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Trump seems to hold a good grip on the Iran deal. He is basically fulfilling he campaign promises. Lets see who is next.
Iranian Affairs
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Trump seems to hold a good grip on the Iran deal. He is basically fulfilling he campaign promises. Lets see who is next.
A123
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Doomed? Why Iran's Economic Mess Will Get Worse
What's in store and why?
It is true that the European partners to the Iranian nuclear the deal, such as Germany and the U.K. are trying to salvage some form of continued arrangement with Tehran, Iran's seat of government. However, that matters little because few significant corporations would want to spark the ire of the U.S. administration in a way that might cut off their access to the lucrative U.S. market. Remember, that in capitalist economies the government typically doesn't buy nearly as much as do corporations. It will be the latter that will shun doing business with Tehran.
If you doubt that European companies are worried then consider the following from Reuters discussing the desire of some to get a waiver from the sanctions if they continue to do business with Iran:
Or put simply, there is a heck of a lot at stake for any European company that wants to keep trading with Iran.
The Reuters report continues by noting there is little the Europeans can do to counter the U.S. move. It is reasonable to expect scant European government protection from U.S. sanctions and therefore few companies based there will continue trading with Iran.
Harder sell
The first fallout will be that Iran will find it harder to sell crude oil on the global market. The revenue from these sales is a vital source of foreign currency. The Washington-D.C.-based Institute of International Finance sees a reduction in Iranian energy exports of around 300,000 barrels a day, according to a recent report by the think tank.
However, at least some others see things differently with a more substantial reduction in energy exports depending on how companies choose to react.
While Tehran may be able to sell oil to some countries, such as India, China, and Russia, it seems likely that the buyers will ask for a deep price discount given the situation in which Iran now finds itself.
Either way, expect Iran's currency to continue falling, which will ultimately push up prices of goods and services for consumers inside the country. "We expect average [consumer price index] inflation to accelerate," states the recent IIF report.
It is important to remember that when the annual inflation rate reaches triple digits (100%) that the spending power of money halves every 12 months. That will place a considerable hardship on the local population of Iran, just as it has in the more extreme example of the hyperinflation in Venezuela.
Protests ahead?
So what? It is when people can no longer afford to feed their families that uprisings happen. Note it was rising food costs that sparked both the so-called Arab Spring in 2011 as well as China's Tiananmen Square protests in 1989.
Already Iran has experienced mass protests due to the deteriorating economic conditions. They started late 2017 and continued into the early part of this year. See the CNN report here. It may happen again before long.
Capital-drought?
Making matters worse, foreign investment in the country will get hit also. "Uncertainty related to the fate of the nuclear deal will weigh heavily on investment," according to IIF. Investment is vital for any country to grow. The money either has to come from savings inside the country or from foreign investors. However, due to the sanctions, the money coming from external sources will be severely restricted.
Not only will lack of capital inflows hurt economic growth but it will hamper any efforts to develop or modernize Iran's domestic industries. In simple terms, the coming capital-drought will place even further stresses on the already beleaguered economy.
IRGC in crosshairs
A separate part of the U.S. sanctions involved a move against the governor of the Iranian central bank and one of his deputies. Both people are accused by the U.S. Treasury of financially supporting the Iranian Revolutionary Guard's Corps' Quds Force division. The Quds Force is believed to be the primary way the Iranian government passes support to Hezbollah, according to the Counter Extremism Project website.
"The new measure [by the U.S.] gives substance to the president’s promise to counter Iran’s “aggression” in the region," states a recent report from geopolitical consulting firm Eurasia Group. Perhaps more important is that it will "suffocate Iran’s ability to move money to its main ally" Hezbollah, the Eurasia Group report continues.
Or alternatively, it may just make it more expensive for Tehran to get the cash to Hezbollah, which seems more likely. The added costs of moving cash around will further drain the state's coffers and strain the economy.
The bottom line is that the immediate future for Iran's economy looks bleak.
What's in store and why?
It is true that the European partners to the Iranian nuclear the deal, such as Germany and the U.K. are trying to salvage some form of continued arrangement with Tehran, Iran's seat of government. However, that matters little because few significant corporations would want to spark the ire of the U.S. administration in a way that might cut off their access to the lucrative U.S. market. Remember, that in capitalist economies the government typically doesn't buy nearly as much as do corporations. It will be the latter that will shun doing business with Tehran.
