Opponents Of Delisting Iran's IRGC Put More Pressure On Biden

The currency, rial, fell to a three-month low of 280,000 to one US dollar on Monday.

Iranian government officials including President Ebrahim Raisi and Oil Minister Javad Owji have been recently boasting about a 40-percent increase in Iran's oil exports and revenues.

Conservative newspaper Jomhouri Eslami wrote last week, "What is the impact of the extra revenues, if officials are right about selling as much oil as in the months before the US imposed sanctions?”

The daily wrote: "Some individuals officials are making pleasant statements to entertain the people, but their statements are not rooted in reality, and this will disappoint the people and will erode their trust in the government."

"While the prices of essential commodities and other goods are rising daily,” and people are suffering, “making hollow statements about improvement in the economy will not fool anyone," Jomhuri Eslami wrote.

Former reformist lawmaker Mostafa Kavakebian wrote in an April 8 tweet: "Government officials say that the Raisi administration can sell millions of barrels of oil at $100 per barrel” by circumventing US sanctions, and even releasing Iran's frozen assets in South Korea. “But why these measures do not affect people's livelihood and our diplomats are still wasting their time to get results from the Vienna talks?"

Hardliner journalist and activist Abdollah Ganji, who is close to the IRGC, tweeted in response, "Incidentally, I had the same question and asked the oil minister ‘if you selling more oil and you can repatriate the money, why we do not see its impact on people's livelihood?’ He said: We spent most of that money to make up for the $17 billion budget deficit from last year. The rest of it was spent on importing foodstuff with double prices on the global market."

Responding to the same question, social media users wrote in their comments that the extra income's impact is not visible "Because there are too many of those who steal the money."

Another comment read: "It is all lies. They do not sell more oil and do not bring any money into the country. They export the same amount of oil in barter trade deals. And when they bring back any money for selling the cheap oil, they have to pay a high percentage to middlemen." Yet another Twitter user said: "The system is corrupt, and it corrupts others. The situation will not get better as long as this regime is in power."

Oil Minister Javad Owji had said on March 24, "Iran has reached a record high of crude exports and revenues since sanctions hit the country’s oil industry in 2018." His Twitter post was accompanied by a quote from Supreme Leader Ali Khamenei, who praised the Raisi government for circumventing US sanctions.

Owji added that "The Oil Ministry provided hard currency and rial funds to the government beyond its budget commitments."

The minister's statement was in line with international media reports in February that said Iran’s oil exports had risen despite US sanctions. Reuters reported on February 10 that in the preceding two months daily shipments had surpassed one million barrels a day, the highest since May 2019.

Although there have been more exports, the additional revenue is probably too small to have a visible impact. If there were no US sanctions, Iran could export 2 million bpd and earn close to $60 billion a year at current prices, but Tehran is getting less than half of that now because even if it exports 1 million barrels pd, that is half the pre-sanction volume, sold at a discount.

Meanwhile, middlemen who do the illicit shipping take a big cut and a significant amount of the money probably does not come back in cash, but in food imports, as the oil minister’s remark seemed to suggest.

Majid-Reza Hariri told the Iranian Labour News Agency (ILNA) on Monday that US sanctions are preventing the implementation of a 25-year strategic cooperation agreement inked between Iran and China last year.

Hariri in previous interviews published in Iranian media has implicitly called for a nuclear agreement to be concluded with the West, emphasizing that Iran’s economy cannot emerge from its current crisis while US sanctions are in place, hampering oil exports and banking ties with the world.

The well-known businessman presiding over the Iran-China Chamber of Commerce in Tehran said as along as US sanctions are not removed, Tehran’s economic ties with Beijing cannot improve beyond the current point. He estimated that bilateral trade is not less than $30 billion, which could double in the event of a nuclear agreement with Washington.

Since former US president Donald Trump abandoned the Iran nuclear deal known as JCPOA in 2018, Tehran has been emphasizing an Eastern-oriented foreign policy it dubs as ‘Looking East’, probably in an attempt to show Washington that it has alternatives and can draw closer to Moscow and Beijing.

Hariri explained that although China is Iran’s biggest trade partner, 92 percent of what it buys are oil and minerals, not finished goods. He underlined the fact that global inflation, especially in commodities, is rising and Iran’s trade with China can see an uptick in terms of value but not volume.

In case of other trading partners, such as Iraq and Afghanistan, 75-80 percent of Iran’s exports are raw materials.

Iran in recent months has presented figures saying its exports are increasing. But Hariri implied that part of this rise is simply due to global rise in prices, not more exports.

Hariri explained that preparatory work has begun to work out details of cooperation with China according to the 25-year agreement, but besides the impediment of US sanctions, there are issues of securing credit and financing, which have to be resolved regarding each area of cooperation.

One of the processes in expanding trade ties with Beijing is establishing Iranian representative offices in China, which Hariri said is work in progress. Plans are to open four chamber of commerce branches, but he did not say in which Chinese cities. Also, a permanent exhibit of Iranian goods is planned to be set up in China.

Hariri explained that the importance of trade representation is to boost non-oil exports, preferably manufactured goods to China.

