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Iran's Vulnerabilities to U.S. Sanctions: Finding the Weak Spots
(Washington Institute for Near East Policy) Patrick Clawson - As the Trump administration prepares to ramp up sanctions against Iranian entities following U.S. withdrawal from the nuclear deal, it should be recalled that the Iranians have much experience dealing with sanctions and have become adept at finding workarounds. Moreover, with the world economy heating up and oil giant Venezuela melting down, prices may be robust enough to offset any major sanctions-related drop in Iran's oil export volume. Since January, Tehran has sold its heavy crude at an average of $64 per barrel, compared to the 2017 average of $51; this means its revenue would be constant even if its volume fell by 20%. Yet other factors would reinforce the impact of U.S. sanctions. Many international businesses and financial institutions have become averse to doing business in high-risk jurisdictions. Major European companies have already announced their departure from the Iranian market in recent weeks. The Iranian regime's most vulnerable weak spot is financial transactions. Few Iranian banks comply with international standards. The Rouhani government's inability to address these problems has done more to hurt Iran's economy than have international sanctions, and there are no signs that they will do better in the future. The writer is director of research at the Washington Institute.