A year of US 'maximum pressure' on Iran: Who wins, who loses?

Stand firm against the "storm"

After withdrawing from the Iran nuclear deal in May 2018, four months later the US government applied a series of sanctions with the aim of isolating Iran's economy, forcing the country to sit at the negotiating table with the US to re-sign an agreement "according to" President Donald Trump.

Over the course of a year, Iran has suffered severe “shocks” from international economic isolation. Its oil exports have plummeted from 2.4 million barrels per day in April 2018 to less than 500,000 barrels in September 2019. The Islamic nation’s economy has entered recession, inflation has skyrocketed, and the currency has lost 60% of its value against the dollar. The US government has presented these statistics as evidence that the sanctions have been successful. However, looking at it from other angles, it can be seen that Iran’s economy is not so “crippled”.

An Iranian oil refinery. Photo: NBC

Despite the damage, the International Monetary Fund (IMF) and the World Bank predict that Iran's economy will recover from recession to near-zero growth in 2020. The IMF further forecasts that Iran's inflation will fall from 35.7% in 2019 to 31% in 2020. Labor force participation and employment continue to increase. Financial institutions expect Iran's GDP in 2020 to be similar to 2015, meaning that the country can fully withstand US pressure next year.

This is certainly not thanks to the “hidden” support of European countries, because France and Germany have not yet found effective measures to help Iran continue to maintain the nuclear agreement. According to assessments, Iran can survive thanks to the diversification of its economy - a feature that Washington seems to ignore. In 2017, crude oil accounted for only 43% of the value of Iran's exports, while neighboring Saudi Arabia's was 78%. For this reason, Iran's industrial, service, agricultural and non-oil sectors can survive in the context of declining oil revenues due to sanctions. Non-oil sectors generate the majority of economic output and jobs for Iran.

Supporters of Iran's Supreme Leader Khameini in Tehran, November 2019. Photo: Reuters

Apart from the economy, it can be seen that another goal of the US “maximum pressure” campaign is to reduce Iran’s role in the region. But in reality, Iran still maintains its inherent position. The “handshake” with Russia and Türkiye to discuss Syrian politics has helped Tehran play an indispensable role in this “hottest” issue in the Middle East. Last month, the Trump administration announced its withdrawal from Syria, leaving a “vacuum” that Iran and its allies have the opportunity to fill. In addition, Iran is still present in Yemen and Lebanon and there is no sign that they will withdraw from here.

Obviously, in terms of both economy and position, Iran still maintains despite facing no small pressure from the US.

America failed?

Iran has withstood a year of maximum pressure, which means that President Donald Trump’s policy has been ineffective, if not a failure. It seems that in his plan to implement the pressure strategy with Tehran, Mr. Trump had calculated that in order to push tensions to a climax, he would then “cool down” them through diplomatic dialogue, like the case with North Korea. But the reality did not go as planned. The climax was pushed when Tehran shot down a US drone, but in the end, Mr. Trump managed to “withdraw” his hand from the “attack” button on Iran at the last minute.

Iran's Supreme Leader Ayatollah Ali Khamenei has said there will be no dialogue with the US until Washington lifts sanctions. Photo: Getty

Everyone understands that the 45th President of the United States does not prioritize military confrontation, what he aims for are negotiations to produce agreements that are "beneficial" to the United States.

However, the strategy of forcing the opponent to the dialogue table when “their strength is exhausted” has not been successful, at least in the case of Iran. So far, after dozens of sanctions, Tehran still refuses to talk to the US. In a recent statement, Iran’s Supreme Leader Ayatollah Ali Khamenei announced the suspension of all plans for diplomatic contact with the US. Iran’s reluctance to talk is considered a very strong reaction after US President Donald Trump expressed his desire for a new nuclear deal that is more favorable to the US than the 2015 deal.

Along with the tough statement, Iran also affirmed that it will enrich uranium to 5% at the underground Fordow nuclear facility, and affirmed that Tehran has the capacity to enrich uranium to 20% if necessary. This is a response after the US on November 4 imposed sanctions on 9 people related to Iran's Supreme Leader, Ayatollah Ali Khamenei, including the Chief of Staff of the Supreme Leader and the head of Iran's judiciary.

US Treasury Secretary Steve Mnuchin announced sanctions on nine people close to Iran's supreme leader on November 4. Photo: Reuters

That reaction shows that Iran is not passive and at a disadvantage against Washington, but on the contrary, is ready to "retaliate" if the Trump administration continues to apply pressure.

For its part, the US may find it difficult to push the confrontation with Iran any further, especially in the context of an approaching election year. President Donald Trump is busy with troubles related to the possibility of being impeached. In foreign affairs, Mr. Trump's top priority is probably to reach a trade agreement with China - a plan that can "brighten" his record before the election.

This does not mean that the US-Iran issue will ease. Iran has spent a year defending itself against US sanctions. If the remaining parties do not support Iran as committed, the country may use Articles 26 and 36 of the JCPOA to reduce its commitments under the agreement. Then things will enter a new chapter of tension and no one can guarantee how much instability will occur.

Iran's Islamic Revolutionary Guard Corps (IRGC). Photo: AFP