Iranians brace for harder times as US oil sanctions close in

The White House announced yesterday it was calling an end to six-month waivers that had exempted several countries from unilateral US sanctions on Iranian oil exports. (AFP)
Updated 24 April 2019

Iranians brace for harder times as US oil sanctions close in

  • When the 2015 nuclear deal was struck, hopes were high that it would end the country’s years of crippling economic isolation
  • Hopes were shattered when President Donald Trump withdrew the US from the accord last year and reimposed sanctions

TEHRAN: Iranians, already hard hit by punishing US economic sanctions, are bracing for more pain after Washington abolished waivers for some countries which had allowed them to buy oil from Iran.
“In the end the pressure (America) is putting out is on the people,” said a 28-year-old technical instructor in Iran.
“Some have crumbled, and those still standing will probably give up when things worsen,” he added, asking not to be named.
In 2015 when Iran struck a landmark nuclear deal with world powers, hopes were high that it would end the country’s years of crippling economic isolation.
Thousands even flooded the streets of the capital, Tehran, to celebrate and hail Foreign Minister Mohammad Javad Zarif as he arrived back from tough negotiations in Vienna.
But those hopes were shattered when President Donald Trump withdrew the US from the accord last year and reimposed sanctions.
Pressure has piled up ever since, with Washington saying Monday it would sanction all countries that buy Iranian oil, in a move meant to squeeze Iran’s main source of revenue down to zero.
Iran’s economy has been battered. Inflation has shot up, the country’s currency has plummeted and imports are now vastly more expensive.
“The country’s revenues will naturally reduce and maybe the rial will drop further,” the instructor told AFP.
Analysts have put Iran’s oil exports in March at around 1.9 million barrels a day, while the Central Bank had forecast revenue from oil sales in 2019 at around $10.57 billion.
Many of the country’s woes pre-date Trump and the sanctions, however, as it has struggled with a troubled banking system, a stifled private sector and the lack of foreign investment.

Yet life continues at Tehran’s Tajrish Bazaar, located north of the city.
On Tuesday people thronged the tight alleyways, drawn in by the tantalising smells of fresh vegetables and fruit as stall-owners shouted out prices, haggled with customers and hurriedly packed their goods.
But other parts of the bazaar selling non-essential goods such as pots, perfume and clothing were noticeably less busy.
“Have sanctions affected me? Which rock have you been hiding under all these years?” asked one irritated stall-owner, keeping an eye out for potential customers among the window-shoppers.
A 55-year-old housewife agreed.
“We have a limited wage, you see. (When sanctions came back) we were forced to spend what was meant for food and meat on the rent that went up,” she said.
Most people questioned by AFP asked to remain anonymous, and complained bitterly about inflation, saying they were especially pressured by growing housing and food prices.
According to the Statistical Center of Iran, overall inflation for the Iranian month of Farvardin (March 21-April 20) rose to 51.4 percent compared to the same month last year.
Food and services prices shot up by by 85 and 37 percent respectively over the same month.
This has caused “the class gap to really widen. There is only rich and poor now, nothing is left in between,” said the housewife.
“It will get worse. As ordinary citizens, we already expect prices to rise further” if oil exports reach zero, she added.
Iranians have also been forced to cut back on traveling, a tradition during the Nowruz, the Iranian new year which started on March 21, as prices grew out of many people’s reach.
“The situation is shocking,” the head of Tehran’s travel agencies association, Amir Pooyan Rafishad recently told ISNA news agency.
“Demand for trips, whether abroad or in Iran has dropped significantly.”

