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Iranians Ask Why Oil Exports Do Not Help The Beleaguered Economy

Iran International Newsroom
Jun 1, 2023, 11:10 GMT+1Updated: 17:31 GMT+1
Islamic Republic’s flag flies over an oil facility in southern Iran
Islamic Republic’s flag flies over an oil facility in southern Iran

Two online media outlets in Iran have asked the question that is on everyone’s mind: Where is the oil export money the government claims to be earning since 2021.

There is little doubt the Iranian regime succeeded in boosting its oil exports despite US sanctions since late 2020, coinciding with Joe Biden’s victory in the presidential elections and his policy of negotiating a return to the 2015 JCPOA nuclear deal.

Former President Trump’s sanctions had reduced Iran’s crude exports to around 200,000 barrels per day, but since 2021 Iran has been shipping at least 600,000 barrels.

Industry monitoring firms, such as TankerTrackers, Vortexa, Kpler, and other sources estimate Iran exported anywhere from 810,000 to 1.2 million barrels of crude oil per day in the second half of 2022. Tehran keeps the export volume secret, but top officials constantly claim revenues are increasing, without providing details, apparently to protect buyers who are violating US sanctions.

Nevertheless, in the past two years the country’s economic crisis has worsened and many ask where the oil money is and why the revenues do not help the situation. The Iranian currency has more than halved in value in one year and recent reports say annual inflation is approaching 70 percent.

Farazdaily, a website in Tehran posed the question to two members of parliament last week and they did not deny that more oil is being shipped – primarily to China – but they had no answer about why the revenues do not have a positive impact on the economy.

MP Yaghoub Rezazadeh (undated)
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MP Yaghoub Rezazadeh

One of the lawmakers who spoke to FarazDaily, Yaghoub Rezazadeh, first secretary of parliament’s National Security and Foreign Policy Committee claimed that Iran’s current economic problems are partly caused by sanctions in general, that makes trade with other countries hard and exports non-profitable.

If Iran exported an average of 800,000 bpd even at discounted price of around $75 per barrel in 2022, its revenues just from shipping crude oil would have been $22 billion. In addition, there is the export of oil products, such as gasoil, gasoline, and other products, which officials have said generate revenues almost equal to crude exports. Therefore, Iran should have had at least around $35 billion income, a sum that would have financed most of its annual budget.

According to the official budget bill, 55-percent of the government’s operational budget this year is supposed to be generated by oil exports.

In this scenario, the government would not need to print money, which is the reason why inflation is approaching 70 percent and the national currency is dropping.

The puzzle about Tehran’s oil revenues is that its main buyer China might not be paying for the oil in US dollars or other hard currencies, but instead bartering the oil with goods or in yuan. Iran might also be offering much larger discounts that what observers estimate. The third factor may be the cost of the illicit exports in additional shipping fees and payment to middlemen to repatriate the cash amid stringent US banking sanctions on Iran.

In the worst-case scenario, Iran might be collecting far less than $20 billion in all its energy exports.

Rezazadeh actually admitted that Iran has a hard time repatriating the oil export revenues and other debts from China, Iraq, Turkey, Syria, Afghanistan and some neighboring countries in the Persian Gulf region.

Referring to sanctions he said, “Naturally, with all these impediments we are not able to bring back proceeds form oil exports. Many countries owe us money that we cannot repatriate. We have sold oil, natural gas and food to other countries without collecting the revenues.”

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UN Watch Moves To Overturn Iran’s Appointment As Chair Of UNHRC Social Forum

May 31, 2023, 19:09 GMT+1

An independent human rights organization submitted a resolution to the UN to overturn Iran's appointment as the chair of the Social Forum of the UN Human Rights Council.

Hillel Neuer, international human rights lawyer and director of the UN Watch said in a tweet that the text was contained in a UN Watch submission to the 53rd Session of the UN Human Rights Council.

“There was no procedure to expel Iran from the UN Women’s Rights Commission, but we got that done,” said Hillel Neuer, referring to the group's recent campaign work which saw Iran thrown out of the UNWRC.

“We thank the more than 75,000 people worldwide who have signed our petition to stop Iran’s regime from heading the UN Human Rights Council Social Forum in November. Our goal is to reach 100,000 before approaching world leaders for their support,” said Neuer.

