Iranians Eye Higher Oil Prices And A Possible Lifting Of US Sanctions

Ebrahim Rezaei, a member of Iran Parliament's National Security and Foreign Policy Commission, said in a tweet on Thursday that the Islamic Republic wants the United States to remove all the sanctions imposed on the IRGC, in addition to all other sanctions.

Rezaei added that Iran faces three sides in the talks; the first is Israel “that is responsible for sabotage and assassinations”, the second is the United States that manages “simultaneous pressure and negotiation”, and the third is the IAEA and its head Rafael Grossi, who is in charge of “feeding anti-Iran propaganda”.

He also called on Grossi to be a neutral observer and not “a puppet of the Americans and the Zionists”.

His remarks echoed similar ones by the spokesman of the committee who last week described removing the IRGC from the US list of terrorist entities as one of the necessary measures to revive the JCPOA nuclear deal.

Abbaszadeh-Meshkini said, "When we say the lifting of all sanctions, it means institutions, companies and individuals; removing the Revolutionary Guard (IRGC) from the list of terrorist organizations is also one of the expectations of the Islamic Republic.”

"As soon as nuclear negotiations in Vienna are concluded, we can reach our maximum oil production capacity and exports in less than one or two months," Owji was quoted as saying by the official oil ministry news agency SHANA on Telegram. "However, we are in no way tied to waiting for the nuclear talks."

However, Iran’s ability to pump more oil is limited because of lack of investments in the oil and gas sector over the years. Owji said in November that the country needs to invest around $160 billion to upgrade its infrastructure and boost production.

Recently, Iran’s parliament speaker indicated that production cannot be boosted to 4 million barrels a day, while domestic production is already around two million barrels. Iran plans to increase output to 3.8 million barrels per day if sanctions are lifted.

Iran sits on the world’s fourth-largest oil reserves, but its crude output has dropped since the imposition of US sanctions on its economy in 2018, when then-US President Donald Trump exited the 2015 nuclear deal.

Negotiations to revive the pact have been going on for 11 months in Vienna, and diplomats are now believed to be in the final stage of talks. The United States will lift oil sanctions at least temporarily until the two sides fully retore the nuclear agreement, JCPOA.

Gabriel Noronha, Former Special Advisor for the Secretary's Iran Action Group in the Trump administration in a series of tweets on Wednesday quoted State Department, National Security Council and European Union unnamed officials as having authorized him to reveal that Malley is preparing to make concessions to Iran that are damaging to US national security.

Noronha said these current officials hope that by revealing details of the concession they hope to prompt the US Congress to act “to stop the capitulation.”

He also charged that Mikhail Ulyanov, Russia’s chief envoy in the talks, has been the main architect of the deal. Noronha said that his contacts said, “What is happening in Vienna is a total disaster.”

Earlier, “concessions and other misguided policies have led three members of the US negotiating team to leave,” Noronha said in one his tweets.

Republican Senator Jim Inhofe tweeted later that “There is no limits to what @USEnvoyIran will offer Tehran to return to the failed nuclear deal.”

Noronha further said, “US has promised to lift sanctions on some of the regime’s worst terrorists and torturers, leading officials in the regime’s WMD infrastructure, and is currently trying to lift sanctions on the IRGC itself.”

Iran has long demanded that all post-2018 sanctions should be lifted – not just nuclear related sanctions. There are many terrorism and human rights related sanctions. The Biden Administration has insisted that it is willing to lift only nuclear sanctions.

Following Noronha’s revelations, a State Department spokesperson responded to Iran International’s questions, saying, “We are in the final days of a complex negotiation. We are prepared to lift JCPOA-related sanctions in order to end the nuclear and regional crises prompted by our withdrawal.Beyond that, we are not going to respond to specific claims about what sanctions we would be prepared to lift as part of a mutual return to full implementation of the JCPOA.”

According to Noronha, President Biden’s team “is preparing to rescind the Supreme Leader’s Office Executive Order (E.O. 13876) as soon as coming Monday, and lift sanctions on nearly every one of the 112 people/entities sanctioned…”

Top Islamic Republic officials facing serious accusations or evidence of involvement in acts of terrorism are also apparently slated to be de-listed.

Reuters reported last month reported some details about a draft agreement being prepared in Vienna, which did not mention these details. It appeared that the US was moving cautiously, with gradual lifting of economic sanctions.

If what Noronha has reported based on information that he says he has received from current officials is true, Iran would achieve almost everything it has been demanding in 11 months of negotiations.

Republicans and some Democrats in Congress have warned the Biden Administration about making concessions to Iran. It is not clear how they would act to demand accountability from the White House.

Faced with an unprecedented level of sanctions on Russia, banks are taking a dim view of business with all Russian entities and dropping clients if there is even a slight doubt on their ties to that country, Reuters quoted bankers and lawyers as saying.

While European and North American governments have introduced serious banking and other business sanctions, countries in Asia and Elsewhere are introducing their own restrictions.

