US Iran tensions: Trump administration pressure campaign weakens Tehran currency

Muhammad Asghar | GlobalBeat

U.S. sanctions have pushed Iran’s currency to record lows and slashed oil exports to below 500,000 barrels per day according to shipping data.

The Iranian rial traded at 580,000 to the dollar on the unofficial market Tuesday, down from 420,000 in January.

Washington imposed banking restrictions in 2018 after withdrawing from the 2015 nuclear deal. European companies largely complied despite EU political opposition. Tehran’s regional influence faces mounting economic constraints at home.

Iran’s oil exports totaled 485,000 bpd in March, tanker tracking firm Kpler reported. That marks a 70 percent drop from 2018 levels of 2.5 million bpd.

“The sanctions are working better than expected,” a U.S. Treasury official told reporters on condition of anonymity. Washington has targeted Iran’s central bank, oil sector, and metals trade.

Tehran’s foreign currency reserves fell to $80 billion from $120 billion in 2018 according to IMF estimates. The central bank restricted hard currency withdrawals to $2,000 per person annually.

Inflation reached 47 percent in March, Iran’s statistics agency reported. Basic food prices rose 60 percent year-over-year. Chicken prices increased 80 percent, cooking oil 70 percent.

Trump administration officials point to regional policy changes. Iran reduced funding to allied militias in Iraq and Syria by 30 percent according to U.S. intelligence estimates.

“They’re having to make tough choices between butter and guns,” Secretary of State Mike Pompeo said at a briefing last week.

Background

President Trump withdrew from the Iran nuclear deal in May 2018, calling it “defective at its core.” The accord had lifted sanctions in exchange for curbs on Tehran’s nuclear program. Washington reimposed banking, energy, and shipping sanctions in phases.

Iran responded by breaching nuclear limits starting in 2019. Tehran now enriches uranium to 60 percent purity, near weapons-grade levels. European powers triggered a dispute mechanism in 2020 but failed to restore sanctions relief.

What’s Next

The UN conventional arms embargo on Iran expires in October 2025. Washington seeks to extend it through a Security Council resolution. Tehran threatens to expel nuclear inspectors if European powers back the U.S. position.

Negotiations between Washington and Tehran remain stalled. Biden administration officials say sanctions will stay until Iran returns to nuclear compliance. Iranian officials demand U.S. guarantees that no future president will abandon a new deal.