When President Donald Trump’s sanctions hit Iran’s oil exports next month, the country will not just scramble to find alternative revenues to provide an 80m-strong population with medicine and other vital commodities. Tehran is also keen to make sure the president of the country they call the “Great Satan” fails in his goal to shut down Iran’s main economic lifeline, Financial Times reports.
“Trump must and will definitely suffer an embarrassing failure by not being able to bring down Iran’s oil exports to zero. We will achieve this even if [we have] to barter crude for Russian weapons or store our crude in Malaysia and Thailand,” said a senior energy businessman close to the Iranian regime.
Iran, which derives a large part of its foreign currencies and state revenues from oil exports, is seeking creative ways to sell its oil ahead of the reimposition of US sanctions on November 4. At stake are Iran’s hopes of maintaining some leverage in negotiations with the Trump administration. Insiders believe any talks with Washington could only happen once Iran has shown it can withstand the new sanctions and, as a result, not have its hands tied at the negotiating table.
Plans under consideration to circumvent the sanctions include an initiative to revive “middlemen” who would be allowed to buy barrels of crude through a domestic energy exchange, or “bourse,” and sell them in world markets under the guise of Iran’s “private sector.” Established in 2012, the bourse has not traded oil since at least 2015, when Iran agreed to curb its nuclear ambitions in exchange for the lifting of crippling international sanctions.
The measure is a sign of how desperate the regime is to maintain even the smallest amount of oil exports. Babak Zanjani , a local businessman, is facing a death sentence for refusing to pay back $2.8bn worth of crude he sold to Asian buyers and never paid back the state under the previous sanctions era.
“Selling crude through the energy bourse is more symbolic to show that Iran is diversifying channels to sell crude and its determination to circumvent sanctions,” said Saeed Laylaz, a reform-minded analyst of Iran’s political economy. “In practice, however, anyone who cannot buy crude from the National Iranian Oil Company would not buy it from those affiliated to the armed forces, either, unless Iran decides to create other Zanjanis.”
The punitive measures against OPEC’s third-largest oil producer are expected to be more harshly felt than a first wave of economic sanctions imposed in the wake of Trump’s decision in May to withdraw from the 2015 Iranian nuclear accord. Iran’s ability to more than double its oil exports following the Vienna agreement helped the Islamic republic drag itself out of a deep recession and rein in 40 per cent inflation, FT adds.
Also, according to the New York Times, of all the issues dividing Europe and the Trump administration, Iran has become the sharpest, with the Europeans actively working against United States policy, placing them in league with Russia, China and Iran.
The leading countries of Europe are looking to set up an alternative payment mechanism that would sidestep the American-dominated banking system, and Washington’s new sanctions. As they do so, they are pressing Iran to adhere strictly to the terms of the nuclear agreement, to avoid giving the United States and Israel a pretext for starting a war — an increasing concern.
And they are counseling Tehran to keep calm and wait out President Trump’s term, in the hope that he will not be re-elected, the Times notes.