Vol. 76/No. 13      April 2, 2012

The Belgium-based Society for Worldwide Interbank Financial Telecommunication, used for most financial messaging between banks of different countries, announced March 15 it was expelling some 30 Iranian financial institutions, including Iran’s central bank. The move hinders Iran’s ability to electronically recover billions of dollars from sales of oil and other products—exports that finance as much as half of the Iranian government’s budget.

A day earlier, President Barack Obama had warned Tehran, “The window for solving this issue diplomatically is shrinking.” The Democratic administration stated its intention is to stay on the current “diplomatic” course of intensifying economic warfare. At the same time, it has threatened on several recent occasions to resort to military force to prevent Iran from “obtaining nuclear weapons.”

Tehran maintains that its nuclear program is solely directed toward energy production and medical research.

The Israeli government is carrying out an independent policy toward Iran, threatening to launch airstrikes on that country’s nuclear facilities in the nearer term if Tehran doesn’t comply with imperialist demands to abandon development of its nuclear program.

Tel Aviv’s stance has brought additional pressure on Washington and its allies to intensify the sanctions.

Crippling impact on Iran’s economy

Since 2006, the U.N. Security Council has imposed four rounds of sanctions. The U.S. and European Union have leveled dozens of additional punitive measures on Iranian banks, engineering conglomerates, shipping companies, port operators, energy companies and individuals.

At the end of last year, the Obama administration adopted new sanctions targeting foreign financial institutions that do business with Iran’s central bank, aimed at hampering Tehran’s international oil sales. A month later the European Union imposed an oil embargo and froze the bank’s assets.

With Tehran less able to convert crude oil exports into hard currency, the value of the Iranian rial has collapsed since the end of last year, losing 60 percent in value against the dollar on unofficial currency markets, according to the Financial Times.

The squeeze is coming from more and more places beyond Europe and the U.S. In January, China, South Korea and Singapore sharply cut their oil purchases from Iran. India canceled an Iranian shipment because its European insurers refused to provide coverage for the tanker. And Japanese oil refiners have asked for clauses to be added to oil-purchase contracts so they can back out if they can’t obtain tanker insurance.

Noor Islamic Bank in Dubai announced last month it had severed relations with Iranian banks in response to the new U.S. sanctions.

Earlier this month Japan and Spain reduced Iranian oil imports and switched to Saudi crude. Japan has been Iran’s third largest customer and Spain one of Iran’s top three clients in the EU.

Previous sanctions have deprived Iran of the technology it needs to maintain oil production. According to the International Energy Agency, the latter fell in February to a 10-year low.

The economic warfare has imposed hardship on working people of Iran. Prices of food like rice, red meat, milk and eggs “double, sometimes triple, within a few weeks,” according to a March 1 report posted on the French-language TV5 network website.

According to rice exporters, Reuters reported in February, “Iranian buyers had defaulted on payment of 200,000 tons of rice from their top supplier India.” The dispatch added, “grain ships are docked outside Iranian ports, traders are not booking fresh cargoes and exports of staples to Iran such as maize are falling as collecting payment from buyers gets harder.”

The imperialist sanctions appear to have the intended effect of inflaming factional tensions among Iranian rulers. The big-business press is doing its part, drawing attention to growing conflicts between Iran’s supreme leader, Ayatollah Ali Khamenei, and President Ahmadinejad. Despite differences, neither faction has voiced any intention to retreat from the government’s nuclear ambitions.  
 
 
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