Iran’s manic swings between blaming U.S. sanctions for its economic woes and demanding immediate rescue from the Europeans, and dismissing those sanctions as an irrelevant trifle, continued on Wednesday as Iranian parliamentary speaker Ali Larijani insisted President Donald Trump has completely failed to intimidate Tehran.
“Trump has failed to put into practice his words (to zero Iran’s oil exports) as many successful countries have decided to confront the U.S. government for its abnormal behavior; of course, it was Iran’s smartness which defeated the wicked man,” Larijani said, as quoted by Iran’s Fars news service.
Fars also quoted Iranian Oil Minister Bijan Namdar Zanganeh’s assurances that “Iran’s oil sales continue under any circumstances” and U.S. sanctions “leave no impact on Iran’s oil sales.”
The Iranians are attempting to weather sanctions by selling oil futures to foreign buyers, essentially pre-purchases of oil Iran cannot ship while the sanctions are in effect. These offers are accompanied by Iran’s assurances that it will continue producing oil at a steady pace, or even increase production – a promise that will prove increasingly difficult to keep since oil cannot be stored indefinitely in ever-increasing quantities.
Fars noted this is a new practice for the Iranian oil industry, which even the Iranian news service conceded will lose at least $150 billion this year from canceled exports, contrary to Larijani and Zanganeh’s assertions.
Iranian Foreign Minister Mohammad Javad Zarif repeated on Wednesday that Iran will not renegotiate the nuclear deal and commanded Europe to work harder at keeping it alive.
“Iran has implemented its part of the deal, and it is necessary for the rest of the world, particularly the EU three, to take actions. They have made very nice statements, but statements do not provide economic benefits for Iran,” said Zarif.
The Atlantic Council on Tuesday took a deep dive into whether Iran can shrug off sanctions on oil as Larijani and other officials claim, and concluded it might not be able to hold out for much longer, as the Iranian budget assumes revenue from 1.5 million barrels per day. It will soon be obliged to tap very painfully into some crucial funds to finance enough social spending to stave off mass public unrest.
On the other hand, the Atlantic Council noted Iran learned how to survive under sanctions before it was lifted by the nuclear deal and might be able to trim its budget enough to survive on rock-bottom export revenues until the next American presidential election, at which point it would hope for a Democrat administration that quickly lifts President Trump’s sanctions.
While Iran works to eke out enough oil sales to remain solvent until 2021, global oil markets continue to display a very muted appetite for sanctioned Iranian oil. Another boom in U.S. shale oil production, combined with minimal damage to the American energy industry from Hurricane Barry, has stabilized the market after jitters over China’s unexpectedly slow economic growth.