How US sanctions will hit Iran

Iranian protesters voice their opposition to the US on the 39th anniversary of the storming of the US embassy in Tehran. The country’s plunging currency has left the population counting the cost of sanctions. (AFP)
Updated 05 November 2018
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How US sanctions will hit Iran

  • The US withdrawal from the nuclear deal has already had a huge effect, including the devaluing of the Iranian rial and oil exports falling by about a million barrels a day
  • The impact of the sanctions was felt early on, with their announcement in May driving many companies to abandon Iran, causing the value of its currency to plummet

DUBAI: While Iran braces for a new set of sanctions on Monday that will target its oil, shipping, energy and banking sectors, US measures have already taken a heavy toll on the Islamic republic.
As part of the new sanctions, the US Treasury Department will add more than 700 names to its list of blocked entities as of Nov. 5, with the US working closely with countries to cut off Iranian oil exports as much as possible.
The State Department said on Friday it has closed the “Obama-era condensate loophole,” which allowed countries to continue importing the byproducts of oil and natural gas from Iran even while sanctions were in place.
“This loophole allowed millions of dollars to continue to flow to the regime,” said Secretary of State Mike Pompeo. “These sanctions hit at the core areas of Iran’s economy, and they are necessary to spur changes we seek on the part of the regime. The maximum pressure we imposed has caused the rial to drop dramatically, the country’s Cabinet is in disarray, and the Iranian people are raising their voices even louder against a corrupt and hypocritical regime.”
The impact of the sanctions was felt early on, with their announcement in May driving many companies to abandon Iran, causing the value of its currency to plummet.


