US sanctions against Iran take effect on Monday in some areas. Iranians fear their impact.
The first wave of US sanctions hit Monday night Iranians feverishly waiting for this moment for weeks. Sign of nervousness due to the decision announced by Donald Trump exactly three months ago, the Iranian currency, the rial, has lost one-fifth of its value for two weeks, to 112,000 to a dollar. This is in addition to the nearly 50% fall since March, fueling imported products, especially food, the second highest inflation on the planet; 210% per year currently.
The Iranians have made precautionary provisions in recent weeks, and many of the better-off have preferred to leave the country. In recent days there have been more demonstrations that the official media have described as denouncing American sanctions, while many are in fact targeting the regime against a background of recurring social tension. Road hauliers have been on a bumpy strike for weeks.
The sanctions restored on Monday are however far from the hardest of those that Iran will have to face; they have no food or pharmaceutical products, Washington wants to avoid being accused of trying to starve the population. They prohibit any company in the world, under penalty of being closed the US market, the purchase on behalf of Iran gold, aluminum, steel, coal, software, vehicles and car parts, and, more crucial, any acquisition of dollars.
The real deadline in November
To which is added, baroque detail, the prohibition of all imports of Persian rugs and pistachios. But the only serious Iranian exports are hydrocarbons, which will be banned by Washington only in November. This is where Tehran will really be strangled, even if it claims to be able to sell its oil to those Chinese companies that are not interested in the US market … so not so many people.
Sign that it is on oil that the tussle will be played , Tehran launched last Thursday ostentatious maneuvers in the Strait of Hormuz. At the mouth of the Persian Gulf, this strait sees a quarter of the world trade of black gold and Tehran threatened to block if it could not sell its oil. This would cause a panic world, although this is probably out of range of his navy …
Rohani in difficulty
Iranian President Hassan Rohani, under the authority of Ali Khamenei, will be in big trouble to hold the controls in November. Presumably destabilized by the impact of the first wave of sanctions, it is also threatened by social tensions and by the “principals” within the regime. They blame his openness policy for bringing no prosperity to the country. Had it helped stabilize inflation until recently, its policy of price truth via a reduction in subsidies has affected the purchasing power of the working classes, says Clement Therme, specialist of Iran International institute for strategic studies.