Iran’s economy battered by US sanctions

Ali Ragab

The US Treasury Department has announced sanctions against Iran’s Persian Gulf Petrochemical Industries Company (PGPIC) as part of a series of moves to pressure Tehran to negotiate a new agreement to restrict its nuclear and ballistic-missile programs.

The sanctions announced on June 7 hit PGPIC and 39 subsidiaries and foreign-sales agents. The company accounts for 40 percent of Iran’s petrochemical-production capacity and 50 percent of its petrochemical exports.

The Treasury Department statement said PGPIC was providing financial support for a company controlled by the Islamic Revolutionary Guards Corps (IRGC), which was previously designated a “foreign terrorist organization.”

It said Iran’s Oil Ministry in 2018 awarded Khatam al-Anbiya, the IRGC’s economic and engineering arm, 10 projects in the oil and petrochemical industries worth $22 billion, four times the official budget of the IRGC.

“This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC,” Treasury Secretary Steven Mnuchin said in a statement.

“It was only necessary to wait one week until the claim of the president of America about talks with Iran were proven to be hollow,” Iranian Foreign Ministry spokesman Abbas Mousavi said in a statement. “The American policy of maximum pressure is a defeated policy.”

The World Bank in its Global Economic Prospects put Iran at the bottom of its 2019 economic growth (Gross Domestic Product) country rankings, according to Radio Farda.

In mid-2018, the World Bank forecast a 4.1 percent growth for Iran in 2019, but only months later in January it revised the figure to a 3.6 percent negative growth and now it has reduced the number to minus 4.5 percent.

The main reason for Iran’s negative growth cited in the report is U.S. sanctions, especially the ban on Iran’s oil exports, which chocks off the country’s revenues and the ability of its government to finance projects and pay for subsidies.

Dr. Mohamed Benayah, an expert on Iranian affairs, said the new US sanctions on the Iranian petrochemical sector have tightened the noose on Tehran’s mullah regime.

“Targeting the Iranian petrochemical sector is a blow to the Revolutionary Guards Corps. The oil sector is a key resource for Iran’s military and strategic projects,” Benayah told THE REFERENCE.

He added that the US sanctions would force the mullah regime to give in to Washington’s demands.