Less than two weeks remains before the US implements biting oil sanctions against Iran.
As would be expected, the Iranian regime is holding its breath in anxiety, with serious concerns over the repercussions for its already crumbling economy.
A terrified government
“Government Ministers have become nervous and aggressive, have little patience and easily become furious. The work pressure and (their) intolerance has negatively affected the ministers and government directors,” Gholamali Jafarzadeh, a member of the Iran’s parliament, said.
During the past week, Rouhani’s government began a new round of Ministry shuffles. The Ministers of Industry and Mines, Commerce, Housing and Urban Development, and Roads and Transportation resigned. Rouhani accepted all the resignations.
Although these changes in the government may seem like a way to cope with the growing crises hitting the regime from all sides, it actually has the opposite effect and even Iranian officials acknowledge the futility of these changes. These developments will also lead to more infighting within the Iranian regime.
“Some people ask why we don’t dismiss managers in the current conditions,” First Vice President Eshaq Jahangiri said.
The answer to this question is clear: Because each minister and each director belongs to a faction within the regime, and replacing them would change the current balance and create infighting.
This is the escalation of conflict among officials on the verge of the new round of sanctions. The sanctions are revealing important facts on the highly disturbed state of Rouhani’s government and the 40 years of government cronyism which has plundered the people in unprecedented astronomical figures.
“In our country there might be a bitter incident in a Ministry and there might be financial corruption, but no (officials) are removed and no one apologizes,” the Arman state-run Daily wrote.
“Millions of people live below the poverty line and face livelihood problems, but we are witnessing huge financial abuses,” the newspaper added on October 22.
The steep slope of the crises
The pace of change is toward the escalation of the crises. This is while the main round of sanctions that will begin on November 4th have not even completely taken hold yet.
Defenders of the JCPOA fantasize about Europe coming to their aid. They say Russia, China and India will help Iran avert the sanctions. They claim that oil prices will skyrocket and predict that Europe will create a “non-sanctioned” financial payment channel.
Following the withdrawal of the US from the JCPOA in May, large companies such as Siemens, Total and Maersk announced their intention to stop doing business with Iran. But beyond the European institutions, Chinese banks, which have close links with the US financial system, will probably avoid the risk of sanctions. On October 23, the Kunlun Co Bank, which is the main Chinese bank to conduct transactions with Iran, stopped its banking operations with Iran.
According to Reuters, the bank had already quietly suspended euro-denominated payments from Iran in late August.
If supporters of JCPOA hope that these countries will violate US sanctions, they will be greatly disappointed. Their only hope is to convince Trump not apply two of the most effective sanctions in November: One on oil, the largest source of Iran’s income, and another on Iran’s use of SWIFT.
Defenders of the JCPOA think they can discourage Trump from implementing oil sanctions by scaring him about rising oil prices. But the sanctions in November are the same as the 2011 sanctions imposed by the Congress. At that time, the Obama administration, warning about its impact on rising oil prices, called on Congress not to pass the resolution.
In June, Saudi Arabia announced its commitment to increasing oil production to 2 million barrels per day. Recent reports indicate that Riyadh and Baghdad intend to compensate for the supply shortages. The Trump administration announced last week that it would release 11 million barrels from the US’s strategic oil reserves.
Aside from any issues over the decline in Iran’s oil exports and its impact on other countries, what’s important to note is that the Iranian people have had enough of the 40 years of brutal suppression and plundering of their wealth and they are ready for a new round of protests.