Iran Sanctions
Abstract
The principal objective of international sanctions to compel Iran to verifiably confine its nuclear program to purely peaceful uses has not been achieved to date. However, a broad international coalition has imposed progressively strict sanctions on Iran s oil export lifeline, adversely affecting Iran s economy to the point where key Iran leaders are considering the need for a nuclear compromise. Among the key causes of Iranian leaders worry: Oil exports provide about 70% of Iran s government revenues and Iran s oil exports have declined to about 1.25 million barrels per day as of December 2012, a dramatic decline from the 2.5 million barrels per day Iran exported during 2011. The main cause of that drop has been a European Union embargo on purchases of Iranian crude oil that took full effect on July 1, 2012. This embargo is coupled with decisions by several other Iranian oil customers to substantially reduce purchases of Iranian oil in order to comply with a provision of the FY2012 National Defense Authorization Act (P.L. 112-81). To date, twenty countries have been deemed in compliance. The loss of sales has caused Iran to reduce oil production to about 2.6 million barrels of day, from the longterm baseline close to 4 million barrels per day. Other oil producers, particularly Saudi Arabia, are selling additional oil to Iran s customers, thus far preventing the lost Iranian sales from raising world oil prices. The loss of hard currency revenues from oil coupled with the cut off of Iran from the international banking system and the decline of Iran s foreign exchange reserves caused a collapse in the value of Iran s currency, the rial, in early October. That collapse prompted street demonstrations and a halt to commerce by merchants who are uncertain how to price their goods. In response, Iran has tried to impose currency controls and arrested some illegal currency traders, although these steps are unlikely to restore public confidence in the regime s economic m
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 07, 2012
- Accession Number
- ADA584559
Entities
People
- Kenneth Katzman
Organizations
- Library of Congress