By Geoff LaMear
The United States and Iran remain at an impasse over the nuclear issue two months into President Biden’s administration. Secretary of State Antony Blinken has stated that the United States will only provide sanctions relief after Iran returns to full compliance with the 2015 nuclear deal, while Iranian Foreign Minister Javad Zarif recently stated that Iran will not budge before the U.S., whose policy rests on the assumption that Iran can be forced to capitulate. This assumption is faulty.
The economic impact of sanctions are diminishing as Iran adapts, echoing Iranian Supreme Leader Ali Khamenei’s call for a “Resistance Economy” able to withstand sanctions. Iran’s domestic manufacturing is up. Iran’s currency depreciation has likewise accelerated the shift towards economic autarky, with domestically manufactured goods replacing costly imports.
As sanctions continue, U.S. leverage will wane as Iran’s economy adapts. Iran’s oil revenues are down, but focus on this ignores that oil revenues now account for only 15 percent of GDP, meaning Iran is less oil-reliant than Saudi Arabia or even Texas. Iran has also turned to China and Venezuela to buy its oil exports to evade sanctions.
This piece was originally published in The American Conservative on March 23, 2021. Read more HERE.