The second and final wave of US sanctions against Iran, claimed by the US to be the harshest ever, have now snapped back, but a host of prominent Iranian pundits and private sector representatives say much of the impact of the new restrictions have already been felt and therefore the effect will be limited going forward.
The sanctions, targeting about 700 entities, hundreds of which are new targets on top of those that hit Iran under the administration of former US president, Barack Obama, came after a wind-down period ended on Nov. 4 after incumbent President Donald Trump unilaterally withdrew from Iran's nuclear deal in May.
Mehr News Agency spoke to 12 experts, former officials and private sector representatives on what will happen to the Iranian economy after the reimposition of US sanctions.
They largely believed that the US will in many ways fail to get the results it is seeking and Iran's oil revenues will continue to pour in albeit at lower levels. Nonetheless, they maintained that banking sanctions present the biggest challenge.
> EU's Iran Support
"The major difference during the current round of sanctions is that fortunately the European Union is supporting Iran," Masoud Khansari, president of the Iran Chamber of Commerce, Industries, Mines and Agriculture, said.
Mohammad Lahouti, who heads the Iran Exports Confederation, said there is no doubt that US sanctions negatively impact the Iranian economy, but the scope remains to be seen.
"Either way, Iran's oil sales will never hit zero while there is hope for Iran standing up to US sanctions since Europeans want to maintain JCPOA," he said, referring to the formal name of the nuclear deal Iran signed with world powers, including the United States back in 2015.
The Joint Comprehensive Plan of Action saw international sanctions lifted against Iran upon its implementation a year later. In exchange, the Islamic Republic agreed to limit the scope of its nuclear program.
The EU has devised a special purpose vehicle, likely to include a barter system, to continue trade with Iran and shield companies from sanctions. But there are many ambiguities, since diplomats have said the SPV will likely take months to be truly executed.
Mohsen Jalalpour, former president of the Iran Chamber of Commerce, Industries, Mines and Agriculture, said a majority of the negative effects of unilateral US sanctions have already been felt.
"But what can now threaten Iran's economy is all the new entities added to the sanctions list," he warned, referring to US endeavors to disconnect Iran from the global banking messaging service SWIFT as another major threat.
According to incumbent ICCIMA deputy president, Hossein Salahvarzi, Iran will by no means return to extremely harsh pre-JCPOA conditions.
"But sanctions are certainly not without effects with psychological effects that we have witnessed on Iran's economy and markets emerging as a major factor," he said.
Iran's rial has lost about 70% of its value since the start of 2018 due to returning sanctions. This has created a massive inflationary effect on markets that continue to batter average Iranians' purchasing power.
> Need to Move Away From Oil
"Under these circumstances, we have a huge dependency on oil incomes which is one of our danger points in relation to sanctions," said ICCIMA President Gholamhossein Shafei.
"What we need to focus on right now is non-oil exports," he said, adding that the current state of exports is not satisfactory due to malpractice and faulty policies at home.
Earlier this week, it was announced that the US will give eight nations exemptions to import Iranian oil.
But as Reza Aqamiri, a member of ICCIMA's board of representatives, said Iran will now have to give further concessions to its oil customers, namely India, to sell its crude.
"So Iran will naturally earn less from oil and this is something that will affect the economy".
Ebrahim Bahadorani, TCCIM top advisor, referred to Trump's oil sanctions as a double-edged sword that on the one hand threatens global markets by reducing supply and on the other raises prices. He referred to a recent International Monetary Fund warning that crude prices may hit $100 per barrel due to Iran sanctions.
"Therefore, reduced exports and oil sales will be compensated through an increase in the price of oil in global markets," he said.
For Hossein Salimi, a senior TCCIM member and Middle East Bank executive, Iran's banking troubles pose the most serious threat.
"If SWIFT is sanctioned, we will have severe banking problems and money transfer will be done with much more difficulty and at higher costs," he said.
TCCIM member Abbas Argon warned that Iranian officials must be ready for any eventuality, even though nothing is certain yet about the SWIFT embargo.
"Bilateral monetary agreements must be placed high on the agenda to boost ties with other nations and reduce pressures," he said.
Senior US State Department officials working on the Iran issue are said to have convinced Secretary of State Mike Pompeo to permit Iran to remain connected to the international banking system as part of the Trump administrations' concessions to Iran.
While Trump vowed to enforce a bevy of new sanctions, senior officials in both the state and treasury departments have fallen in line with European allies, officials have confirmed to the Washington Free Beacon.
> No More Currency Crisis in Sight
Concerning the foreign exchange market, Mahmoud Bahmani, a former governor of the Central Bank of Iran, said US sanctions are not expected to have a significant impact since they have already done the damage they were supposed to.
"The currency market won't face severe fluctuations anymore, but we must continue to manage it effectively," he said.
Two economic experts, Morteza Imani-Rad and Hossein Daroudian, agreed with the former CBI executive, saying Iran will not witness major currency fluctuations anymore.
"We may face periodic unrest in the currency market, but they won't be very serious," Imani Rad said.
According to Daroudian, "there are no reasons for us to face major currency fluctuations in the short run anymore".