Although the Islamic government in Tehran often tries to highlight what it says is close ties with China, Beijing has established wide-ranging commercial relations with other regional countries, including Saudi Arabia and Israel that are the Islamic Republic of Iran’s adversaries.

Saudi Arabia exports 25 percent of its oil to China and recently announced it is willing to accept the Chinese currency as payment for oil, as relations have cooled with the Biden Administration. Already Saudi Arabia is China’s biggest trade partner in the region.

"What has remained is more than one issue,” Saeed Khatibzadeh told reporters at his weekly press briefing. “All components of maximum pressure need to be removed.”

US ‘maximum pressure’ sanctions have been in place since 2018, when President Donald Trump withdrew the US from the 2015 agreement, the JCPOA (Joint Comprehensive Plan of Action), prompting Tehran by 2019 to expand its nuclear program beyond JCPOA limits.

A deal could have been concluded "months ago" had Tehran surrendered to US demands over its “red lines,” Khatibzadeh said. The spokesman reiterated that the "opportunity for dialogue" would not "remain open forever."

The US and Iran reportedly disagree over whether reviving the JCPOA should see the US remove the Iranian Revolutionary Guards (IRGC) from its list of ‘foreign terrorist organization,’ where Trump placed them in 2019. President Joe Biden’s administration, while committed to restoring the JCPOA, has apparently decided not delist the Guards, the only part of any state’s armed forces so designated, in the face of Congressional opposition to delisting from most Republicans and some Democrats.

The foreign ministry spokesman repeated Iran’s view that the sticking point in talks was the US and not the other world powers with whom Iran has for a year been discussing restoring the JCPOA – China, France, Germany, Russia, and the United Kingdom.

Referring to criticism of lawmakers from the principlist Paydari group, who have claimed Iranian negotiators have made too many concessions in a draft agreement over JCPOA revival, Khatibzadeh said there was "no final text."

"We have not yet reached the point where the American side demonstrates that it is fulfilling its obligations," Khatibzadeh said, claiming the US wanted to maintain as many of its sanctions as possible. His comments came a day after Foreign Minister Hossein Amir-Abdollahian said Sunday the US had presented "new conditions" for removing ‘maximum pressure.’

Iranian media and politicians who support the JCPOA have criticized the government over the talks. In a commentary Monday, Jomhouri Eslami newspaper said it should not have claimed over recent months that talks were near agreement or that Iran’s current economic problems would be solved irrespective of sanctions. "What matters is delivering on these promises,” the conservative paper noted.

Jomhouri Eslami linked US sanctions to rising prices. "Seven months appears to be enough time for the new government to take control of the affairs of the country and stop prices from rising,” it opined. “But many commodities have risen by between 50 to 80 percent during this time and pressure on people has doubled.”

Jomhouri Eslami urged the government of President Ebrahim Raisi "to seek help from those who have successful experience in this matter," presumably a reference to those who conducted earlier international talks under the presidency of Hassan Rouhani.

The US dollar rose to 280,000 rials on Monday from 260,000 on March 12, when signs emerged that negotiations in Vienna over reviving the 2015 nuclear agreement known as JCPOA were coming to a halt without an agreement.

Last December, the rial hit a low of more than 300,000 against the dollar but it gradually strengthened as hopes emerged of a nuclear deal that would lift US economic sanctions.

The Iranian government news website Monday morning claimed that a “high-level” regional official would visit Tehran on Tuesday to finalize the release of $7 billion frozen by South Korean banks. However, the foreign ministry spokesman immediately denied any knowledge of such a visit.

Any solid sign of blocked funds being released would boost the rial, which has fallen ninefold since late 2017, as former US president Donald Trump signaled his intention to withdraw from the JCPOA and impose sanctions on Iran.

Tehran has been claiming a 40-percent increase in oil exports in recent weeks, which have been partly confirmed by industry observers, but there are no positive signs of a financial windfall in Iran.

The falling currency has kept inflation at around 40 percent for more than a year, with food prices rising much faster, pushing wage earners into poverty. Even government-controlled media have been full of reports lately about food items rising in price to unaffordable levels.

The IRNA report did not mention who the high-level official is but said the visit would be the last step to execute “the recent agreement” to free $7 billion of Iran’s funds frozen abroad because of United States’ sanctions.

But in an unusual and obvious contradiction, foreign ministry spokesman, Saeed Khatibzadeh in his Monday morning briefing with reporters said his ministry had no knowledge of such a visit. Later, he told the media that an agreement to free some frozen funds does exist.

In the past months, there has been talk of unblocking $7 billion frozen by two South Korean banks after the US imposed banking sanction on Iran in 2018. A Korean diplomat visited Vienna in early January where talks to restore the Iran nuclear agreement were taking place, and met with all delegations.

However, IRNA said that “a framework” has already been agreed to free “a considerable part” of Iran’s blocked funds within a certain time period. It was not clear if the gradual release it mentioned would be about the $7 billion, or more money will be released by other countries, such as Iraq and Japan.

IRNA and other Iranian media reported last week that an agreement was reached, presumably with the US, to free the blocked funds, in what appears to be a deal to free dual nationals kept as hostages in Iran.

Washington has not commented on the Iranian reports, but last month the United Kingdom b paid more than $500 million of an old debt to Iran to free two dual nationals who returned to Britain.