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The Iranian rial fell sharply on Wednesday as markets braced for the reimposition of UN sanctions under the snapback mechanism, with the US dollar trading above 1,070,000 rials on the open market, more than 2% higher than a day earlier.
Sterling climbed to 1,440,000 rials, while the price of the “Emami” gold coin rose 3.5% to 1,070,000,000 rials, reflecting heightened demand for hard assets amid economic uncertainty.
G7 foreign ministers on Wednesday called on Iran to fully meet its obligations under the nuclear Non-Proliferation Treaty, resume cooperation with the UN atomic watchdog and engage in direct talks with the United States.
In a joint statement after talks on the sidelines of the UN General Assembly, they also voiced support for the European powers’ decision to trigger the snapback mechanism to restore UN sanctions, saying it was key to ensuring Iran never obtains a nuclear weapon.
The Iranian rial fell sharply on Wednesday as markets braced for the reimposition of UN sanctions under the snapback mechanism, with the US dollar trading above 1,074,000 rials on the open market, more than 2% higher than a day earlier.
Sterling climbed to 1,440,000 rials, while the price of the “Emami” gold coin rose 3.5% to 1,070,000,000 rials, reflecting heightened demand for hard assets amid economic uncertainty.
On Tuesday, Iran’s central bank governor Mohammadreza Farzin sought to reassure business leaders that the country’s foreign exchange and gold reserves remain secure.
Also on Wednesday, Oil Minister Mohsen Paknejad said that reimposition of UN sanctions will not add "new burdensome restrictions" on the country’s oil sales.
"In the last years, we have faced such severe restrictions from the unjust and unilateral US sanctions that, in practice, [UN sanctions] won't add much to this situation," Paknejad said after a cabinet meeting.
The oil and petrochemical sector contributed roughly a quarter of Iran’s GDP in 2024, making continued exports critical to Tehran’s economy as sanctions loom.
Reuters also reported on Wednesday that the revival of sanctions is unlikely to halt Tehran’s vital crude exports but could hand Chinese refiners a lucrative advantage, giving them greater access to discounted Iranian oil.
Iranian Oil Minister Mohsen Paknejad said on Wednesday that the activation of the UN snapback sanctions would not impose “new burdensome restrictions” on the country’s oil exports.
“If we face conditions that require fresh decisions, we will have plans in place,” Paknejad told reporters after a cabinet meeting.
An Iranian lawmaker said on Wednesday that the return of UN sanctions through the “snapback” mechanism would have little effect on the country, arguing that Western leverage over Tehran has run out.
Abolfazl Aboutorabi, a member of parliament’s internal affairs committee, said the European move showed the West was “untrustworthy despite Iran’s commitment to diplomacy.”
He cited divisions within the UN Security Council, the limited scope of UN sanctions compared with US measures, and Iran’s adaptation to years of restrictions.
Aboutorabi also pointed to “stabilized oil customers, growing de-dollarization in oil trade, and the end of effective Western pressure levers against Iran.”
