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Iran President: US Sanctions Cost Country $200 Billion

Iran President: US Sanctions Cost Country $200 Billion

Wednesday, 1 January, 2020 - 13:00
Iranian President Hassan Rouhani. (Getty Images)

Iran has lost about $200 billion in revenues after the United States reimposed economic sanctions following its withdrawal from the 2015 nuclear deal, announced Iranian President Hassan Rouhani on Tuesday.

Speaking on the sidelines of the inauguration of a railway project in Golshahr near Tehran, he said: “Iran would have earned $200 billion surplus income...if the country were not involved in an economic war.”

The president questioned the argument of hardliners who say the sanctions have not affected Iran and criticized them for calling for the strengthening of sanction management as a way out of the dire situation without making any political concessions.

“What should we do? When there is no food and water, you are still in danger no matter how strong you are,” he said.

Nevertheless, he acknowledged the difficulties confronting the country due the “worst” sanctions, but he saw that the people have “managed to stand firmly against the enemy everywhere.”

Rouhani noted that had it not been for the sanctions, Iran’s “oil revenues in the last two years would have been $100 billion more than they are today,” adding that with that much money, “we could have initiated a lot of projects.”

Iran’s financial crisis was exacerbated after US President Donald Trump signed a resumption of US sanctions in 2018.

In the first year of the withdrawal, the US administration imposed severe sanctions in two stages, which led to the withdrawal of foreign companies from commercial contracts with Iran.

Days before the first anniversary of the signing of the withdrawal decree, the US administration froze exemptions for eight countries importing Iranian oil in order to prevent Iran's exports entirely and force Tehran to accept an agreement that includes new restrictions on its nuclear program.

Iran had exported about two and a half million barrels per day (bpd) before the US sanctions, and the country’s crude oil exports shrunk more than 80 percent after the resumption of sanctions.

Last month, Rouhani presented a draft government budget worth about $39 billion to parliament, indicating that it was prepared to resist US sanctions by reducing oil dependency.

Initial reports from local news agencies stated that the budget appeared to depend on oil sales ranging from 500,000 to one million bpd. Analysts estimate that Iran's exports have tumbled to around 400,000 bpd or less.

In November, head of Iran's Budget and Planning Organization Mohammad Baqer Nobakht announced that the government expects to generate $10 billion-$12 billion from direct sale of oil in 2020.

Iran would need oil priced at $194.6 a barrel to balance its budget, the International Monetary Fund (IMF) said.

The Fund expected Iran to have a fiscal deficit of 4.5 percent in the year 2019-2020 and 5.1 percent in 2020-2021.

Analysts say Iran may have been forced to sell crude at a level lower than normal as it seeks to attract buyers worried about violating the US sanctions.

Iran’s oil exports in November dropped to 213 barrels per day and the country is currently exporting 100-300,000 bpd, according to data Kpler oil tanker tracking and intelligence firm.

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