With Tuesday’s midterm elections approaching like a flaming meteor, President Donald Trump has been ramping up his rhetoric on all key issues, and his attack on Iran is key among his rallying cries.
With the oil sanctions kicking in today (how’s that for timing?) the Iranian economy is bracing itself for a big hit, with Iranians taking to the streets in protest against the move.
The Trump administration, which pulled out of the 2015 nuclear deal in May, has already reimposed a number of other sanctions that had been lifted under the deal, which was a major foreign policy achievement for President Barack Obama.
Undoing the deal, known as the Joint Comprehensive Plan of Action, or JCPOA, has been the cornerstone of President Trump’s foreign policy. The International Atomic Energy Agency repeatedly certified Iran’s compliance with the deal before Trump decided to withdraw last Spring. Iran has continued to comply with the deal — which curtailed the country’s enrichment activities in exchange for sanctions relief — following the U.S.’s departure from it.
Secretary of State Mike Pompeo on Monday announced that China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey will be granted temporary waivers from the oil sanctions to help their gradual transition away from Iranian oil, in hopes that it will keep the pool market stable.
The market shrugged off the waivers, granted to some of the top importers of Iranian crude, with oil prices rising on Monday.
China, the top importer of Iranian oil, was not granted a waiver when the Obama administration imposed similar sanctions on Iran. China ended up leveraging its position and negotiating lower oil prices.
Iranian President Hassan Rouhani on Monday said that Iran would continue to sell its oil to break sanctions and that Iran is now facing a “war situation.”
Over the weekend, in an interview with USA Today, the country’s foreign minister, Javad Zarif, said Iran was willing to talk with United States — whether it be under the Trump administration or the next one — if the U.S. has “a different approach,” one that is based in “mutual respect” with the goal of creating “foundations for a fruitful dialogue.”
The sanctions that have already been imposed have caused major instability in Iran’s economy, resulting in high inflation, currency devaluation, and foreign investors pulling out, fearing secondary sanctions from the U.S.
As it stands, the other partners in the nuclear deal — Russia, China, the United Kingdom, France, and Germany — are all in favor of sticking with it, and they have the support of all other members of the U.N. Security Council.
In a September meeting during the United Nations General Assembly in New York, President Trump was alone in his stance on Iran, as all other 14 members took turns telling him he had made a grave mistake in pulling out of the deal.
On Friday, Trump tweeted a Game of Thrones-themed meme, in which he casted himself as a hero of sorts for putting sanctions on a nation of 80 million people, who are already struggling to make ends meet. The commander of Iran’s Quds Force, Qasem Soleimani, responded with a meme of his own:
Qasem Soleimani, the Commander of the Quds Force, Iran’s external security agency, has posted this image on his Instagram in response to Trump’s tweet. pic.twitter.com/l1zdRIBK9f
— Yashar Ali 🐘 (@yashar) November 3, 2018
Among the sanctions is one that hits at Iran’s ability to participate in international banking — the SWIFT (the Society for Worldwide Interbank Financial Telecommunication) system — which cut off designated Iranian institutions from using the network that allows banks around the the world to transmit transaction information.
The vast majority of banks worldwide use the Belgian-based SWIFT network and being cut off from it will have a serious impact on Iran’s economy. It remains to be seen how many Iranian banks the U.S. will want to block from SWIFT. If they are not blocked, SWIFT will face U.S. sanctions.
There was doubt as to whether the U.S. would even employ SWIFT sanctions this time, as Treasury Secretary Steven Mnuchin last week said he worried they would block the flow of humanitarian goods, such as medicines, to Iran.
National Security Adviser John Bolton and some Republican senators harshly opposed Mnuchin, who relented on Friday, imposing banking sanctions.
In an op-ed in the Financial Times on Monday, Mnuchin wrote that the return of the sanctions means the Trump administration “is closing a chapter on a nuclear deal that President Donald Trump deemed ‘one of the worst and most one-sided transactions the United States has ever entered into'” and that the U.S. is already “subverting Iran’s efforts to fund destabilising activities and putting pressure on the Iranian economy.'”
These statements ignore two things: First, despite being under decades of sanctions (as well as coming out of a near decade-long war with Iraq), Iran managed to become a major regional power, whose influence rattles Israel, Saudi Arabia, and certainly, the United States.
Second, Mnuchin neglected to point out that the nuclear deal is still very much alive, and that Iran’s European partners in the deal are working to create a banking mechanism that will serve as a workaround to the sanctions.
China has also indicated continued support for the nuclear deal, it’s foreign ministry spokesperson saying on Monday that the deal “should be comprehensively and effectively implemented.”
“China opposes unilateral sanctions and long-arm jurisdiction,” said spokesperson Hua Chunying, adding, “We believe that China’s normal cooperation (with Iran) within international law is legal and legitimate, and this shall be respected.”