U.S. imposed sanctions on Iran’s oil industry will
“cripple” the
Middle Eastern country’s economy after they take effect in early November,
according to a new report released Wednesday.
Analysts
with Oxford Economics say they expect the sanctions to send Iran’s economy into
recession, predicting it will contract by 3.7 percent next year, “the worst
performance in six years.”
The
economic sanctions were originally lifted by the Iran nuclear deal negotiated
in 2015 during President Barack Obama's administration. President Donald Trump
withdrew from the pact in May, calling it inadequate and claiming it would not
prevent Iran from making nuclear weapons. He then followed up earlier this month
with his decision to reimpose economic sanctions on Iran.
"As
we continue applying maximum economic pressure on the Iranian regime, I remain
open to reaching a more comprehensive deal that addresses the full range of the
regime’s malign activities, including its ballistic missile program and its
support for terrorism," Trump said in announcing his actions.
The sanctions specifically targeting Iran’s oil industry take effect Nov. 4.
Oil and crude exports form the backbone of Iran’s economy and represents the
primary source of revenue and foreign currency for the government.
Authors
of the Oxford Economics report said it's unlikely any efforts by other world
powers can help Iran find a way to export oil.
“It
now looks like the impact will be worse than we initially thought as the other
signatories to the original deal have yet to spell out a clear strategy that
would allow them to circumvent U.S. sanctions and continue importing Iranian
oil,” wrote the report’s co-authors Mohamed Bardastani and Maya Senussi, who
are senior economists with Oxford Economics.
“While
deteriorating economic conditions will be painful for most Iranians, a real
domestic political challenge to the current regime and a genuine change in
its foreign policy (one of the main objectives of re-instating US
sanctions) are nevertheless unlikely as both reformers and conservatives are
united in defying the sanctions,” they added.
On
Tuesday, Iranian President Hassan Rouhani failed to convince parliament that
his plans will pull the country out of an economic nosedive worsened by
America’s withdrawal from the nuclear deal, further isolating his relatively
moderate administration amid nationwide anger.
For
only the second time in its history, parliament ordered a sitting president to
appear before it to answer questions, the last time coming amid widespread
discontent in 2011 over Western sanctions during the government of hard-line
President Mahmoud Ahmadinejad.
While
Rouhani warned that “painting a bleak picture of people’s lives will lead to
further darkness,” lawmakers voted four separate times to say they were
unconvinced of his answers about Iran’s recession, its cratering currency,
unemployment and smuggling. Those questions now could go to Iran’s judiciary
for further review, serving as a warning to the cleric his political stature is
slipping.
“We
have made mistakes,” Rouhani acknowledged at one point.
Associated Press reporter Nasser Karimi from Tehran contributed
to this report.
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