If you doubt that European companies are worried then consider the following from Reuters discussing the desire of some to get a waiver from the sanctions if they continue to do business with Iran:
[French oil giant] Total said any waiver would need to include protection from secondary sanctions that Washington might impose on companies that continue to do business with Iran. These might include the loss of financing in dollars by U.S. banks, the loss of U.S. shareholders and the inability to continue its U.S. operations, it said.
Or put simply, there is a heck of a lot at stake for any European company that wants to keep trading with Iran.
The Reuters report continues by noting there is little the Europeans can do to counter the U.S. move. It is reasonable to expect scant European government protection from U.S. sanctions and therefore few companies based there will continue trading with Iran.
Harder sell
The first fallout will be that Iran will find it harder to sell crude oil on the global market. The revenue from these sales is a vital source of foreign currency. The Washington-D.C.-based Institute of International Finance sees a reduction in Iranian energy exports of around 300,000 barrels a day, according to a recent report by the think tank.
However, at least some others see things differently with a more substantial reduction in energy exports depending on how companies choose to react.
While Tehran may be able to sell oil to some countries, such as India, China, and Russia, it seems likely that the buyers will ask for a deep price discount given the situation in which Iran now finds itself.
Either way, expect Iran's currency to continue falling, which will ultimately push up prices of goods and services for consumers inside the country. "We expect average [consumer price index] inflation to accelerate," states the recent IIF report.
It is important to remember that when the annual inflation rate reaches triple digits (100%) that the spending power of money halves every 12 months. That will place a considerable hardship on the local population of Iran, just as it has in the more extreme example of the hyperinflation in Venezuela.
Protests ahead?
So what? It is when people can no longer afford to feed their families that uprisings happen. Note it was rising food costs that sparked both the so-called Arab Spring in 2011 as well as China's Tiananmen Square protests in 1989.
Already Iran has experienced mass protests due to the deteriorating economic conditions. They started late 2017 and continued into the early part of this year. See the CNN report here. It may happen again before long.
Capital-drought?
Making matters worse, foreign investment in the country will get hit also. "Uncertainty related to the fate of the nuclear deal will weigh heavily on investment," according to IIF. Investment is vital for any country to grow. The money either has to come from savings inside the country or from foreign investors. However, due to the sanctions, the money coming from external sources will be severely restricted.
Not only will lack of capital inflows hurt economic growth but it will hamper any efforts to develop or modernize Iran's domestic industries. In simple terms, the coming capital-drought will place even further stresses on the already beleaguered economy.
IRGC in crosshairs
A separate part of the U.S. sanctions involved a move against the governor of the Iranian central bank and one of his deputies. Both people are accused by the U.S. Treasury of financially supporting the Iranian Revolutionary Guard's Corps' Quds Force division. The Quds Force is believed to be the primary way the Iranian government passes support to Hezbollah, according to the Counter Extremism Project website.
"The new measure [by the U.S.] gives substance to the president’s promise to counter Iran’s “aggression” in the region," states a recent report from geopolitical consulting firm Eurasia Group. Perhaps more important is that it will "suffocate Iran’s ability to move money to its main ally" Hezbollah, the Eurasia Group report continues.
Or alternatively, it may just make it more expensive for Tehran to get the cash to Hezbollah, which seems more likely. The added costs of moving cash around will further drain the state's coffers and strain the economy.
The bottom line is that the immediate future for Iran's economy looks bleak.
Iran IRIB3 Hala Khorshid TV program Telecommunication Minister Mohammad Javad Azari-Jahromi: Payam AmirKabir 5 satellite with Simorgh SLV launch has failed on third stage, but the Dosti saterlite will be next to launched to Orbit
Iran nuclear chief, Ali Akbar Salehi,we could enrich uranium to 20% within four days, if exit the JCPOA (Iran nuclear deal )
Iran's nuclear chief, Ali Akbar Salehi,gestures as he speaks to Reuters during an interview in Brussels in November. | REUTERS
GENEVA - Iran can enrich uranium up to 20 percent within four days, its atomic energy chief said on Tuesday, a comment apparently aimed at showing Tehran could quickly expand its enrichment program if its nuclear deal with world powers collapses.
Iran’s 2015 accord with world powers caps the level to which it is able to enrich uranium to 3.67 percent purity, well below the 20 percent it was reaching before the deal, and the roughly 90 percent suitable for a nuclear weapon.
