US has vowed to end all sales of Iranian oil, the country's crucial export, as well as international banking transactions, snapping back sanctions lifted by Donald Trump's predecessor as US president.
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Washington: Six months after President Donald Trump bolted from a nuclear deal on Iran, the US from Monday will try to strangle the country's economy with sweeping sanctions, but doubts abound on how effective the campaign will be. The United States has vowed to end all sales of Iranian oil, the country's crucial export, as well as international banking transactions, snapping back sanctions lifted by Trump's predecessor as US president, Barack Obama. But much has changed since the Obama administration targeted Iran's economy in 2012. Obama won broad, if at times begrudging, international support as he set a goal of bringing Iran to the table to end its nuclear program.
Iran -- led by a more moderate president, Hassan Rouhani -- has according to UN inspectors abided by the 2015 agreement which is still supported by European powers and Russia and China, which all signed the nuclear deal. "This is not 2012 when the world was united behind sanctions against Iran. This is the Trump administration trying to force the rest of the world to go along with a policy that most countries do not accept," said Barbara Slavin, an Iran expert at the Washington-based Atlantic Council.
"The US has had some success in terms of frightening away major corporations. The sanctions hurt a lot. But Iran is still going to be able to sell oil," especially to China, she said. The United States has accepted that it will need to issue waivers to countries that do not fully stop buying Iranian oil, with friends of the United States such as India and South Korea looking for sanctions exemptions, and Tehran may keep up clandestine sales.
The European Union has gone so far as to protect businesses that operate in Iran. It has announced plans for a legal framework through which firms can skirt US sanctions, although few major corporations have been eager to risk the wrath of penalties in the world's largest economy. US Secretary of State Mike Pompeo has issued a list of demands for Iran that go well beyond the nuclear program that was the focus of Obama's deal.
He wants the Shiite clerical regime to withdraw from war-ravaged Syria, where it is a critical ally of President Bashar al-Assad, as well as to end longstanding support to regional militant movements Hezbollah and Hamas. Pompeo has also insisted Iran cut off backing for Yemen's Huthi rebels who are facing a US-backed air campaign led by Saudi Arabia. In a recent tweet Pompeo crowed that the International Monetary Fund is predicting a 3.6 per cent contraction of Iran's economy next year.
"That's what happens when the ruling regime steals from its people and invests in Assad -- instead of creating jobs for Iranians, they ruin the economy," he said. But experts see no rapid turnaround from Iran's leaders -- especially the military and clerical establishments, for whom resistance to the United States has been an article of faith since the 1979 Islamic revolution overthrew the pro-US shah. "It's basically magical thinking. The Iranians have been able to continue their support to regional proxies and allies for 40 years despite economic pressure," said Ali Vaez of the International Crisis Group.
He said the Trump administration believed that a constrained, struggling Iran would see its influence erode. But the final goal, he said, was unclear. "I think the end-game depends on who you're asking. The president himself is interested in having a broader, better deal with the Iranians, but I believe that most of his national security team are interested in either destabilising Iran or assuring a regime change in Tehran," Vaez said.
Trump's national security advisor, John Bolton, is a longstanding hawk with ties to Iran's armed, exiled opposition.
One European diplomat believed Trump was following his playbook on North Korea, with which he is negotiating only a year after threatening "fire and fury." "It's the same war plan as with Kim Jong Un and North Korea -- sanctions, maximum pressure and then ready to negotiate," he said. The United States says it is exempting humanitarian goods from the sanctions, although Europeans say they have received no guidance on how to avoid penalties. Another Western diplomat, speaking to AFP on condition of anonymity, said that Iran was more dependent on the outside world than the country's conservatives would like to think.
"In truth there are starts of a panic as there's beginning to be a shortage of medicine. We're heading back to the old war economy, which is tightly controlled." Complicating Trump's effort, Saudi Arabia -- Iran's regional rival which has long pressed Washington to get tough -- is increasingly unpopular after the murder of a journalist, Jamal Khashoggi, in the kingdom's Istanbul consulate. But Tehran has been winning few friends, with France and Denmark recently accusing the clerical state's intelligence agencies of plotting to attack Iranian opponents in Europe.
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