US pressure on Iran starting to tell, as sanctions and blockade bite
(Widens distribution) By Parisa Hafezi and Angus McDowall DUBAI, Sept 3 (Reuters) - A U.S. campaign to throttle Iran's economy byblockading its oil exports and stopping sanctions evasion is growing increasingly difficult to withstand, three senior Iranian sources said. Washington has in recent weeks sought to ratchet up the economic pressure on Tehran, in an effort to extract concessions in any…
Recent US efforts to choke Iran's economy through oil blockade and sanctions evasion measures are proving increasingly difficult to overcome, according to three senior Iranian sources. Washington has intensified economic pressure on Tehran in hopes of securing concessions in ongoing negotiations, which have thus far failed to yield any results.
While Iran's clerical rulers have previously evaded sanctions successfully for decades, the latest US measures have put them in a more vulnerable position, with limited options for generating foreign currency or purchasing goods.
The focus on blocking Iran's access to international financing networks has created a significant threat, as these were previously crucial channels for maintaining economic stability. Any signs of the economic campaign potentially breaking the ongoing conflict could bring relief to US planners, though Iran has warned it could respond with military escalation, heightening tensions at a critical juncture.
The conflict has once again erupted into open fighting this week, with US attacks on Iranian oil terminals in the Gulf leading to retaliatory strikes at US bases in Arab states.
Despite ongoing efforts to disrupt Iran's trade routes, energy is still flowing through the Strait of Hormuz, and the US oil blockade has halted Tehran's primary revenue source. The rial has plummeted to record lows, and Iran now has only two months' worth of imported gasoline. Iran's rulers are acutely aware of the severe economic risks and the potential for renewed nationwide protests, which they faced in January.
The US administration is also attempting to sway Iranian politics, hoping that the threat of inflation will dissuade the regime from making concessions before November's midterm elections. Meanwhile, Washington aims to push Iran towards internal unrest, according to a senior Iranian official.
The latest US measures target secondary sanctions against countries engaging in business with Iran, aiming to prevent the country from clearing dollar transactions for essential imports and oil sales. This approach has made Iran's existing sanctions evasion networks, including front companies, unregistered tankers, and smuggling, prohibitively expensive.
Iran's crude oil shipments have dropped to around 260,000 barrels per day, down from about 1.7 million barrels a year earlier, with only a fraction of shipments still reaching distribution points through alternative routes such as trucks, trains, or smaller boats across the Caspian Sea. Tehran claims it still possesses tens of millions of barrels in tankers outside the blockade zone, but the new sanctions have made intermediaries reluctant to participate or demand higher fees.
Overall, Iran's trade volume has plummeted by between 25% and 35%, with imports suffering more than exports, according to President Masoud Pezeshkian. Multiple high-ranking Iranian officials have expressed growing concerns over the country's rapidly deteriorating economic situation, with official inflation rates reaching 69.9% and food prices rising nearly twice as fast.
The unemployment rate has increased to 9.1%, while the number of unemployed has surged by around 450,000 since the previous year, further exacerbating labor force participation. Even for those still employed, the average monthly salary of approximately $125 falls short of meeting basic household spending requirements, which total around $450, as per official data.
Written by urgent.news from Gulf Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
