🔶 Sanctions and a Maritime Blockade; How Much Can Iran’s Economy Withstand?

🔻A report by Danial Babayani

A severe drop in oil exports, more limited routes to access foreign currency, and the fall of the rial have brought fresh pressure to Iran’s economy—pressure, according to experts, that is not targeting only government revenues, and whose effects have spread from production and imports to households’ purchasing power.

Citing three senior Iranian sources, Reuters reported that America’s recent measures have significantly reduced Tehran’s ability to access foreign currency and finance imports.

According to these sources, the networks on which Iran has relied for years to get around sanctions have also become more costly and more constrained.

These pressures have intensified while, after six months of fighting, there is still no sign of an agreement between Tehran and Washington.

The United States hopes that higher economic costs will force Iran to make concessions in possible future negotiations; however, Iranian officials have warned that additional pressure could lead to the escalation of military confrontation.

One of the most important signs of this pressure is the sharp drop in Iran’s oil exports. Based on data from Kpler, which Reuters cites, the loading of Iran’s crude oil in the current month has fallen to about 260,000 barrels per day, while this figure was about 1.7 million barrels a year ago.

Ahmad Alavi, an economist and university professor, says to Deutsche Welle: “These figures mean an approximately 85% reduction in the volume of exports, and if this situation continues for one year, Iran could potentially lose between 37 and 47 billion dollars in gross foreign-currency income solely due to the reduction in export volume.”

According to him, the issue is not only the decline in government revenue. Lower oil revenues mean the government will have less foreign currency to import essential goods, medicines, raw materials, and machinery, and the Central Bank will also have fewer resources available to intervene in the currency market.

Mehdi Qadsi, an expert at the Institute for International Economic Studies in Vienna, also told Deutsche Welle that a large part of Iran’s trade was carried out via the sea, and replacing it with land and rail transport—because of lower capacity and higher costs—cannot fully make up for this decline.

📌 Read the full text of the report on the website of Deutsche Welle Persian.