The bad news just keeps building on the sagging shoulders of the mullahs in Tehran as economic body blows continue to rain down as U.S. economic sanctions are resetting global commerce and finance around the embattled religious
While the U.S. has rolled out economic sanctions in waves in
response to its pullout from the Iran nuclear deal, the hammer of sanctions on
Iran’s oil industry are being felt as petroleum markets are becoming roiled at
the expected shortfall and impact of secondary U.S. sanctions on any country or
company trading in Iranian oil.
Iran’s crude oil exports plunged to 1.1 million bpd in the
first seven days of October, sliding further down from 1.6 million bpd in September
as sanctions loom just four weeks away, Reuters reported
on Monday, citing tanker tracking data and an industry source tracking
Tanker shipments may vary week to week in a month, but the
very low volumes in early October may suggest that Iran’s crude oil exports are
taking a hit and are falling faster than the market had expected just two-three
According to Refinitiv Eikon tanker tracking data quoted by
Reuters, not a single Iranian-flagged tanker headed to Europe in the first
seven days of October, but Iran’s tankers were bound for China, India, and the
Middle East in the first week this month, according
to the data.
Oddly enough, according to S&P Global Platts trade flow
data, a dozen Iranian oil tankers may have shut off their position devices last
month. Nearly 207,000 bpd of Iran’s oil exports that left Iranian oil terminals
last month is reportedly unaccounted for, because of switched-off transponders
as the regime seems to be reverting to black market tactics to smuggle its oil
But those tactics are less likely to aid the Iranian people
and more likely to generate illicit profits to continue lining the pockets of
the mullahs and their families.
The move to smuggle oil in advance of sanctions comes as the
Tehran Stick Exchange suffered heavy losses recently. The market however,
posted its fourth straight decline–and one of its biggest in recent history– on
Sunday, with the benchmark TEDPIX index ending the day 4.16% lower, taking the
market below the 180,000 level it had boasted just days ago.
Head of the Securities and Exchange Organization, Shapour
Mohammad offered his take on the reasons behind the market’s rout, saying that
crowd behavior, manifested in the irrational thinking of some investors carries
The uncertainty in Iran’s financial markets mirrored the
wild devaluation of Iran’s currency and the concerns of Iranian business owners
and workers as they see the regime continue to spend scarcer cash reserves in
fueling its wars in Syria and Yemen, including launching missile barrages in
Syria in retaliation for recent attacks at a military parade.
The growing lack of cash reserves has the mullahs casting
about wildly for money left under some errant stone.
This included a claim by the Iranian regime to try and recover
billion in national bank assets seized by U.S. courts. The U.S. on Monday
asked judges at the International Court of Justice to throw out the claim by
The U.S. Supreme Court ruled in 2016 that the assets must be
turned over to American families of victims of the 1983 bombing of a U.S.
Marine Corps barracks in Beirut, among others who were killed in
Iranian-planned terrorist attacks.
“The actions at the root of this case center on Iran’s
support for international terrorism,” Richard Visek, legal adviser to the U.S.
Department of State, said on Monday, calling on the court to reject Iran’s suit.
Meanwhile, the European Union continued its quixotic
campaign to try and throw an economic lifeline to Iran. Last
month, Brussels provided Tehran with billions of dollars worth of aid to
help offset the impact of US sanctions. The bloc agreed to establish an alternative payment system between European and Iranian banks
that is designed to skirt the U.S. financial system entirely.
Patrick Pouyanné, the chairman of the French oil giant
Total, told a conference last week in Moscow that even the hint of seeing their
assets frozen in a U.S. bank would be too high a price. To be blunt, it would
be downright suicidal for companies to take on the U.S. when the benefits of
doing so — maintaining trade with Tehran — is a drop in the barrel compared to
what the American market provides, according
to The Spectator.
Sanctions experts have concluded that Brussels is
essentially banging its head against the wall, hoping that their sheer
persistence will force the Trump administration into backing down or finding
some type of compromise arrangement. But unfortunately for them, businesses
will do what’s best for their balance sheets, not what’s convenient for
European politicians, wrote Daniel R. DePetris in The Spectator.
In an example of how much pressure the Iran regime is under
came in the form of the Iranian parliament’s passage
of new measures allegedly designed to halt funding terrorism and move
Tehran closer to global norms and standards in the fight against terror.
The measures, which allow Iran to join a convention against
the funding of terrorism (CFT), still have to be approved by a clerical body
before they become law.
Tehran says it has been trying to implement international
standards against money laundering and the funding of terrorism set by the
Financial Action Task Force (FATF), but it has struggled to get the measures
passed, according to Reuters.
Its parliament has opposed legislation aimed at moving
toward compliance with FATF standards, arguing it could hamper Iranian
financial support for allies such as Lebanon’s Hezbollah, which the U.S. has
classified as a terrorist organization.
The fact that the Iranian regime is even willing to contemplate
such a façade is proof how desperate it is to regain some kind of legitimate
status on the global stage. While it’s highly doubtful the regime would ever
truly implement any of these anti-terrorism reforms, the mere debate on them
shows far the mullahs have been backed into a corner.