Sanctions At The Forefront of The Iranian Elections

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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By Irina Slav – Jun 25, 2024, 5:00 PM CDT

Iranians have had enough of this sanction-caused hardship.
The majority of candidates in the elections in Iran are known to be hardliners.
Former reformist president Hassan Rouhani was quoted by the AFP as saying the sanctions are costing Iran an estimated $100 billion annually in direct and indirect losses from the exports of oil and oil products.

Iranians are going to the polls on Friday to elect a new president after the death of Ibrahim Raisi in a helicopter crash last month. Most of the candidates are conservatives, with only one labeled as a reformist by the media. But he is not the only one sounding a pragmatic note about sanctions.

Iranians are tired of Western sanctions, the AFP wrote in a recent analysis of the situation ahead of the elections. Even though the EU has stuck to the 2015 nuclear deal, Donald Trump unilaterally withdrew the U.S. from it when he got into the Oval Office, and this has hurt Iran’s economy. Then, the EU joined the U.S. in punishing Iran for its foreign policy, adding to the pain.

Iranians have had enough of this sanction-caused hardship. And what the six presidential candidates are offering its citizens are different paths out of it. The one so-called reformist candidate, Massoud Pezeshkian, is campaigning for a mending-fences approach with the West to get Iran out of its isolation from that same West, the AFP reported, noting he has the support of one of the people who devised the 2015 nuclear deal, former foreign minister Mohammad Javad Zarif.

The rest of the candidates are all conservatives, but this does not automatically mean they are all campaigning for a continuation of Iran’s current path. One of them, the current speaker of the Iranian parliament, has in fact suggested mending relations with the West but only if Iran stands to gain something from it—a pragmatic approach instead of ideology. At the same time, Mohammad Bagher Ghalibaf is campaigning for a continuation of Iran’s work on expanding its nuclear capabilities, which is certainly not winning the country any friends in the West.

Yet some candidates do not consider this important. Per the AFP, the most conservative of the candidates, former nuclear deal negotiator Saeed Jalili, has campaigned for forging even closer ties with China and Russia, saying repeatedly during rallies that “The international community is not made up of just two or three Western countries.” More interestingly, Jalili has called for closer relations with the Arab countries, notably Saudi Arabia.

Meanwhile, former reformist president Hassan Rouhani was quoted by the AFP as saying the sanctions are costing Iran an estimated $100 billion annually in direct and indirect losses from the exports of oil and oil products. Rouhani was referring to the preferential terms of an oil deal with China, which, after the snap-back of the U.S. sanctions, became Iran’s biggest oil client.

Despite these discounts and sanctions, Iran has recently managed to boost its oil production and exports. Earlier this year, exports hit the highest in six months, cargo-tracking data from Vortexa showed, reaching 1.56 million barrels daily. The increase, according to analysts, was a result of Iran’s perfecting of ways to circumvent the sanctions.

“The Iranians have mastered the art of sanctions circumvention,” Fernando Ferreira, head of geopolitical risk service at Rapidan Energy Group, told the Financial Times at the time. “If the Biden administration is really going to have an impact, it has to shift the focus to China.”

While the Biden administration considers this, Iran is planning to increase its oil production. The country is eyeing an average daily output of 4 million barrels from the current rate of 3.6 million barrels. For context, before the U.S. reimposed sanctions on Iran, the country was producing 4.3 million barrels daily.

Whether Iran’s next president will be a reformist or a conservative with a pragmatic streak—or none at all—remains to be seen at the end of the week. Whoever wins, the final word on things like foreign policy or the nuclear program comes from the Supreme Leader of the country, Ayatollah Ali Khamenei. Yet the next Iranian president might eventually become the new ayatollah, making the final decisions on future Iran policy.

By Irina Slav for Oilprice.com

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