President Donald Trump pulled the United States out of the deal last May, calling it flawed, and reimposed sanctions on Iran. Tehran refuses to renegotiate and has said the deal could fall apart unless European signatories preserve its economic benefits for the Islamic Republic against U.S. pressure.
“If we want to come out of the nuclear deal and produce, within four days we could start our 20 percent,” Ali Salehi, head of the Atomic Energy Organization of Iran, told the semi-official Fars News Agency. “But we already have stockpiles of 20 percent, and the capability.”
Salehi did not elaborate on his remark about stockpiles. Iran’s reserve of 20 percent enriched uranium was downblended, shipped abroad or turned into fuel plates for a research reactor after the nuclear deal was clinched.
Salehi told Reuters in an interview last November that Iran could resume enriching uranium to 20 percent purity — seen as well above the level suitable for fueling civilian power plants — if the 2015 deal’s trade spin-offs do not pan out for Tehran.
www.japantimes.co.jp
Iran's nuclear chief, Ali Akbar Salehi,gestures as he speaks to Reuters during an interview in Brussels in November. | REUTERS
GENEVA - Iran can enrich uranium up to 20 percent within four days, its atomic energy chief said on Tuesday, a comment apparently aimed at showing Tehran could quickly expand its enrichment program if its nuclear deal with world powers collapses.
Iran’s 2015 accord with world powers caps the level to which it is able to enrich uranium to 3.67 percent purity, well below the 20 percent it was reaching before the deal, and the roughly 90 percent suitable for a nuclear weapon.
President Donald Trump pulled the United States out of the deal last May, calling it flawed, and reimposed sanctions on Iran. Tehran refuses to renegotiate and has said the deal could fall apart unless European signatories preserve its economic benefits for the Islamic Republic against U.S. pressure.
“If we want to come out of the nuclear deal and produce, within four days we could start our 20 percent,” Ali Salehi, head of the Atomic Energy Organization of Iran, told the semi-official Fars News Agency. “But we already have stockpiles of 20 percent, and the capability.”
Salehi did not elaborate on his remark about stockpiles. Iran’s reserve of 20 percent enriched uranium was downblended, shipped abroad or turned into fuel plates for a research reactor after the nuclear deal was clinched.
Salehi told Reuters in an interview last November that Iran could resume enriching uranium to 20 percent purity — seen as well above the level suitable for fueling civilian power plants — if the 2015 deal’s trade spin-offs do not pan out for Tehran.
Iran could enrich uranium to 20% within four days, nation's atomic energy chief says
Iran can enrich uranium up to 20 percent within four days, its atomic energy chief said on Tuesday, a comment apparently aimed at showing Tehran could quickly expand its enrichment program if its nuclear deal with world powers collapses.
UAE
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Iran nuclear chief, Ali Akbar Salehi,we could enrich uranium to 20% within four days, if exit the JCPOA (Iran nuclear deal )
Iran's nuclear chief, Ali Akbar Salehi,gestures as he speaks to Reuters during an interview in Brussels in November. | REUTERS
GENEVA - Iran can enrich uranium up to 20 percent within four days, its atomic energy chief said on Tuesday, a comment apparently aimed at showing Tehran could quickly expand its enrichment program if its nuclear deal with world powers collapses.
Iran’s 2015 accord with world powers caps the level to which it is able to enrich uranium to 3.67 percent purity, well below the 20 percent it was reaching before the deal, and the roughly 90 percent suitable for a nuclear weapon.
President Donald Trump pulled the United States out of the deal last May, calling it flawed, and reimposed sanctions on Iran. Tehran refuses to renegotiate and has said the deal could fall apart unless European signatories preserve its economic benefits for the Islamic Republic against U.S. pressure.
“If we want to come out of the nuclear deal and produce, within four days we could start our 20 percent,” Ali Salehi, head of the Atomic Energy Organization of Iran, told the semi-official Fars News Agency. “But we already have stockpiles of 20 percent, and the capability.”
Salehi did not elaborate on his remark about stockpiles. Iran’s reserve of 20 percent enriched uranium was downblended, shipped abroad or turned into fuel plates for a research reactor after the nuclear deal was clinched.
Salehi told Reuters in an interview last November that Iran could resume enriching uranium to 20 percent purity — seen as well above the level suitable for fueling civilian power plants — if the 2015 deal’s trade spin-offs do not pan out for Tehran.