Sanctions experienced by Iran went a bit farther than those announced against Russia, such as cutting off all banks, instead of a select group, and the central bank from the global SWIFT. But the overall psychological and legal impact appear not be too different.

While global banks have extensive experience with sanctions and have invested billions of dollars in compliance programs in recent years, the curbs on Russia are unmatched in their scale, speed and complexity and may yet grow, said executives. Russia was a much larger financial player before the sanctions than Iran ever was.

To avoid falling foul of the rules and having assets and capital ensnared by new curbs, banks are adopting extreme caution in all of their dealings with Russian entities, actions that will likely exacerbate global trade disruptions, said bankers and lawyers.

The United States alone fined banks billions of dollars for breaching its OFAC (Office of Foreign Asset Control) restrictions since 2010. BNP alone was fined $8.9 billion in 2014, while Commerzbank and HSBC were also fined in billion-dollar figures. From 2010-2019, the US took action against 32 banks and all paid penalties.

Many of these cases were related to Iranian sanctions violations, which has made international banks extremely careful in their dealings.

A senior Hong Kong-based Asia trade finance banker with a global lender told Reuters that his compliance colleagues are asking more questions even if a financing deal involves a non-sanctioned Russian entity, directly or indirectly.

The issue is not just current sanctions, but what may still come. "It's not just managing risk from the existing sanctions, but also thinking about what more could possibly happen on that front," an Asian banker told Reuters. "No one would like to sign a billion-dollar trade finance deal only to be told a week later that the entity in Russia has also been added to the sanction list."

There is also the danger of aftereffects even when sanctions are removed. Iran experienced this syndrome when it resolved its nuclear issue with world powers in 2015 and international sanctions were lifted.

From 2016-2018 when most economic sanctions were removed, Iran had a hard time to get major deals and joint ventures. While the country needed tens of billions of dollars in investment, it was able to secure just a few billion dollars.

The fear that a regime is unpredictable and sanctions can be reimposed for new unacceptable actions, will keep the financial sector and corporations away from a country which has emerged from sanctions.

Charlie Steele, partner at Washington-based consultancy Forensic Risk Alliance and a former US Treasury Department sanctions attorney told Reuters, "Banks generally, and certainly the global banks, often tend to be very cautious and conservative with respect to sanctions, especially U.S. sanctions.”

With reporting by Reuters

The survey, by Keyou Analytics, found that over 33 percent of 1,300 respondents would emigrate, permanently or temporarily, if able to. In a 2016 survey by the same institute, fewer than 30 percent of Iranians said they wanted to leave the country.

Speaking to Aftab News, Hossein Raghfar, economics professor at Alzahra University, Tehran, said the jump was due to political repression that started during the first six years of Mahmoud Ahmadinejad's presidency (2005-11), which Raghfar claimed had been a message to intellectuals and professionals that their political views would not be tolerated.

"It's from this point that we witness extensive emigration from the country,” argued Raghfar. “This included banning opposition media and political parties as well as sacking or forcing university professors and other professionals to leave.”

Raghfar said such people needed to be able to freely protest against economic hardhip and corruption, and that an increased desire to emigrate indicated a closed atmosphere. "No society can survive when only one voice is tolerated… I believe there must be the opportunity for lawful protest … to generate the feeling of belonging and loyalty in the society and towards its values," he said.

Eighty percent of those surveyed by Keyou survey cited economic factors. “Most of these people say they will have higher incomes abroad and a more comfortable life,” saidHamid Hosseini, a member of Iran's Chamber of Commerce.

Emphasizing the emigration of professionals, tradesmen and manufacturers due to economic and political uncertainty, Hosseinisaid the phrase “a comfortable life” was an important window into the thinking of prospective emigrants and showed their apprehension over the country’s future country. “They are tired and concerned,” he noted.

Thousands of teachers in protest rallies across the country last week threatened an “uprising” if the government did not increase their wages. Similar protests have been staged by other groups including civil servants and pensioners in recent months.

Iran's inflation rate stands at around 40 percent, but food prices have been rising much faster than the general inflation rate. Food prices rose by more than 60 percent in the past twelve months, on top of high inflation in the four years since a jump from 9.6 percent in 2017 to 30.2 percent in 2018 and around 40 percent in 2021.

Rents have increased twofold and threefold in some areas both in the capital Tehran and in provinces. Real estate prices have increased sevenfold since 2018 as the Iranian currency has nosedived and the sector has become a haven for protecting capital.

Some analysts have said that a lack of social and political freedoms combined with ever-worsening economic conditions have led to a widespread sense of hopelessness about the future of the country.

Economic hardships are the product of Islamic Republic’s anti-West foreign policy triggering sanctions and a corrupt and inefficient economic system, while political repression blocks all avenues to change and reforms.

Iran’s figure of 33 percent wanting to emigrate was higher, Keyou Analytics found, that a global average of 15 percent and a Middle Eastern average of 24 percent. Twenty-seven percent of South Americans wanted to leave, but only 7 percent of those in south-east Asia.