“The impact will be severe, and we see it in the acute economic situation in Iran today,” said Riad Kahwaji, founder and CEO of the Institute for Near East and Gulf Military Analysis in Dubai. “They will definitely have a gradual escalating impact on economic conditions and, subsequently, on the relations between Iran and the US. The main objective from the US side is to force Iran to accept most — if not all — of its 12 conditions and demands.”
Kahwaji said the sanctions’ primary objective is to get Iran to return to negotiations and agree to a new treaty, whereby it would restrict its ballistic missile program and remove the so-called sunset clause for its nuclear program. That would entail banning Iran from returning to enrichment activities.
“The current restrictions will become permanent, including (elements) related to what the US calls Iran’s behavior in the region,” he said. “So the ultimate objective is to pressure Iran to get back to the table of negotiations as per the terms of US President Donald Trump’s administration.”
It is believed that the new sanctions will compel Tehran to renegotiate the Joint Comprehensive Plan of Action (JCPOA). Experts say Trump believes the last deal was the worst ever struck by the US.
“The sanctions will force Iran’s hand as Mike Pompeo argued that at the rate that the Iranian economy is declining, and protests are intensifying, it should be clear to the Iranian leadership that negotiations are the best way forward,” said Dr. Albadr Al-Shateri, politics professor at the National Defense College in Abu Dhabi.
“However, if history is any guide, the Iranian regime will (complain) but try to approach the administration in back channels. The purpose of this secretive communication is to give the impression of Iran’s willingness to compromise and thus prevent the further deterioration of the relationship with the US lest the Iran hawks in Washington push for military action.”
He said that, in parallel, Iran will look more defiant in the public eye, with the potential of the Islamic republic dragging negotiations out for a couple of years.
“(It might) give few concessions in regional crisis points like Syria and Yemen, and hope for a regime change in Washington,” he said. “Perhaps a democratic administration will be more susceptible to a new deal that will reaffirm the JCPOA with a different nomenclature. The new sanctions might prove to be costly if the Kingdom of Saudi Arabia, with spare production capacity, is unable or unwilling to put more oil in the market.”
Al-Shateri said the expected increase in oil prices might offset Iran’s loss of oil exports because of the US sanctions. “Moreover, the US attempt to cut off Iran from the international financial system, SWIFT, might also spur the Europeans and others, who are against the US withdrawal, to find a different financial system to circumvent the dollar exchange,” he said. “That may spell the beginning of the end of the dollar hegemony.”
Controversy arose when the sanctions were announced in terms of Iran’s access to the SWIFT financial system and its potential to bypass the sanctions through it. “SWIFT is no different than any other entity, and we have advised SWIFT the Treasury will aggressively use its authorities as necessary to continue intense economic pressure on the Iranian regime,” said Steven Mnuchin, US Secretary of the Treasury.
“SWIFT (will) be subject to US sanctions if it provides financial messaging services to certain designated Iranian financial institutions. We have also advised SWIFT that it must disconnect any Iranian financial institution that we designate as soon as technologically feasible to avoid sanctions exposure.”
Humanitarian transactions to non-designated entities will be allowed to use the SWIFT messaging system as they have done before, but banks were warned to be cautious that these are not disguised transactions, or they could be subject to certain sanctions.
“The list of banks, which will be substantially longer than last time, will be coming out (in the coming days),” he said. “And as it relates to monitoring transactions, financial institutions have liability for any transactions that go through SWIFT or any other mechanisms. It’s our expectation that will be implemented as soon as technologically feasible.”
The Iranian public is also expected to be affected by the economic sanctions.
“On the domestic front, there will be a major impact on Iran’s ability to fund,” Kahwaji said. “It will be (faced with) a choice — whether to continue giving priority to its international operations serving its expansionist schemes or use whatever cash it has to ease the internal situation and serve the public. We will have to wait and see how the Iranians try to manage the situation in government, but it’s not going to be easy as the situation will worsen by the day.”
He described the sanctions as the “strongest tool” the US holds, before resorting to military means, to pressure the Iranian regime to adhere to its demands.
“Essentially the sanctions that were taken off are snapping back,” said Katherine Bauer, the Blumenstein-Katz Family Fellow at the Washington Institute. “Over this 180-day wind-down period, what we have seen is firms and financial institutions have reacted very quickly; likely they had plans on the shelf as there was a snap-back scenario.”
The US withdrawal from the nuclear deal has already had a huge effect, including the devaluing of the Iranian rial and oil exports falling by about a million barrels a day. “This is a substantial drop,” she said, adding that the ultimate goal was to deprive the regime of revenue it gets from oil.
Experts predict oil exports will drop further in the near future. “There is a clear loss of revenue coming from a significantly reduced sale of oil,” said former ambassador Dennis Ross, a counselor and William Davidson Distinguished Fellow at the Washington Institute for Near East Policy. “We have also seen the decline of the rial. For the Iranian public, they have seen their bank accounts affected as a result.”
While the International Monetary Fund had projected Iran’s economy to reflect a 4 percent growth next year, he said it has now updated its projection to an estimated 3.6 percent decline. “There are real pressures in play and Iran is certainly going to be feeling those pressures,” he said.
“We know that the Iranians developed all sort of techniques to avoid the sanctions in the past, and we are likely to see this again. Oil exports, for example, are bound to be leaked through Iraq, and potentially through Afghanistan and Turkey.”


No injuries or pollution after explosion at oil tanker off Libya, says operator

Updated 3 sec ago
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No injuries or pollution after explosion at oil tanker off Libya, says operator

ATHENS: An oil tanker carrying about 1 million barrels of crude oil suffered an explosion off Libya on June 27 but no injuries or pollution were reported, a spokesperson for the operator TMS Tankers said on Monday.
The Marshall Islands-flagged tanker Vilamoura had left Libya’s Zuetina port and was en route to Gibraltar when there was an explosion in the engine room, the operator said.
The vessel is now being towed to Greece where it is expected to arrive by July 2, it added.


Israel FM says Golan to ‘remain part of’ Israel in any Syria peace deal

Updated 18 min 34 sec ago
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Israel FM says Golan to ‘remain part of’ Israel in any Syria peace deal

  • Golan Heights “will remain part of” Israel under any potential peace agreement with Syria, Israel's FM says

JERUSALEM: Israel’s Foreign Minister Gideon Saar said Monday that the occupied Golan Heights “will remain part of” Israel under any potential peace agreement with Syria.
“In any peace agreement, the Golan will remain part of the State of Israel,” Saar told a news conference in Jerusalem, referring to the territory Israel seized from Syria in 1967 and later annexed in a move not recognized by the United Nations.
 


