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U.S. Sanctions Have Cost Iran $200 Billion

President Hassan Rohani made the comments while launching a railway project near Tehran on December 31.

"Iran would have earned $200 billion surplus income...if the country were not involved in an economic war," he said.

The United States imposed new sanctions against Iran after Washington abandoned the 2015 nuclear deal in which Iran agreed to curb its controversial nuclear program in exchange for sanctions relief and other incentives.

The U.S. sanctions on Iran’s oil industry and exports have significantly cut Iranian oil exports, as the United States ended in May all waivers for all of Iran’s oil buyers and is going after anyone dealing with Iranian oil.

Since the United States abandoned the deal in 2018, Iran has lost 90 percent of its oil exports, a key source of revenue. Its currency has plummeted, and inflation has surpassed 40 percent.

Rohani also questioned arguments from hardline conservatives who criticize him and who say that the sanctions have not affected Iran.

"What should we do? When there is no food and water, you are still in danger no matter how strong you are," he said.

Rohani's comments came just weeks after millions of Iranians protested against economic hardships, inequality, financial corruption, and discrimination following a gas price hike in November.

By RFE/RL

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  • Mamdouh Salameh on January 02 2020 said:
    If it is true that Iranian President Rouhani made such an exaggerated claim, then he is indirectly hitting back at the hardliners who have been accusing his government of mismanaging the economy in the face of US sanctions.

    According to the authoritative 2019 OPEC Annual Statistical Bulletin, Iran produced 3.55 million barrels a day (mbd) of oil in 2018 and exported 1.85 mbd. Based on an average oil price of $60, this means that Iran earned $40.52 bn. Moreover,US sanctions were imposed on Iran in March 2018.

    By comparison, Iran’s oil revenue in 2017 was estimated at $46.54 bn based on average exports of 2.125 mbd and a price of $60. So Iran’s oil revenues in 2018 were 13% or $6 bn less than in 2017.

    Assuming Iran lost 90% of its oil exports (which in itself a huge improbability given the failure of the sanctions), then one would assume that Iran’s oil exports in 2019 would have been 10% of the 2018 exports, namely 185,000 barrels a day (b/d) meaning that Iran would have lost $39.19 bn in 2019.

    Adding Iran's losses in 2018 and 2019 we come to a figure of $45 bn. So Iranian President Rouhani’s figure of $200 bn loss of revenue since the sanctions were imposed is absolutely incorrect.

    And since major buyers of Iran’s crude oil, namely China, India, the European Union (EU) and Turkey who account for 86% of Iranian crude oil exports have never stopped buying Iranian crude despite the sanctions, we can safely assume that Iranian oil exports in 2019 averaged 1.591 mbd. Iran must have, therefore, earned around $34.84 bn, a mere $5.68 bn less in 2018. This means that total Iranian revenue losses in both 2018 and 2019 were $11.68 bn or 5.84% of President Rouhani’s figure.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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