The Iranian rial now stands at 703,000 to the dollar; in 2015, it was 32,000 to the dollar.
By Hugh Fitzgerald, Frontpage Magazine
While the IDF has now devastated Iran’s air defense system, including the four S-300 anti-missile systems that protected Tehran, and destroyed its ballistic missile plants, as well as a top secret nuclear research plant at Parchin, the Trump administration is planning to apply its own financial pressure to bring Iran’s economy to its knees.
More on Trump’s plan can be found here:
“Trump admin. plans to bankrupt Iran with ‘maximum pressure’ policies – report,” Jerusalem Post, November 16, 2024:
“US President-elect Donald Trump’s administration is preparing to reinstate its “maximum pressure” strategy against Iran, targeting Tehran’s economic stability and its ability to support militant proxies and nuclear development, The Financial Times reported on Saturday, citing sources close to the transition team.
The sources revealed that the administration plans to impose stricter sanctions, particularly on Iran’s oil exports, which serve as a critical revenue source.
The anticipated sanctions could drastically reduce Iranian oil exports, which currently exceed 1.5 million barrels per day, up from a low of 400,000 barrels per day in 2020. Experts suggest that these measures would severely impact Iran’s economy.
Bob McNally, an energy consultant and former US presidential adviser, indicated that reducing exports to a fraction of current levels would leave Iran in a far worse economic position than during Trump’s first term, Financial Times reported.
According to the report, the renewed strategy aims to bring Iran back to the negotiating table for a comprehensive nuclear deal. According to Trump’s transition team, the approach involves crippling Iran’s financial resources to push its leadership into talks.
However, experts cited in the report expressed skepticism, noting that Tehran is unlikely to agree to what are expected to be stringent US terms. The Financial Times highlighted Trump’s campaign statement regarding Iran in September, saying, “We have to make a deal because the consequences are impossible.”
Not giving in to pressure
Iranian officials have already rejected the possibility of resuming negotiations under coercion. In a statement posted on X/Twitter earlier this week, Iranian Foreign Minister Abbas Araghchi warned that repeating the “maximum pressure” policy would result in failure, as it had during Trump’s first term….”
The Iranian reaction to the news of Trump’s renewed campaign of “maximum pressure” was the expected bravado — “we came out stronger from your first campaign” — but in fact the sanctions Trump imposed in his first term proved devastating.
And now Trump is planning even more severe sanctions.
He aims to cut into Iran’s oil sales, possibly by secondary boycotts of countries that continue to buy Iranian oil, possibly even by an embargo on oil exports from Kharg Island.
A decline in oil sales will hurt Iran much more this time, because during Trump’s first term, Iran still had a financial cushion from years of oil sales, but that cushion no longer exists.
The poverty rate in Iran is the highest it has ever been. More than 26 million Iranians now live below the poverty line, representing over 30 percent of the country’s total population.
Iran’s GDP went down steadily during Trump’s first administration, reaching its lowest point in 2020. Then, with the sanctions removed by Biden, the GDP has steadily risen.
And now, with those even stiffer sanctions about to be imposed, Iran’s GDP will again plummet. Iran’s currency collapse is another sign of Iran’s vulnerability to sanctions.
The Iranian rial now stands at 703,000 to the dollar; in 2015, it was 32,000 to the dollar.
The Iranian economy, already enduring a steep downturn, will be kicked into the basement after Trump imposes his sanctions designed to impose “maximum pressure.”
And as its economy unravels further, how can Iran keep up sending supplies of expensive weapons to Hamas, Hezbollah, and the Houthis?