Iran could enrich uranium to 20% within four days, nation's atomic energy chief says
Iran can enrich uranium up to 20 percent within four days, its atomic energy chief said on Tuesday, a comment apparently aimed at showing Tehran could quickly expand its enrichment program if its nuclear deal with world powers collapses.
Do you really believe that the US or Israel for that matter is going to allow Iran to enrich uranium to the point that could be used for military purposes?
UAE
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That would be challenging for Iran but I must loud Iran persistence on this matter. Even China and other advanced countries still struggle when it comes to space exploration.
Time will tell,
but what I am surprised of that you think that matter for U.S to decide and after 40 years Istamic Republic crossing every red line you still thinking of they will wait for U.S , as soon as the political leadership make its decision then maybe see Iran real nuclear program,
Scorpion
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I think the US is monitoring Iran activity in this regard and as soon as Iran gets close the US and its allies will take military measures. Obamas red lines do not count.
Israel Prime Minister Benjamin Netanyahu warned Iran to leave Syria fast
'Get Out Fast': Netanyahu Warns Iran, Vows to Continue Air Raids
The Israeli Air Force has been conducting strikes on targets in Syria, claiming them to be Iranian military bases. Tehran has denounced Tel Aviv's claims stating that only Iranian military advisers are in the Arab Republic at the request of Damascus.
Israeli Prime Minister Benjamin Netanyahu has urged Iran to pull out its forces, allegedly stationed in Syria, threatening to continue air raids on the territory of the Arab Republic, The Jerusalem Post reported.
"I'm telling you, get out of there fast. We won't stop attacking", the Israeli prime minister said.
'Get Out Fast': Netanyahu Warns Iran, Vows to Continue Air Raids
The Israeli Air Force has been conducting strikes on targets in Syria, claiming them to be Iranian military bases. Tehran has denounced Tel Aviv's claims stating that only Iranian military advisers are in the Arab Republic at the request of Damascus.
Israeli Prime Minister Benjamin Netanyahu has urged Iran to pull out its forces, allegedly stationed in Syria, threatening to continue air raids on the territory of the Arab Republic, The Jerusalem Post reported.
"I'm telling you, get out of there fast. We won't stop attacking", the Israeli prime minister said.
Iran IRGC Chief Major Gen. Jafari response to Israel PM Netanyahu Recent Threat : Iran will maintains what it has in Syria
Iran vows to guard assets in Syria after Israel threat
The chief commander of the Islamic Revolution Guards Corps (IRGC) has vowed to protect Iranian military advisors in Syria, dismissing as "ridiculous and funny" Israeli threats to attack them.
"We will protect all of the military advisors as well as weapons and equipment that we have deployed to Syria in order to reinforce the Islamic resistance fighters and support the people of this Islamic country," Major General Mohammad Ali Jafari said Wednesday.
www.presstv.com
Iran vows to guard assets in Syria after Israel threat
The chief commander of the Islamic Revolution Guards Corps (IRGC) has vowed to protect Iranian military advisors in Syria, dismissing as "ridiculous and funny" Israeli threats to attack them.
"We will protect all of the military advisors as well as weapons and equipment that we have deployed to Syria in order to reinforce the Islamic resistance fighters and support the people of this Islamic country," Major General Mohammad Ali Jafari said Wednesday.
IRGC commander vows to protect Iranian advisors in Syria after Israeli PM's threat
The IRGC chief commander says Iran will defend its military advisors and equipment in Syria in the wake of Netanyahu
www.presstv.com
UAE
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That has always been the way for US/Israel in the region. Did not they take Iraq, Syria nuclear facilities down? What makes Iran different? Also enriching uranium at a fast pace is not possible. Iran if it felt for a second that it is in danger it will destroy itself and drag the entire region with it.
kovichni
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what makes iran different? give you a hint, it is the same reason they are NEGOTIATING for over a decade with iran instead of daring to attack like the examples you gave....
why exactly? you can look that up for yourself
Scorpion
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what makes iran different? give you a hint, it is the same reason they are NEGOTIATING for over a decade with iran instead of daring to attack like the examples you gave....
why exactly? you can look that up for yourself
I big to differ. Iran is a npt party and found non compliant with that therefore negotiating with Iran to comply by allowing periodic inspection of its nuclear facilities.