Iran Admits Western Sanctions Are Inflicting Damage

[yahya07]

Iran Admits Western Sanctions Are Inflicting Damage

Iran’s veneer of stoicism toward the Western sanctions that have disrupted its economy showed some new strains on Monday, as the deputy oil minister acknowledged a decline in domestic petroleum production because of dwindling foreign investment, and four-year-old talks between the Iranians and Poland’s biggest natural gas developer collapsed.

The Iranians also suffered an embarrassment after prematurely announcing that a Russian oil company had committed $1 billion to help revive a dormant oil field in Iran’s southwest. Hours later, the Russian company, Tatneft, denied on its Web site that a deal had been signed. And there were signals that Saudi Arabia, which Iran had confidently predicted last week would not increase oil production to compensate for any Iranian shortfall caused by the sanctions, was becoming increasingly irritated with Iran.

Together, the developments portrayed Iran, with the world’s fourth-largest oil reserves and second-largest natural gas reserves, as struggling more than it had admitted from the effects of the Western sanctions, despite its official denunciations of them as desperate measures doomed to fail or backfire.

The sanctions, imposed to pressure Iran into ending its suspect nuclear program, were strengthened last month, with the possibility of more onerous restrictions on Iran’s central bank and oil industry looming from the United States and the European Union. Under a measure that is likely to be signed into law by President Obama, foreign entities that do business with Iran’s central bank, the conduit for Iran’s oil revenue, could face severe penalties if they do business in the United States.

Iran’s deputy oil minister, Ahmad Qalebani, appeared to have made an unusual disclosure about the effects of sanctions in an article reported by the official Iranian Students’ News Agency, which quoted him as saying Iran’s crude oil production in 2011 had declined from the year before. He said the decline was “due to lack of investment in oil field development.”

Iran produced about 4 million barrels a day of oil in 2010 and is producing about 3.5 million barrels this year.

Mr. Qalebani’s disclosure followed recent warnings by other Iranian officials that the effects of sanctions had become more acute. The foreign minister, Ali Akbar Salehi, was quoted by the official Islamic Republic News Agency as saying, “We cannot pretend the sanctions are not having an effect.” The governor of Iran’s central bank, Mahmoud Bahmani, told reporters in Iran last week that the country must act as if it were “under siege,” Agence France-Presse reported.

The collapsed talks on a deal with Polskie Gornictwo Naftowe i Gazownictwo, a leading developer and distributor of natural gas, involved the Lavan natural gas field in the Persian Gulf, one of Iran’s largest deposits. Iran’s semiofficial Mehr News Agency said the Polish company would be replaced by a consortium of Iranian companies. It was unclear precisely why the talks failed, but the withdrawal of the Polish company clearly reflected the new pressures on foreign companies not to engage in commitments with Iran.

Even Russia, which has strongly opposed the Western sanctions against Iran, appeared to be backtracking on a deal after Iranian news agencies said Tatneft had signed a $1 billion agreement to develop the Zagheh field in southern Iran. The company said in a statement that it had “not entered into any agreements, contracts” and had “not accepted any other undertakings relating to oil and gas projects in Iran.”

Additional pressure aimed at Iran came from Saudi Arabia, Iran’s wary neighbor and oil-producing rival. Saudi Arabia’s King Abdullah, in remarks clearly aimed at Iran, told a meeting of the Gulf Cooperation Council, a six-member group of Arab oil producers, “No doubt you all know that we are targeted in our safety and security.”

Are the Iranians waiting for the economy to collapse before they capitulate?

 

[fd24]

Iran have had sanctions and the west working against them for decades. They have been constantly criticised for not falling into line. They have attacks made on their scientists for the zionists often resulting in murder. Yet still Iran burn the hearts of Zionists and the USA - Iran must be commended in working so hard to protect and better themselves. All Iranians must be proud at what they have achieved in the last 20 years against all the odds. My heart and prays and admiration for Iran!!

 

[PERSIAN GOD KING]

When did Iran said they dont inflict damage? Iran always says sanctions will not deter Iran.

 

[Harry_Thomason]

Are the Iranians waiting for the economy to collapse before they capitulate?

Iran's economy is in vastly better shape than during the war, and they didnt gave up. Some nations and their leaders have balls, some dont. That said, neither Iran's economy will collapse, nor they'll capitulate.

