The sanctions will take effect after a two to six month “warning period,” allowing Washington to organize with its allies to impose the measures in a way that minimizes the impact of a resulting rise in oil prices on the imperialists’ economies.
According to the Wall Street Journal, the U.S. and the European Union are seeking assurances from major oil producers like Saudi Arabia that they would increase exports if tighter sanctions are imposed on Tehran.
Iran is the third-largest crude oil exporter in the world. Its oil exports finance as much as half of the government’s budget, according to the New York Times.
Imperialist powers led by Washington charge that Tehran seeks to develop nuclear weapons, which many of the imperialist governments possess in large quantity. The Iranian government maintains that its nuclear program is for energy production and medical research.
Washington’s aggressive move comes on top of major economic and diplomatic measures already implemented by the U.S., the U.N., the European Union and other imperialist powers to force the Iranian government to abandon its nuclear program.
A meeting of EU foreign ministers at the end of January will decide whether to impose an embargo on Iranian oil imports. The EU imports about 18 percent of Iran’s exports of crude oil.
Sanctions hurt Iranian economyThe Associated Press reported Jan. 2 that the rial, Iran’s currency, had lost 10 percent of its value compared to the dollar in four days, “a new record low.” The exchange rate hovered that day around 16,800 rials to the dollar, compared to about 7,000 rials to the dollar in October—a plunge of almost 60 percent in just a few months.
Meanwhile, Iran’s crude oil production has dropped from 4 million barrels a day in 2010 to 3.5 million last year, “due to lack of investment in oil field development,” according to Iran’s deputy oil minister, Ahmad Qalebani. In December, four-year-old talks between Iran and Poland’s biggest natural gas developer collapsed over a project in the Persian Gulf.
The impact on working people from the imperialist sanctions is stark.
Officially inflation was at 19.8 percent in December. Prices of food and basic items like milk have increased up to 20 percent in recent months. The government recently ended subsidies on fuel and some foods, jacking up oil prices sevenfold and quadrupling bread prices.
Official unemployment was 11.1 percent last summer, but 24.7 percent for those under 24 years old, according to the Financial Times. Many factories work at less than half capacity. Interest rates are as high as 35 percent.
Naval maneuversFrom Dec. 24 to Jan. 2, Tehran conducted its largest naval exercises ever, from the Gulf of Oman to the Gulf of Aden, including war games in the Strait of Hormuz where about one-third of world oil tanker shipments transit. It test-fired several new missiles.
Three days into the exercises, Iran’s vice president, Mohammad Reza Rahimi, said that “not even a drop of oil will flow through the Strait of Hormuz” if sanctions are placed against Iran’s oil export, a clear reference to the bill that Obama was going to sign. The next day, Iran’s Navy Cmdr. Rear Adm. Habibollah Sayyari added, “Closing the Strait of Hormuz is very easy for Iranian naval forces.”
“Any attempt to close the Strait of Hormuz will not be tolerated,” responded George Little, Pentagon spokesperson. The U.S. Navy 5th Fleet has a strong presence in the region. The aircraft carrier USS John C. Stennis and guided-missile cruiser USS Mobile Bay sailed through the Strait of Hormuz without incident Dec. 27.
Then on Jan. 1, Iranian Rear Adm. Mahmoud Mousavi, said, “We won’t disrupt traffic through the Strait of Hormuz.”
Two days later, Maj. Gen. Ataollah Salehi, commander in chief of the Iranian army, said, “We recommend to the American warship that passed through the Strait of Hormuz and went to the Gulf of Oman not to return to the Persian Gulf,” according to Iran’s official news agency. “The Islamic Republic of Iran will not repeat its warning.”
At the same time, Iranian state television announced that government scientists for the first time had successfully produced and tested fuel rods for use in its nuclear power plants. “This great achievement will perplex the West, because the Western countries had counted on a possible failure of Iran to produce nuclear fuel plates,” said the Tehran Times.
The day before, shortly before Obama signed the new sanctions, Iran’s National Security Adviser and top nuclear negotiator, Saeed Jalili, said Iran was ready to resume talks on its nuclear program with the five permanent members of the U.N. Security Council—China, France, Russia, U.K. and U.S.—plus Germany. The last round of similar negotiations stalled in January 2011.
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