US blockade chokes oil revenues as military buildup adds pressure on Tehran
Dubai: Iran is coming under intensifying pressure on two fronts as President Donald Trump tightens the economic squeeze on Tehran while simultaneously building up US military firepower in the Middle East.
The strain is increasingly visible inside Iran, where oil exports have been severely disrupted, the rial has plunged and the cost-of-living crisis is deepening.
In a rare acknowledgement of the severity of the situation, Iran’s national security adviser Mohsen Rezaei warned on Saturday that the rapidly deteriorating economy had pushed the country into one of the most difficult periods in its history.
A day later, Oil Minister Mohsen Paknejad resigned, leaving National Iranian Oil Company chief Hamid Bovard to take over temporarily at a time when the US naval blockade has largely prevented Iran from exporting its most important source of revenue.
Iran says Paknejad stepped down for personal reasons and there is no evidence that his departure was caused by US pressure. But his exit adds another striking development at a moment when the economic consequences of the seven-month war are becoming increasingly difficult for Tehran to contain.
The rial has fallen sharply since the United States and Israel launched strikes against Iran in February, with its decline accelerating as Washington tightened sanctions and enforced its naval blockade.
A weaker currency has made imports more expensive and compounded a cost-of-living crisis that was already putting pressure on Iranian households.
Signs of the strain are increasingly appearing in everyday life.
Government and private-sector employees, including nurses and teachers, have taken to social media in recent days to say they were leaving jobs because their salaries were no longer enough to support them. Iranian media have also reported protests by retired government employees who say they have not received their full pensions.
The blockade has added another layer of pressure by severely restricting Iran’s ability to export oil and earn foreign currency.
Iran loaded only about 220,000 to 255,000 barrels per day of crude and condensate in August, according to estimates cited in reports, down dramatically from roughly two million barrels per day in March.
That is particularly damaging because oil has long provided Tehran with a crucial stream of foreign revenue.
Paknejad’s departure is notable partly because of what he had promised only months earlier.
In July, the oil minister said Iran would continue exporting crude despite US sanctions.
Now Bovard takes over an industry struggling not merely with sanctions but with a physical blockade that has made getting fresh Iranian crude to customers far more difficult.
Iran initially kept deliveries flowing using millions of barrels already stored aboard tankers outside the blockade. But those stocks have been running down.
A change at the top of the Oil Ministry cannot solve that fundamental problem.
Bovard can change management, sales arrangements and the way sanctioned oil is marketed. He cannot lift a US naval blockade or guarantee Iranian tankers access to their biggest customers.
At the same time that Washington is squeezing Iran economically, it is increasing military pressure.
The United States is deploying additional troops and naval forces towards the Middle East, expanding the military options available to Trump as diplomacy with Tehran remains stalled.
The combination puts Iran under pressure from two directions: Washington is constricting the revenues Tehran needs to sustain its economy while increasing the military forces available to confront it.
There is increasingly clear evidence that the economic pressure is biting.
Iran’s oil exports have plunged, its currency has weakened sharply and strains over wages, pensions and living costs are becoming more visible.
Rezaei’s unusually stark assessment is particularly significant because it comes from inside Iran’s national security establishment rather than from Washington or outside analysts.
But there is an important distinction between inflicting economic pain and achieving a political objective.
Tehran has not accepted Washington’s terms, and Iranian officials continue publicly to resist US demands.
The next question is therefore not whether Iran is feeling the pressure. Its own officials are now acknowledging that it is.
The question is whether Trump’s combination of economic and military pressure will force Tehran to change course.
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