Since September the Islamic Republic has continuously undermined and increasingly suppressed the human rights of women and girls, including the right to freedom of expression and opinion, often with the use of excessive force and undercover surveillance.

Tens of thousands have been arrested arbitrarily, including women and girls.

Taliban Deploys Heavy Military Equipment To Border With Iran

May 31, 2023, 15:27 GMT+1

Amid the tensions between Iran and the Taliban over water, the militant group has reportedly deployed a convoy of tanks from Herat to Islam Qala on the border with Iran.

Videos shared on social media show that the Taliban forces are stationed in the region with heavy military equipment.

A video shows a convoy of Taliban tanks moving from Herat towards the Iranian border.

Local sources say the recent tensions between Iran and the Taliban started after they prevented the construction of a road and the installation of barbed wire by the border guards of the Islamic Republic of Iran.

The sources also added that the border forces of the Taliban and border guards of Iran got into a verbal tension last Friday in Islam Qala.

However, the Iranian media wrote on Tuesday evening that the situation at the border is calm.

Tasnim news agency, affiliated with the IRGC, denied any tension between the Taliban and the border guards of the Islamic Republic in the area.

The Taliban authorities have not yet officially commented on sending troops to the border.

The tension at Islam Qala comes as the Taliban and the Iranian border guards clashed on Saturday in Nimroz. Two Iranian guards and one Taliban fighter were killed after shooting broke out near a border post.

It was not immediately clear what had caused the incident, in which several people were also injured, but it came amid tensions over water rights.

Iran has accused Afghanistan's Taliban of violating a 1973 treaty by restricting the flow of water from the Helmand River to Iran's parched eastern regions, an accusation denied by the Taliban.


Activist Groups Slam Appointment Of Iran As Chair Of UNHRC Social Forum

May 31, 2023, 14:43 GMT+1

Twenty-six Iranian rights groups expressed fury over the appointment of the Islamic Republic as the chair of the UN Human Rights Council 2023 Social Forum.

A group of doctors, lawyers and civil activists such as the Kian Foundation and the Simourq Association are among the signatories to the letter to Vaclav Balek, the head of the UN Human Rights Council for 2023.

They defiantly condemned the appointment of Iran's UN ambassador Ali Bahraini as the forum’s chair after Vaclav Balek said in a statement earlier this month that he had decided to appoint Bahraini following the receipt of a nomination from regional coordinators.

The forum to be held in Geneva on November 2 and 3 will focus on the contribution of science, technology, and innovation to the promotion of human rights including in the context of post-pandemic recovery.

In their letter, the signatories stated that according to the UN Special Rapporteur on human rights in Iran, the violence of the security forces of the Islamic Republic during the nationwide protests led to the death of hundreds, including dozens of children and women, while hundreds of other protesters were seriously injured, and thousands were arrested.

Earlier, UN Watch launched a petition to the UN Secretary General Antonio Guterres to stop the Islamic Republic from chairing the forum and said there were still six months left to cancel the appointment.

The Islamic Republic was also voted out of the UN Commission on the Status of Women (CSW) in December for policies contrary to the rights of women and girls. It is in addition, also investigating rights abuses in Iran in a special committee, while simultaneously allowing the regime to chair a key rights event.


Secret Talks In Oman Suggest US Is Preparing Deals With Iran

May 31, 2023, 12:58 GMT+1
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Iran International Newsroom

It is looking ever more likely that the US is stepping up talks to kick-start nuclear talks with Iran despite denials from senior diplomats. 

As Brett McGurk, President Biden’s senior Middle East adviser, took a low-profile trip to Oman earlier this month for talks on possible diplomatic outreach to Iran, it seems this is more than ‘talks’. 

Neither the US nor Oman made the visit public, suggesting only something as serious as Iran could have called for such secrecy. Though the Biden administration has spoken of their desire to quash Iran’s nuclear program, its softly softly approach has called into question the lengths it will go to. 

Oman has recently been pitched as a broker between Iran and Saudi in the lead-up to the détente in March and stands a good chance of holding Iran’s hand as it deals with its biggest enemy. 

