The stricter sanctions imposed on Iran on Nov. 4, 2018 are showing signs of inflicting real pain on Iran. Coupled with those sanctions re-imposed on Aug. 4, 2018, Iran’s daily exports of oil have dropped from 2.4 million barrels per day to in April 2018 to only 1.1 million in November. And its non-oil exports are down from $4.3 billion in October to $1.9 in December.
The huge cuts in exports are hitting government revenues hard. About half of Iran’s budget is funded by oil and natural gas revenues.
Not only is the world no longer buying Iranian products, but the sanctions on banking and insurance have put a huge dent in the country’s ability to ship out its oil production.
The European Council on Foreign Relations reports that “lack of access to adequate insurance has increased the risk of shipping. Most tanker owners are either unwilling to rent their tankers for shipping Iranian oil cargoes or are demanding high leasing premiums.”
The Iranian rial has lost a quarter of its value against the dollar in recent months, coming on top of a drop from a drop in its value from 12,000 to the dollar in 2012 to 36,000 in 2013. Now the rial trades at 42,000 to the dollar, sending food and other prices in Iran soaring.
Despite years of being warned that without European cooperation the sanctions would not work, the U.S. go-it-alone strategy is bearing great fruit. Global European companies like Siemens (Germany), Royal Dutch Shell (Netherlands), and Total (France) have curbed or canceled plans to expand into Iran due to the sanctions even though their own governments have refused to reimpose the Iranian sanctions.
Will the sanctions impel regime change? Who knows?
Will they hamper Iran’s ability to spread its sphere of influence over the Middle East? Likely.
Will they stop Iran from producing nuclear weapons? That remains to be seen.
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