While these countries haven’t come close to direct warfare, tensions have impacted many regional conflicts in the Middle East including in Syria, Yemen, and Iraq, and festering instability in countries like Lebanon, Bahrain, and even among the Palestinians.
Israeli Prime Minister Benjamin Netanyahu, who never misses an opportunity to respond in the strongest terms—usually within hours—to any Iranian testing of its ballistic missile capabilities, chose a relatively muted response.
But for all parties of the JCPOA, the key Iranian commodity of interest is crude oil, particularly for Beijing. In 2017, one-third of Iran’s oil exports were sold to China—more than any other country. This relationship between the two countries softens the blow of US sanctions on Iran by giving Tehran a lifeline when facing economic hardship, to an extent.
In an interview with state media, Abbas Araghchi and Iranian Foreign Minister Mohammad Javad Zarif, who is seated next to Araghchi, are both unable to control their laughter at Netanyahu’s latest accusation that Iran is housing a secret warehouse for a nuclear weapons program that Iran, according to the CIA and the International Atomic Energy Agency (IAEA), ended more than a decade ago.
Iran would survive the latest barrage of US sanctions, Zarif insisted, noting President Donald Trump’s relative isolation at last week’s UN General Assembly and efforts by the Europeans and others to devise ways for Iran to continue to sell oil and be paid for it despite US pressure.
The three European countries (also known as the E3) are reportedly pursuing the establishment of a special purpose vehicle (SPV) to evade US sanctions and ostensibly maintain legitimate trade with Iran. The proposed SPV would essentially act as an accounting firm, tracking credits against imports and exports without the involvement of European commercial or central banks. For example, Iran could ship crude oil to a French firm, accumulating credit that could then be used to pay an Italian manufacturer for goods shipped the other way —without any funds traversing through Iranian hands. By using credits instead of cash, the SPV would not require any funds to transfer outside of the European Union (EU). Supporters of the proposal contend the SPV would keep such funds safe from the reach of US sanctions.
It was around 2006 when reports started emerging of a man in his mid-fifties began making the rounds at embassies in Kuwait. He had quite a story. He was going around telling diplomats that he was a descendant of Sheikh Khazal Khan, who had led a failed 1922 Arab uprising against the rule of Iran over Khuzestan, a province in the country’s neglected but oil-rich southwest. He sought to enlist support for his own separatist group, which he promised would help fight the clerical regime in Iran at a time when the administration of George W. Bush was ramping up pressure on Tehran.
On September 26, shortly before he addressed the United Nations General Assembly, Trump wrote on Twitter: “Despite requests, I have no plans to meet Iranian President Hassan Rouhani. Maybe someday in the future. I am sure he is an absolutely lovely man!”
Shortly after the tweet, CNN’s Christiane Amanpour interviewed the Iranian president. During the interview, Amanpour read Trump’s tweet to Rouhani, who with an amused smile dismissed the comment, claiming the US president is “playing with words and will not get us to any solutions.”
The night before US President Donald Trump excoriated the Islamic Republic as “brutal,” “corrupt” and “dictatorial” in a heavily nationalistic and bombastic speech at the General Assembly, the P4+1—Britain, France, Germany, China, Russia and Germany—affirmed their support for the 2015 nuclear accord with Iran and promised a special payment mechanism to allow foreign companies to circumvent sanctions re-instated by the Trump administration.
Meanwhile, there have been reports of some businesses misbehaving: such as in-store hoarding, non-oil exporters refusing to supply export proceeds to the market, and Iranians rushing to shops due to worries over further price hikes.
The national currency, the rial, was the first market that reacted to the threat of unilateral sanctions. Since November 2017, the rial started to plummet. The value of the rial against the US dollar has dropped by more than 250 percent since November, from 40,530 to 160,000 on September 24.