As sanctions ease, Iran sees oil exports jump

Washington insists that a crippling sanctions regime will continue to take its toll, but new figures suggest Tehran’s economic outlook is strengthening

Iranian oil exports rose 10 percent in November after sanctions against the Islamic Republic were eased as part of an interim deal with world powers, the International Energy Agency reported Wednesday.

Defending the deal, though, Washington’s sanctions czar said Wednesday that pressure on Iran will continue to mount over the coming six months.

David Cohen, the US Treasury’s undersecretary for terrorism and financial intelligence, wrote in the Wall Street Journal Wednesday that the US “will ensure that Iran will not be able to export one additional barrel beyond the current low levels.”

“I am confident that the sanctions pressure on Iran will continue to mount. Iran will be even deeper in the hole six months from now, when the [interim] deal expires, than it is today,” Cohen, who has been the Obama administration’s main adviser on Iran sanctions, said.

Despite Cohen’s comments, the IEA reported that Iranian oil exports rose by 89,000 barrels per day to a total of 850,000 barrels per day last month, as the sale of crude to China and Taiwan rose, according to CNN.

European and American oil embargoes remain in place, in accordance with US assurances that the toughest sanctions will hold while the P5+1 and Iran continue to negotiate.

David Cohen (photo credit: United States Government Work / Flickr)
David Cohen (photo credit: United States Government Work/Flickr/File)

The interim deal reached in Geneva last month reportedly allows Tehran to keep enriching uranium to 3.5 percent, limits the number of centrifuges without reducing them, and keeps the Arak heavy water reactor open. Iran in exchange receives an easing of sanctions to the tune of $6 or $7 billion, a fraction of the $80 billion in revenue which Iran lost last year, according to Cohen. 

He noted that the limited relief of sanctions on Iran’s petrochemical industry would not yield significant results for Tehran, as most buyers seek longer term contracts, which wouldn’t be guaranteed beyond the terms of the current temporary agreement.

“Iran is in a deep recession — its economy contracted last year by more than 5%, and it is on pace to contract again this year. Its annual inflation rate now stands at about 40%. Iran’s currency, the rial, has lost around 60% of its value against the dollar since 2011,” Cohen wrote.

On Sunday, Iran’s President Hassan Rouhani said the deal had already boosted the country’s economy.

Rouhani told an open session of parliament that, after the “success” of the talks, investors were gravitating to businesses and the stock exchange.

“Economic activities have been shifted to the stock exchange from gold, hard currency and real estate,” said Rouhani in his televised speech. He gave no specific figures.

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