US Sanctions On Iran And Its Impact On Economy – OpEd

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Since the Iranian revolution in 1979, the US and Iran have been engaged in hostile relations, including diplomatic. This was due to Iran’s actions, which included the hostage crisis, proxy wars, and support for non-state actors such as Hamas and Hezbollah. Relations between the two countries have also been tense because of Washington’s action, including Saddam Hussein’s support for an attack on Iran. However, once the orthodox Iranian revolutionaries were defeated in the 1990s, the Islamic administration developed ties with several European nations, including China and India, as well as the former Soviet Union. They discussed the oil and gas arrangements. However, the US and Iran’s ties remained strained and antagonistic; US oil companies were barred from lucrative petro-deals, and the Bush administration designated Iran as part of the “Axis of Evil.”

Furthermore, the nuclear program of Iran also affected the relationship of both states. Iran claims that its nuclear program is for peaceful purposes and also according to the IAEA states can keep nuclear weapons for peaceful purposes. For its part, the US has imposed sanctions on Iran which effect its economy, and as a result of these sanctions Iran has been unable to establish its hegemony in the region.

The Joint Comprehensive Plan of Action, also referred to as the Iran Nuclear Deal or Iran Deal, is a nuclear programme agreement between Iran and the P5+1 (the five permanent members of the United Nations Security Council—China, France, Russia, the United Kingdom, and the United States—plus Germany) together with the European Union that was reached in Vienna on July 14, 2015. JCPOA deal required the balance (weakening) of half of Iran’s 20% enhancement of uranium and the suspension of improvement surpassing 5%. There would be no greater advancement of improvement plants or heavy water reactors in Arak. No new improvement destinations; no going back over or advancement of going back over offices; no new taxes; and the quantity of existing rotators has decreased by 66%. The IAEA can examine offices announced as undeclared. It can utilize Iran’s atomic production network and all uranium mines and manufacturing plants. 

The hostile relations between the two nations became much more serious during the Trump administration. In 2018, Trump withdrew from the Joint Comprehensive Plan Of Action (JCPOA), and Iran’s economy is suffering because of severe economic sanctions. Trump tweeted in July 2019 that Iran had erred by shooting down a US military surveillance drone that had entered Its airspace on June 20, 2019. 

Furthermore, Trump claimed that the JCPOA agreement was one-sided and that the deal was never made. Trump also urged increasing sanctions against Iran. The US has used unilateral sanctions to weaken Iran due to its nuclear weapons programs. Sanctions against Iran influenced the entire Middle East, and heightened tensions. Trump’s goal was to halt Iran’s nuclear program. 

US sanctions initially targeted investments in the oil, gas, and petrochemical industries as well as transactions with the Islamic Revolutionary Guard Corps and exports of refined petroleum products (IRGC). It covered banking and insurance activities, domain name registration, web hosting for corporate endeavours, and shipping (including with the Central Bank of Iran). Subsequent UN resolutions have increased sanctions against Iran.

Iran’s economy is crumbling after years of US sanctions and Tehran insists Washington must suspend those restrictions before the two sides can return to nuclear talks. Due to the sanctions Iran’s economy contracted an estimated 4.99% in 2020, steadily shrinking since 2017. The Islamic Republic’s economy expanded quickly in 2016, by 12.5%, after the nuclear accord was signed. But the reprieve only lasted for a short while.

The Biden administration had argued and demonstrated its willingness to re-join JCPOA to remove mistrust and normalize relations between the US and Iran. Biden consistently promised during his election campaign to re-enter the Iran nuclear deal that President Obama signed in 2015 and President Trump abandoned in 2018. In a September 2020 op-ed, Biden stated, “If Iran returns to strict compliance with the nuclear deal, the United States would re-join the accord as a starting point for follow-on negotiations …. We will endeavour to enhance and expand the parameters of the nuclear deal with our partners, while simultaneously taking care of other pressing matters.’

From all of these factors, it can be inferred that mistrust and conflicting interests strained the relationships between the two states, and that both have utilised their resources to oppose one another to protect their respective national interests. However, in the Middle East, both powers are competing for hegemony under the influence of “offensive realism.” Iran appears to succeed in this endeavour, though, as it pursues nuclear power. Iran has a reputation for being both overconfident and insecure, and it has long sought to defend itself from potential foreign inventions and meddling. It is more defensive than offensive to oppose Iran obtaining nuclear weapons because it would pose a challenge to Israel, a long-established hegemonic force in the region. The best course of action for the United States and its allies should be to continue the talks and maintain contact with Iran so that the West could get used to the concept of an Iranian nuclear state and come to an understanding with it. The sanctions should be eased, though, as they generally upset locals and pose little threat to Iran’s programme, which is growing.

Sughra Jan Muhammad graduated from the University of Balochistan, Quetta, in the Department of International Relations.

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