Obama Administration’s Sanctions Cripple Iran’s Economic Security

Ariela Fleisig — July 11, 2011 – 1:07 pm | Barack Obama | Foreign Policy | Iran Comments (0) Add a comment

Iranian officials are warning that the effects of U.S. sanctions aimed at stopping Iran’s nuclear weapons program “will be immediate and prolonged,” The Washington Post‘s Thomas Erdbrink and Joby Warrick reported yesterday.

According to Erdbrink and Warrick:

Iranian officials acknowledge that the impact of the sanctions on banking and transportation companies will be immediate and prolonged. A series of economic measures approved by Ahmadinejad over the past six years has made Iran increasingly dependent on cheap imports of meat, bread and fruit. Iran also relies on imports of a wide variety of goods from Asia and Europe, including computer chips and luxury cars.

Tehran Center for Strategic Research food expert Behzad Ghareyazie said:

Unfortunately, we are importing unprecedented amounts of food, which makes us vulnerable to such moves by the United States… stopping our food imports means a serious imperilment of our national security.

Erdbrink and Warrick reported:

‘The impact is real,’ said National Security Council spokesman Tommy Vietor, describing canceled or frozen projects in Iran’s energy sector alone that total $60 billion. With sanctions broader and deeper than ever, Iran finds it difficult to ‘do business with any reputable bank internationally, to conduct transactions in euros or dollars, to acquire insurance for its shipping, [or] to gain new capital investment or technology infusions,’ Vietor said.

They also reported that the United States and Saudi Arabia are using oil pricing to increase pressure on the Iranian government:

Iranian officials also acknowledge the country’s vulnerability to falling oil prices. For years, record oil revenue insulated Iran from international sanctions and allowed the government to pursue populist policies intended to raise living standards of ordinary Iranians….

[R]ecent moves by the United States and Saudi Arabia are beginning to test Iran’s economic reliance on oil. The two countries worked in tandem to lower oil prices after the Organization of the Petroleum Exporting Countries - with Iran serving as chairman - decided against doing so at its June 8 meeting. The Obama administration released a portion of the U.S. strategic oil reserve, and Saudi   Arabia simultaneously pledged to unilaterally increase production….

‘The Americans and Saudis are using oil as a weapon against us,’ said Reza Zandi, an independent oil and gas expert based in Iran.

Many firms, including Danish shipping company Maersk, have been prompted by the Obama Administration’s sanctions to voluntarily withdraw their business from Iran:

After two years of failed efforts to entice Iran with diplomatic carrots, the Obama administration is quietly toasting successes at using economic sticks. A series of U.S. and international sanctions imposed over the past year have slowly undermined Iran’s ability to conduct trade by targeting the country’s access to international banking, insurers and transportation companies. Like Maersk, some firms voluntarily cut ties with Iranian companies that U.S. officials say are front operations for the Revolutionary Guard.

They wrote that the Obama Administration is looking to put even more pressure on Iran:

‘We are continuing to look seriously at additional measures,’ David Cohen, confirmed last month as the Treasury undersecretary for terrorism and financial intelligence, said in an interview. ‘On the one hand, we want to make clear to Iran that we remain open to a meaningful discussion of its nuclear program. But we’re also making it clear that as long as they continue on this path, they will face consequences.’

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