TEHRAN: Iran’s foreign trade has fallen by nearly 35% as the war with the United States enters its sixth month, with Tehran facing mounting economic pressure from US sanctions, restrictions on shipping and a prolonged standoff over the Strait of Hormuz.
Iranian President Masoud Pezeshkian said exports and imports had declined by about 35% because of US sanctions and a naval blockade of Iranian ports. He added that Iran had managed to sell around 90 million barrels of oil during a short-lived June memorandum of understanding that temporarily allowed Iranian oil exports.
How is Iran responding to growing economic pressure?
Iranian leaders have increasingly acknowledged the impact of the conflict on the country’s economy. Supreme Leader Ayatollah Mojtaba Khamenei called on the government to address inflation, unemployment and rising prices, according to a statement attributed to him.
The comments came as Iran’s annual inflation reached 66% last month, adding to pressure on the government as Washington intensifies its economic campaign against Tehran.
The US administration has warned countries to reduce business ties with Iran or risk secondary sanctions. Washington, however, has so far avoided imposing penalties on major Iranian trading partners such as China and India, moves that could also affect the US and global economies.
The US Treasury Department recently sanctioned Egypt’s Banque Misr over business dealings with Tehran and proposed restrictions that would prevent its UAE branches from accessing dollar transactions. Egypt’s central bank said the measure was limited to Banque Misr UAE’s US dollar transactions with correspondent banks.
The Treasury also announced sanctions against a Hong Kong-based entity and an individual linked to Iran’s Bank Melli.
Can diplomacy resolve the Strait of Hormuz standoff?
Diplomatic efforts to revive negotiations have continued as the conflict remains deadlocked.
Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani met Iranian officials in Tehran on Thursday and stressed the need to restore open shipping through the Strait of Hormuz, according to Iranian and Qatari officials.
Iranian Foreign Minister Abbas Araqchi described the discussions as “creative” on Friday.
Qatar and Pakistan helped broker the June memorandum of understanding between Washington and Tehran, which produced a brief ceasefire before disagreements over the Strait of Hormuz contributed to its collapse.
The strategic waterway remains a major point of confrontation. US military commanders say American forces have cleared sea mines laid by Iran’s Islamic Revolutionary Guard Corps, while the IRGC Navy has rejected US claims that the strait is open without restrictions.
Preliminary shipping data released Friday showed only seven commodity vessels crossed the Strait of Hormuz on Thursday, compared with 17 the previous day and a 10-day average of 15.
With negotiations at an impasse and Washington expanding its economic pressure campaign, Iran faces growing challenges in maintaining trade and managing domestic economic hardship while continuing its confrontation with the United States.