BLOCKADE AND SECONDARY SANCTIONS SQUEEZING TEHRAN
The latest US measures expanded secondary sanctions that target countries doing business with Iran in a bid to stop it from clearing dollar transactions needed for both oil sales and to finance crucial imports of goods and raw materials.
That effort is making Iran’s existing sanctions evasion networks – front companies, unregistered tankers and smuggling – too expensive to use, the three senior sources said.
Iranian crude loadings have fallen this month to about 260,000 barrels a day, from about 1.7 million a year earlier, according to data from commodity analytics firm Kpler, with only a trickle still moving off terminals for distribution by truck, train or smaller boats over the Caspian Sea.
Tehran says it still has tens of millions of barrels stored in tankers outside the blockade zone that it can sell, but the new sanctions mean intermediaries are stepping back or demanding more money, one of the officials said.
Total trade has fallen between 25 per cent and 35 per cent, with imports hit harder than exports, President Masoud Pezeshkian has said, one of several top officials warning in recent weeks about Iran’s rapidly deteriorating situation.
US pressure and Iran’s own attacks have meanwhile disrupted one of the main conduits for Iranian trade – the United Arab Emirates, which said on Aug 19 that all commercial exchange and financial dealings with Tehran were halted until further notice.
“If those channels stay closed, a supplier wants cash, a deal is routed through another country, and a shipment arrives later and dearer,” said an Iranian trader in Tehran who deals in imported goods.
The currency has collapsed in value from around 1 million rials to the dollar a year ago to over 2.2 million rials now.
The internal impact is very painful. Official figures put 12-month average inflation at 69.9 per cent, with food, beverages and tobacco prices rising at nearly twice that rate.
Official unemployment rose to 9.1 per cent in the spring, while the number of those in work fell by about 450,000 from a year earlier amid a wider fall in labour force participation.
Even for those still in work, the average monthly salary of around US$125 a month comes nowhere near meeting basic household spending requirements that come to around US$450 a month according to official data.
“We are getting poorer every day,” said Mahnaz, a 34-year-old private-sector employee in Tehran who asked that her family name not be used.