P.S. I could bet most EU countries economies would collapse faster than Irans

 

[Abii]

When did Iran said they dont inflict damage? Iran always says sanctions will not deter Iran.

this yahya dude doesn't get it
economy collapsing? This isn't Ethiopia buddy.
We've had 15 years of growth without recession and our economy will double by 2016. We're already high middle income country with a trillion dollar GDP (PPP).

the sanctions are simply a hurdle that are stopping us from becoming an economic powerhouse. But even with the sanctions we're still part of the N-11.

 

[Chinese-Dragon]

Sanctions were one of the best things that happened to China.

It forced us to be self-reliant, and it forced us to to improve our indigenous capabilities. Now we are the 2nd largest and the fastest growing major economy in the world.

And Iran already has great indigenous capabilities. Sanctions will only make them stronger.

 

[canadian icehole]

Please note that this article was from the New York Times. It would be interesting to see if any innovations come out of Iran due to sanctions.

 

[Fekay]

Iranians are rich,smart and known for their courage; they can take sanctions and most probably come out stronger and less reliant.

 

[gambit]

Sanctions were one of the best things that happened to China.

It forced us to be self-reliant, and it forced us to to improve our indigenous capabilities. Now we are the 2nd largest and the fastest growing major economy in the world.

And Iran already has great indigenous capabilities. Sanctions will only make them stronger.

Aaahhh...No...Your argument is valid only if there were no foreign direct investments (FDI). In other words, not only sanctions but your own miserable economic situation compelled you to change your ways enough that we lifted a lot of sanctions and that allowed you to grow -- we helped you.

 

[Chinese-Dragon]

We helped you.

Oh yes you did. So next time, remember who was complicit in the rise of China.

Next time you complain about China's currency manipulation causing millions of Americans to lose their jobs, remember that it was you and your countrymen who fed the dragon.

And yet... you still continue to feed us with hundreds of billions of dollars in trade and investment every single year.

 

[TruthSeeker]

As Further Sanctions Loom, Plunge in Currency’s Value Unsettles Iran

By RICK GLADSTONE, Published: December 20, 2011

Iran’s currency, the rial, tumbled in value to its lowest level ever against the dollar on Tuesday in panic selling caused in part by the country’s increased economic isolation from international sanctions, an unbridled inflation problem and worries that government officials there are ideologically incapable of devising a workable solution.

The rial’s value has been weakening for months, but the traumatic drop on Tuesday reflected what Iranian economists called a new level of economic anxiety in the country, exacerbated by conflicting information coming out of the Tehran hierarchy that reinforced a sense of indecision and confusion.

A report in Iran’s state-run news media that the government had decided to suspend trading relations with the United Arab Emirates in retaliation for that country’s support of American sanctions on Iran — denied later by Iran’s vice president — apparently contributed to a rush by Iranian merchants and trading companies to sell their rials for other currencies. The United Arab Emirates is a major gateway for Iran’s exports.

“This is the most serious financial crisis they’ve faced, with multiple things coming to a head,” said Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and an authority on Iran’s economy. “I have the feeling that really nobody is in charge of economic policy, nobody who can quickly think on their feet.”

By day’s end, Iran’s Fars News Agency was reporting that it cost 15,150 rials to buy one dollar in Tehran, compared with 13,400 rials to the dollar a few days earlier. In late October, it cost about 7,000 rials to buy one dollar in the capital city, which means the Iranian currency has plunged in value by more than 50 percent against the dollar in the past few months.

The currency crisis could hardly come at a worse time for Iran, which has been pummeled economically by the cumulative effects of four rounds of United Nations Security Council sanctions, as well as sanctions imposed by the United States, Canada and the European Union over the country’s suspect nuclear energy program.

An increasing number of international companies are no longer willing to engage in new business with Iran; the European Union has talked about imposing a boycott on Iran’s oil, its major export; and the Obama administration is expected to enact a harsh law soon that could severely penalize banks in friendly countries that do business with Iran’s Central Bank. Officials in Iran have spoken more frankly in recent days about the destructive impact of Iran’s isolation.

The United States Treasury Department added to the pain on Tuesday, putting 10 companies based in Malta on a blacklist for acting as front companies for the Islamic Republic of Iran Shipping Lines, which has already been blacklisted. The Treasury said in statement that it took the action because the Iranian shipping line and its subsidiaries “have increasingly relied upon multiple front companies and agents to overcome the impact of U.S. and international sanctions and increased scrutiny of their behavior.”

The rial’s loss in value partly reflects the impact of a stubborn inflation problem in Iran, caused in part by the government’s phasing out of subsidies for fuel and other staples that has caused prices to rise sharply. To cushion the impact on Iranian consumers, the government distributed cash payments, which in some ways worsened the inflation problem by increasing the supply of rials in Iran. Iran’s official news media have said the inflation rate was about 20 percent, although outside estimates were higher.