For Zarif, the US move to sanction Iran’s oil sales is another instance of what the Islamic Republic has repeatedly called “economic terrorism.”
“Escalating #EconomicTERRORISM against Iranians exposes panic & desperation of US regime,” he wrote Tuesday on Twitter.
The foreign ministry denounced the sanctions as “illegal” and said Iran was in “constant talks with its international partners including the Europeans.”
Russia on Tuesday called the US tightening of sanctions an “aggressive and reckless” policy.
Other major sources of income for the Iranian economy are minerals, about $8 billion annually, and agricultural exports, at about $5 billion — but it also imports large quantities of both, offsetting much of that income.
Oil Minister Bijan Namdar Zanganeh, however, has said he believes the US will not be able to block Iran from selling its oil.
“America’s dream for bringing Iran’s oil exports to zero will not be realized,” he told lawmakers on Tuesday, ISNA reported.
“America and its allies have made a big mistake by politicizing oil and using it as a weapon,” he added. “Given the market’s circumstances, (it) will backfire on many.”


Resumed cargo flights: Thaw in Israel-Turkey ties?

Updated 25 May 2020

Resumed cargo flights: Thaw in Israel-Turkey ties?

  • Ankara’s involvement in Syria’s Idlib province against the Tehran-backed Assad regime has recently provided a common denominator for Turkey and Israel to reconcile
  • Israel’s treatment of the Palestinians remains a major irritant in relations with Ankara – Recep Tayyip Erdogan on Sunday reiterated his support for the Palestinians

ISTANBUL: Israeli airline El Al has resumed cargo flights twice weekly between Tel Aviv and Istanbul for the first time in 10 years — a sign that decade-long bilateral tensions might be easing.
A cargo flight landed in Istanbul on Sunday morning to pick up humanitarian aid and protective equipment destined for US medical teams fighting COVID-19.
Burhanettin Duran, head of the Ankara-based think tank SETA, wrote that Turkey’s regional empowerment is “obliging Israel to search for normalization steps with Ankara.”
Dr. Nimrod Goren, head of the Israeli Institute for Regional Foreign Policies, said the cargo flight is a positive and visible development in bilateral relations that was probably approved by top government officials on both sides and required diplomatic efforts.
“However, the fact that this step takes place in parallel to a discussion about Israeli annexation in the West Bank, and to criticism of annexation by regional and international actors, might impact how it’s viewed in Turkey,” he told Arab News.
Goren said while the Israeli and Turkish governments continue to have significant policy differences, they should work to restore their relations to ambassadorial level, and to relaunch a strategic dialogue on regional developments of mutual interest.
“The forming of a new Israeli government, and the appointment of Gabi Ashkenazi as a new foreign minister, could be an opportunity to do so, and the cargo flight brings some positive momentum,” he added.
Turkey expelled Israel’s ambassador in May 2018 after the US moved its embassy from Tel Aviv to Jerusalem.
Ankara’s involvement in Syria’s Idlib province against the Tehran-backed Assad regime has recently provided a common denominator for Turkey and Israel to reconcile, as it also serves the latter’s strategic interests in weakening the Iranian presence in Syria.
But Israel’s treatment of the Palestinians remains a major irritant in relations with Ankara. Turkish President Recep Tayyip Erdogan on Sunday reiterated his support for the Palestinians. 
In a video message on Twitter, he said the issue of Jerusalem “is a red line for all Muslims worldwide.”
He added that Israel’s “new occupation and annexation project … disrespects Palestine’s sovereignty and international law.”
Ryan Bohl, Middle East analyst at geopolitical-risk firm Stratfor, told Arab News: “Turkey is trying to create economic ties with Israel because … Erdogan is finding the political ground changed, caused in part by demographic changes as young Turks are less incensed by the Palestinian issue, and in part by a general weariness among Turks about putting too much skin in the game to solve the Palestinian question,” 
Israel is expected to annex large parts of the occupied West Bank on July 1 under the terms of a coalition government agreement. Ankara has strongly criticized the plan.
Israeli and Turkish officials are rumored to have held talks behind closed doors to reach a deal on maritime borders and exclusive economic zones in the eastern Mediterranean. 
Israel’s Foreign Ministry recently said it was “proud of our diplomatic relations with Turkey.”
But Goren said it is currently unlikely that Israel will advance a maritime demarcation deal with Turkey as it would shake several regional balances at the same time.
“It will put in jeopardy, and run in contrast to, the important alliances in the eastern Mediterranean that Israel has fostered in recent years with Greece, Cyprus and Egypt,” he added.