Since March, Iran has lost $10 billion in revenue due to economic sanctions imposed by the Trump administration.
The White House has been increasing economic pressure on Iran in response to the regime’s continued nuclear proliferation and its support for terrorist proxies in Syria, Iraq, Lebanon, and Yemen.
Last week, the U.S. imposed new sanctions on Iran’s Persian Gulf Petrochemicals Industry Company (PGPIC), the largest petrochemical group in Iran, and its 39 subsidiaries. The PGPIC is responsible for 50 percent of Iran’s petrochemical exports, and it financially supports the Islamic Revolutionary Guard Corps (IRGC). The PGPIC is now prohibited from accessing U.S. financial markets, and the Treasury Department has warned that any international entity which continues to partner with PGPIC will face the same sanctions.
The State Department recently declared the IRGC a foreign terrorist organization. The IRGC is known to violate human rights, maintain weapons of mass destruction, and support acts of terror. By sanctioning PGPIC, the Trump administration aims to wreck the IRGC’s arms fund.
In May, waivers allowing selected foreign governments to purchase Iranian oil expired. President Trump did not renew the waivers, which has driven Iranian oil exports to historic lows.
To prevent the rise of oil prices worldwide, the U.S. is working with Saudi Arabia and the United Arab Emirates to ensure that a sufficient supply is available on the market. In a Tweet sent out by President Trump in April, he assures that “Saudi Arabia and others in OPEC will more than make up the oil flow difference in our now full sanctions on Iranian oil.” President Trump said he would reopen talks with Iran if it gave up its nuclear weapons program, but Iran has agreed to talk only if the United States lifts its sanctions.
The CEO of PGPIC, Jafar Rabiee, claims exports have not been disrupted by the latest sanctions, and there is interest from customers in entering yearly contracts. However, there has been no evidence to back his claim and, according to an FDD report, Iranian exports of crude oil have plunged to 500,000 barrels per day. Previously, the lowest point was 600,000 barrels per day in January 2013.
Sanctions have put significant economic pressure on the Iranians, and it appears they are retaliating.
On June 13th, Norwegian and Japanese oil tankers suffered significant damage from explosions as they were leaving the Gulf of Oman. U.S. Secretary of State Mike Pompeo formally blamed the Islamic Republic of Iran for the attacks and released a video of an alleged team of IRGC members removing an unexploded mine from the Japanese ship hours after the attacks had occurred. Although concrete evidence was not provided to support his statement, Pompeo said the conclusion to hold Iran responsible had been made based on intelligence and the expertise required to carry out the operation.
On Monday, Iran stated it would surpass the limits on its uranium enrichment unless European countries follow through on implentation of a financial system that would bypass sanctions.
It appears Iran is hoping that U.S. allies, particularly Britain, France and Germany, will blame Washington for escalating tensions and encourage President Trump to ease pressure. Whether the Trump administration will back down remains to be seen.