Economists said the Iran government is hampered in its ability to control inflation partly because of Islamic prohibitions on charging interest, which prevents banks from offering attractive rates that would encourage Iranians to keep their money in savings accounts. Such a step would take money out of circulation.

Some said the catalyst on Tuesday for the panic selling of rials in Iran was an announcement carried by the semiofficial Mehr News Agency that Iran had temporarily stopped imports from the United Arab Emirates “as a punitive measure” because its government had expressed support for the Western sanctions.

Later in the day, Vice President Mohammad-Reza Rahimi was quoted by Mehr as saying that the earlier announcement was an overstatement, and that Iran had only issued a warning because “the U.A.E. has done something, under the pressure of America, which does not hurt the U.S. but hurts itself.” He was further quoted as exhorting the Emirates leaders to “not succumb to American pressure.”

http://www.nytimes.com/2011/12/21/w...nge-roils-iran-as-further-sanctions-loom.html

 

[gambit]

Oh yes you did. So next time, remember who was complicit in the rise of China.

Next time you complain about China's currency manipulation causing millions of Americans to lose their jobs, remember that it was you and your countrymen who fed the dragon.

And yet, you still continue to feed us with hundreds of billions of dollars in trade and investment every year.

Good...Then this completely debunk the argument that somehow China made it on her own.

 

[TruthSeeker]

Diplomats agree to increase pressure on Iran

By Roberto Landucci and Philip Pullella
ROME | Tue Dec 20, 2011 3:58pm EST

(Reuters) - Diplomats from the United States, the European Union and other allies agreed on Tuesday to step up pressure on Iran to force it to resume talks over its nuclear program, an Italian diplomatic source said.

The diplomats from the so-called "group of like-minded nations" met in Rome to discuss further sanctions against Iran, which could include a possible EU oil embargo.

The closed-door meeting took place under the auspices of the Italian foreign ministry.

Diplomats said earlier it would consider the arguments around a possible EU oil embargo against Iran. A decision may be made when EU foreign ministers next meet in January.

Participants were countries that have imposed bilateral sanctions on Iran over its nuclear program that go beyond U.N. Security Council sanctions.

The group includes the United States, the European Union and several European nations, Australia, Japan, South Korea and other countries but it was not clear if all of them were represented. The United States attended.

The small informal group has been meeting for two years and its goal is to share information and discuss the next steps in the sanctions process.

The United States has long banned Iranian crude oil imports and last week Congress voted through restrictions on dealing with the Iranian central bank.

The White House must decide whether or not to grant waivers to major Iranian oil importers like China, India and South Korea that need to deal with the bank to pay for Iran's crude.

In Vienna, an Iranian envoy said Teheran had invited the U.N. nuclear watchdog to visit for talks and would be ready to discuss concerns about its disputed atomic ambitions.

Western diplomats tend to see such invitations as attempts by Iran, a major oil producer, to buy time and ease international pressure without heeding U.N. demands to curb nuclear work which could be used for making atomic bombs.

Previous visits to Iran by senior IAEA officials have failed to make significant progress towards resolving the long-running row over Iran's nuclear program, a dispute which has the potential to spark a wider conflict in the Middle East.

Diplomats agree to increase pressure on Iran | Reuters

 

[Chinese-Dragon]

Good...Then this completely debunk the argument that somehow China made it on her own.

Our rise was inevitable considering the demographics.

America helped to speed up the process. As usual, America shoots herself in the foot.

But please... do continue to send us hundreds of billions of dollars of your own money every single year. Your politicians don't want to stop the flow of money outwards, so this great trend will continue for the foreseeable future.

 

[TruthSeeker]

US expands sanctions against Iranian shipping sector

By Associated Press, Updated: Tuesday, December 20, 3:48 PM

WASHINGTON — The Obama administration is expanding sanctions against Iran’s shipping center as it steps up efforts to isolate the country from the international financial system.

The Treasure Department on Tuesday added 10 Iranian shipping companies and a shipping executive to a black list that freezes any assets they may have U.S. jurisdictions and bars Americans from doing business with them. The companies are affiliates of Iran’s state-owned shipping line, IRISIL, which is already subject to U.S. sanctions for activity related to Iran’s missile programs and transporting military cargoes.

The executive and the companies, including a joint venture between IRISIL and an Indian shipping company known as Irano Hind, are all based in Malta. Treasury alleges that they have all tried to help IRISIL avoid previous sanctions by serving as front operations.

US expands sanctions against Iranian shipping sector - The Washington Post