst performance in six years.” Oil and crude exports form the backbone of Iran’s economy and represent the primary source of revenue and foreign currency for the government.
Most big European companies have left Iran in recent months ahead of the looming penalties, but European diplomats vowed on Friday to continue efforts to protect legitimate trade with Tehran which remains a part of the nuclear accord, that was brokered in 2015 along with the United States, Britain, France, Germany, Russia, and China. International inspectors have concluded that Tehran is complying with the agreement by not developing nuclear weapons, and European officials have said that the deal is crucial to their national security. On the other hand, The United States seeks to force Tehran to end what the United States perceives as “Iran’s destabilizing activities in the Middle East”, such as supporting Hezbollah in Lebanon, Hamas in Gaza and the Houthi rebels in Yemen.
It is unclear whether the economic hardships inflicted on the Islamic Republic would coerce the Iranian leadership into the negotiation table, but Iranian leaders have insisted they have no intention of rewarding Trump’s decision to leave the nuclear accord by acceding to his demands or even opening a dialogue.