Iranian Ambassador: Saudi Arabia Played Key Role in Preventing Escalation

Updated 56 min 34 sec ago
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Iranian Ambassador: Saudi Arabia Played Key Role in Preventing Escalation

Nearly two years after Iran and Saudi Arabia restored diplomatic relations, Iran’s Ambassador to the Kingdom, Dr. Alireza Enayati, praised Riyadh’s role in reducing tensions and fostering dialogue.

Speaking to Asharq Al-Awsat, Enayati described the progress as “equivalent to achievements that typically take years,” underscoring what he called the “deep roots and substance” of the relationship.

Enayati, who first served in Saudi Arabia as Iran’s consul in Jeddah in 1990 and later as chargé d’affaires in Riyadh, returned in 2023 as ambassador following the March agreement brokered by China to resume ties after seven years of rupture.

Commenting on recent Israeli strikes against Iran, Enayati called the attacks “blatant aggression,” noting that they took place while Tehran was engaged in indirect negotiations with Washington.

“Iran was attacked in the middle of the night, while people slept in their homes. It was our legitimate right under the UN Charter to respond decisively and demonstrate that while Iran does not seek war, it will defend itself with strength and resolve,” he said.

He emphasized that regional reactions to the escalation highlighted a spirit of solidarity.

“The first call our Foreign Minister received was from Saudi Foreign Minister Prince Faisal bin Farhan, condemning the attacks, followed by a statement from the Saudi Foreign Ministry,” he noted. “These positions were crowned by a phone call from His Royal Highness Crown Prince Mohammed bin Salman to President Pezeshkian, expressing condemnation and solidarity, followed by President Pezeshkian’s call back to the Crown Prince and statements of support from several Gulf states.”

Enayati commended Riyadh’s efforts to de-escalate the crisis, describing Saudi Arabia’s role as “honorable” and “blessed.” He added, “In all our bilateral discussions, Iran has acknowledged the Kingdom’s constructive stance and its efforts to prevent further aggression. We welcome any role by our Saudi brothers, especially His Royal Highness Prince Mohammed, who has always stood by us.”

The ambassador pointed to the revival of travel and religious exchange as a sign of rapprochement. “This year alone, over 200,000 Iranians have performed Umrah, and when including Hajj pilgrims, the number exceeds 400,000 visitors to the Kingdom - an extremely positive indicator,” he said.

Enayati also highlighted the recent visit of Saudi Defense Minister Prince Khalid bin Salman to Tehran, describing it as a “historic turning point” that shifted relations from routine to strategic. “The visit and the meetings with President Pezeshkian and the Supreme Leader left a strong impression that we are partners in building regional stability,” he said.

While acknowledging significant progress, Enayati stressed that economic and trade relations still require more effort. “We have agreements on trade, investment, culture, and youth reaffirmed in the Beijing accord,” he said, adding that talks are under way on agreements to avoid double taxation, promote mutual investment, and develop overland transport corridors linking Saudi Arabia and its neighbors to Central Asia.

Responding to criticism that Iran plays a destabilizing role, Enayati said: “We are not outsiders imposing our presence. We are part of the region, its people, and its culture. Differences in political perspectives do not erase our shared bonds. Dialogue is the only path forward, and there is no substitute.”

He concluded by emphasizing that genuine regional security must be anchored in development and economic cooperation rather than military competition. “When security moves beyond weapons and geopolitics to focus on prosperity and shared progress, everyone benefits,” he said.


Israelis attack soldiers in occupied West Bank

Updated 30 June 2025
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Israelis attack soldiers in occupied West Bank

  • Violence has escalated in the West Bank since the start of the Gaza war

JERUSALEM: Israeli civilians assaulted security forces and vandalized military vehicles and a security installation outside an army base overnight in the occupied West Bank, the military said on Monday.