Brett McGurk, President Joe Biden’s senior Middle East adviser (2017)
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Brett McGurk, President Joe Biden’s senior Middle East adviser

Behind the scenes, Rafael Grossi, Director General of the International Atomic Energy Agency, said on Tuesday that work with Iran on its nuclear enrichment is “a work in progress”. At a press conference in New York, he said the latest report of his visit in March will be released soon but admitted “there are a number of issues we are still working with Iran on, with some we are making progress and with others, no, so it’s an ongoing thing and we haven’t reached an end station”, explaining that it is a “complex” array of issues as the IAEA seeks clarity on three locations being investigated. 

However, whether the agency has really won greater oversight powers as agreed in March, is to be seen. The undeclared Marivan site near Abadeh, south of Esfahan, remains a hot topic. He said the IAEA is yet to implement the terms of the joint statement including additional monitoring capabilities for the IAEA. 

Speaking to Axios, a White House National Security Council (NSC) spokesperson downplayed the speculation of a new deal circulating in Jerusalem. “There is no US discussion of an interim deal and no discussion of sanctions relief, or closing safeguards cases," the spokesperson said, meanwhile quoting a senior European diplomat who said that the US is indeed working with the Omanis on the Iranian issue.

Keeping mum on talks, the White House NSC spokesperson deferred to ‘security concerns’ as the reason for the lack of transparency, but admitted discussions centered around regional diplomacy, "of which Iran is one aspect.”

Axios claims the Israeli government is concerned about a possible push by the Biden administration for a “freeze for freeze” interim agreement with Iran, which will be subject of discussions for Israeli minister for strategic affairs Ron Dermer and National Security Adviser Tzachi Hanegbi who are expected to discuss these concerns during their visit to the White House tomorrow (Thursday).

Meanwhile, as diplomatic chess pieces continue to shift, the Korea Economic Daily reported on Tuesday that South Korea and the US are discussing ways to release $7 billion in Iranian funds held in South Korea, a South Korean debt for oil imports from Iran due to global sanctions.

Just like the high-profile case of British-Iranian dual-national Nazanin Zaghari-Ratcliffe, held under ransom for a British debt to Iran, it is highly likely the deal has the same premise - cash for hostages. Currently there are three dual nationals with American citizenship and two individuals with US permanent residency held by Iran on trumped-up charges of espionage.

US envoy for Iran Robert Malley (undated)
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US envoy for Iran Robert Malley

Speaking to NPR this week, the US envoy for Iran, Robert Malley, continued to stress that diplomacy is the Biden administration’s first choice. “I think it's been proven to be the most effective way and the most sustainable way to make sure that Iran doesn't acquire a bomb,” he said, claiming to have forged “a credible diplomatic path”. 

In spite of the imbalance of attacks on the US personnel and bases in the Middle East versus retaliatory attacks carried out by the US, he still claims to also have “a credible deterrence path”. As of March, Iran had launched 83 attacks on the US in the likes of Iraq and Syria, with only four military responses, since the start of the Biden administration.

He said: “In other words, [the] president has said all options are on the table. You could imagine what that means. He has said explicitly that the military option will be on the table. It is far from the preferred option, but he will do what it takes to make sure Iran doesn't acquire a bomb. And we hope that we could resolve this through diplomatic means, and we're prepared to go down that path.”

Iran Poverty Rate Reached Over 30% Since 2018

May 31, 2023, 12:58 GMT+1

Iran’s Parliament Research Center says the country's poverty rate has reached over 30% since 2018.

According to the report released on Tuesday, in 2021, the population below the absolute poverty line in the country increased to 30.4%.

Based on the report, unemployment, lack of a higher education degree, having children and being a tenant are among the factors that increase poverty in the country.

The report shows that Iran's economic situation has been deteriorating long before the global sanctions hit the country's economy.

According to a report published by ILNA in January, one-third of the country’s population is now living in extreme poverty, after the number almost doubled in one year from 2020 to 2021. However, it is believed that the number could in reality be far higher. 

According to official figures released by the interior ministry, around 60 percent of the 84 million Iranians live under the relative poverty line of whom between 20 to 30 million live in "absolute poverty".

Economic failures of the regime are becoming more and more difficult to justify, even given US sanctions. "The main reason for the [economic] problems [in the past ten years] is not just the sanctions. A major part of these were caused by wrong decisions and inefficiency," Supreme leader Ali Khamenei admitted in a speech last year.