Tehran is suffering serious economic losses due to the American blockade of Iranian ports, but is still ready to drag out the war, while Washington has no more than three weeks to end it and therefore will resign first, said Dr. Randa Slim from Johns Hopkins University in an interview with PAP.
It is still unclear whether the next round of US-Iranian negotiations will take place in Pakistan's Islamabad. According to the Associated Press, both American and Iranian officials have signaled that they will return to talks, but only regarding the ceasefire that ends on Wednesday. At the same time, the American blockade of Iranian ports in the Persian Gulf and the Gulf of Oman has been ongoing since April 13, introduced in response to Tehran's closure of shipping in the Strait of Hormuz and intended to force Tehran to make concessions.
As the Daily Telegraph reported on Tuesday, at least 26 ships carrying oil and gas have managed to enter and leave Iranian ports since the blockade came into force. Nevertheless, its effects, according to estimates by the Washington think tank Foundation for Defense of Democracies (FDD), may be very painful for Iran.
Over 90 percent Iran's annual trade worth $109.7 billion passes through the Strait of Hormuz, and the crude oil and natural gas transported there constitute 80 percent. regime's export revenues. According to FDD, blocking Iranian ports may also force the closure of Iranian oil fields due to the exhaustion of oil storage capacity.
– The numbers are indeed not favorable for Iran, but it is a country that has been under sanctions for a long time. He developed the ability to avoid them and was able to survive them. Perhaps he will also learn to circumvent the blockade, said Dr. Randa Slim from the Foreign Policy Institute at the School of Advanced International Studies at Johns Hopkins University in an interview with PAP.
In her opinion, Iran is ready to drag out the war for even another three months. Meanwhile, as she emphasized, the American administration has “three weeks at most” to end the conflict with Iran without major consequences for the American economy and save the chances of Republican candidates in the November congressional elections.
However, available data show that Iran's losses are large. According to the analysis of Miad Maleki, an FDD expert, the island of Karg itself, located in the region of the Persian Gulf blocked by the Americans, serves 92 percent. Iranian crude oil exports worth $139 million a day. The blockade therefore cuts off the main source of foreign exchange earnings for the Islamic Republic.
It also prevents the export of petrochemicals worth about $54 million a day and also disrupts trade in minerals and metals worth about $88 million a day.
Another serious problem resulting from the American blockade is the capacity of Iran's oil storage facilities, which is shrinking every day. Iran can store about 50-55 million barrels, of which about 60 percent by Maleki's estimates, it was already full on the first day of the lockdown. The interruption of exports means that Iran's storage capacity will be filled in about 13 days. After this time, Iran will be forced to close its oil wells, which may in turn irreversibly damage them.
According to Reuters, Asim Muni, the Chief of the General Staff of the Pakistan Armed Forces, who is trying to end the war, told President Donald Trump in a telephone conversation that the US blockade of Iranian ports constitutes an obstacle to the talks. This is a signal that the authorities in Tehran are aware of the scale of possible losses.
– It is true that the blockade makes life very difficult for the regime, but it will not stop it – argues Slim. In her opinion, in the game of who will give up first, Americans are in a worse situation. Unlike President Donald Trump, Iran does not have to worry about public opinion.
– It is already clear that the American president wants to emerge from this extremely unpopular war in the country with a face so that he can declare victory – Slim noted. She added that while President Trump is convincing Americans that the war with Iran is “very close to being over” and that it is worth increasing energy prices, more inflationary pressures and stock market volatility to prevent Iran from acquiring a nuclear weapon, polls show that the public does not believe him. Because although the United States does not depend on one-fifth of the world's oil supplies that pass through the Strait of Hormuz in peacetime, rising energy costs also hit American consumers.
President Donald Trump's approval rating has reached a new low, according to the latest NBC News poll released on Monday. 63 percent American adults are not happy with his presidency, mainly because of the state of the economy and the war with Iran. Pew Research survey published on March 23 this year. shows that only 37 percent respondents approve of Trump's handling of the war in the Middle East.
The Iranian regime, in turn, must take into account the deteriorating state of its economy. Even before the outbreak of the war, the situation was bad, which led, among others, to to the bloodily suppressed protests in January. According to FDD, food prices and supply shortages have been rising in recent months, and import disruptions caused by the US blockade are only deepening the economic crisis. Inflation is also rising and currently stands at 47.5%. Banks are limiting withdrawals to $18-30 a day, and the government has issued the largest banknote in the history of the Islamic Republic, with a denomination of 10 million rials, worth about $7.
According to the London-based independent Persian-language website iranintl.com, Iran's economy is reeling from war, inflation and unemployment and has entered a period of stagflation, combining high inflation with economic stagnation and rising unemployment. And according to the regime's official estimates quoted by iranintl.com, Iran's total war losses are already around $270 billion, 57 percent. Iranian GDP.
When asked whether there would be an anti-government uprising in Iran, Slim replied that Iranians were between “a rock and a hard place.” Even those who have lost loved ones in the protests and are opponents of the regime will find it difficult to take to the streets and protest when they hear the American president's threats to raze Iranian power plants and bridges to the ground.
– The United States does not offer them a real alternative, on the contrary, it offers them a return to the Stone Age and the destruction of their civilization, which is a worse scenario than the one they have faced so far – said the expert. She added that the Americans should consider how they can get them on their side, because for now the Iranians are choosing to wait it out.
In the opinion of the PAP interlocutor, US allies are also important in the current game, in which both sides are waiting for the opponent's concessions. In Randy Slim's opinion, Iran may drag out the war also because the costs of closing shipping in the Strait of Hormuz are more painful for the Persian Gulf countries and countries importing oil and gas from there than its own losses, including those resulting from the American blockade.
According to the Wall Street Journal, talks have already taken place between the Governor of the Central Bank of the United Arab Emirates (UAE) and US Secretary of the Treasury Scott Bessent on financial rescue instruments, including currency swap (currency transaction hedging, consisting in a guarantee of currency exchange at a predetermined rate). As Bloomberg reported, the United States is ready to provide assistance to the UAE if the war in Iran worsens its economic prospects.
– This is not the best sign when it comes to the resilience of the Gulf economies to this conflict – noted Slim. However, she noted that blackmailing its neighbors by blocking trade in the gulf is a card in Tehran's hands that will lose value over time. Many countries from the Gulf Cooperation Council (GCC) are already working on alternative transport routes to the Strait of Hormuz, and there is more and more talk about routes running through Iraq, Jordan and Turkey. Therefore, in the long run, blocking and attacking the Persian Gulf countries may cost Iran a lot.
Anna Gwozdowska
