IRAN: THE ECONOMIC WAR
By INU Staff
INU - The war of words between U.S. President Donald Trump and Iranian President Hassan Rouhani is heating up. Rouhani, referring to the oil imports that the U.S. is demanding foreign countries reduce to zero, said that “war with Iran is the mother of all wars”. President Trump did not let the threat slide and he angrily responded in a Twitter post. He warned Iran that he would not be accepting threats from Iran saying that it will face “consequences the likes of which few throughout history have ever suffered before”.
INU - The war of words between U.S. President Donald Trump and Iranian President Hassan Rouhani is heating up. Rouhani, referring to the oil imports that the U.S. is demanding foreign countries reduce to zero, said that “war with Iran is the mother of all wars”. President Trump did not let the threat slide and he angrily responded in a Twitter post. He warned Iran that he would not be accepting threats from Iran saying that it will face “consequences the likes of which few throughout history have ever suffered before”.
The warning to Iran is reminiscent of the time he warned Kim Jong Un that he would destroy his regime. Although the force behind Trump’s words, especially those written in messages on his Twitter account, may now hold less weight seeing as he and Kim Jong Un have since held warm talks in Singapore, he is nevertheless serious about the Iran threat.
He is focusing heavily on Iran and is putting economic pressure on the regime in an attempt to cut it off from funding that is used on terrorism and proxy groups in the region.
Sanctions have not yet come into full effect in Iran and already the economy is suffering. The Iranian currency – the rial – has lost half of its value in less than 12 months. Furthermore, huge deals with major multinational companies have fallen through because not many are willing to take the risk of getting caught up in U.S. sanctions. It does after all control one of the most powerful financial systems in the world.
When the Iran nuclear deal was being negotiated, the huge economic advantages were supposed to have a profoundly positive impact on the country’s economy. The regime was handed a huge opportunity to make a real difference to the lives of the people of Iran and to at least contribute to resolving some of the many major and pressing social problems that have been plaguing the country for years.
However, this was not the reality because the Iranian regime decided to fund militias and proxy groups across the region. It prioritised terrorism over its own people.
The Trump administration is trying to stop this. It has called on foreign countries (with some exceptions) to reduce their imports of Iranian oil to zero by November this year.
It is an ambitious objective, but it will have a profound impact on Iran’s oil revenues. It has been suggested that Iran could face losing one million barrels per day (bpd).
The United States is also consciously backing its allies in the region, namely Saudi Arabia, Israel and the United Arab Emirates (UAE) – three countries that also share the Trump administration’s concerns about Iran.
The United States is also consciously backing its allies in the region, namely Saudi Arabia, Israel and the United Arab Emirates (UAE) – three countries that also share the Trump administration’s concerns about Iran.
The Trump administration has the advantage over the Iranian regime. And comparing the U.S-North Korean and the U.S.-Iran situation, North Korea had many advantages that the Iranian regime doesn’t. Regardless of the war of words between Iran and the U.S., the Iranian regime should be fearing the financial war that is being waged.
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