According to Israeli media, settlers targeted the commander of the Binyamin Regional Brigade base in the central West Bank, calling him a “traitor.”

The officer was among troops attacked on Friday night as they tried to stop settlers entering a closed military zone near the Palestinian village of Kafr Malik. Six civilians were arrested following the clashes.

“Dozens of Israeli civilians gathered at the entrance” of the brigade’s base on Sunday evening, the military said in a statement Monday.

“The gathering became violent and some of the civilians at the scene attacked the security forces, sprayed pepper spray at them, and vandalized military vehicles,” it added.

“The IDF (military), police, and border guards intervened to disperse the gathering,” the statement added, noting one Israeli citizen was injured in the confrontation.

In another statement a few hours later, the army said that “Israeli civilians set fire to and vandalized a security site containing systems that contribute to thwarting terrorist attacks” near the base.

Israeli Foreign Minister Gideon Saar strongly condemned “any violence against the IDF and security forces.”

“Such events are unacceptable, and offenders must be severely punished,” he wrote on X.

“The IDF and security forces work day and night to protect the citizens of Israel and ensure its security. We must support them, not hinder their activities, and under no circumstances attack them,” he added.

Bezalel Smotrich, Israel’s far-right finance minister, a staunch supporter of the settlements who calls for the annexation of the West Bank, also condemned the violence against security forces and the destruction of property, saying a “red line” had been crossed.

In a post on X, he urged the police to investigate the incident and bring those responsible to justice.

Several human rights NGOs have denounced the rise in violence committed by settlers in the West Bank and their perceived impunity.

Violence has escalated in the West Bank since the start of the Gaza war, triggered by the attack by the Palestinian Islamist movement Hamas on Israel on October 7, 2023.


Sudan refugees face deepening hunger as funds dry up: UN

Updated 30 June 2025
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Sudan refugees face deepening hunger as funds dry up: UN

  • The WFP warned support to Sudanese refugees in Egypt, Ethiopia, Libya and the Central African Republic “may grind to a halt in the coming months as resources run dry"

KHARTOUM: Millions of people displaced by the war in Sudan are at risk of falling deeper into crisis as funding for food aid dwindles, the UN’s World Food Programme warned Monday.
Since April 2023, war between the Sudanese army and paramilitary Rapid Support Forces has created the world’s largest displacement crisis, with more than 10 million people displaced inside the country.
Another four million have fled across borders, mainly to Chad, Egypt and South Sudan.
“This is a full-blown regional crisis that’s playing out in countries that already have extreme levels of food insecurity and high levels of conflict,” said Shaun Hughes, WFP’s emergency coordinator for the Sudan regional crisis.
The United Nations says its humanitarian response plan for Sudan — also the world’s largest hunger crisis — is only 14.4 percent funded.
A UN conference in Spain this week aims to rally international donors, following deep funding shortfalls that have affected relief operations globally.
The WFP warned support to Sudanese refugees in Egypt, Ethiopia, Libya and the Central African Republic “may grind to a halt in the coming months as resources run dry.”
In Egypt, which hosts around 1.5 million people who fled Sudan, food aid for 85,000 refugees — 36 percent of those previously supported — had already been cut.
Without new funding, the WFP warned, all assistance to the most vulnerable refugees would be suspended by August.
In Chad, where more than 850,000 people have fled but find little help in overwhelmed camps, the WFP said food rations would be reduced even further.
Around 1,000 refugees continue to arrive in Chad each day from Sudan’s western Darfur region, where famine has already been declared and displacement camps regularly come under attack.
“Refugees from Sudan are fleeing for their lives and yet are being met with more hunger, despair, and limited resources on the other side of the border,” said Hughes.
“Food assistance is a lifeline for vulnerable refugee families with nowhere else to turn.”
Inside Sudan, more than eight million people are estimated to be on the brink of famine, with nearly 25 million suffering dire food insecurity.