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Iranian Economy Gets A Harder Hit by U.S., Trade Figures Shrink With Europe’s Biggest Economy

In other setbacks to Iran, its trade with Germany, Europe’s largest economy, slumped in the first two months of this year, according to the Association of German Chambers of Commerce and Industry.

oil tank
An employee walks past oil tanks at a Sinopec refinery in Wuhan, Hubei province April 25, 2012. China’s top state-owned refiners have decided not to order any oil for loading at Iranian ports this month, according to Reuters. Pixabay

U.S. sanctions are biting harder into the Iranian economy, with new signs that Iran’s key oil exports are faltering, while its trade figures with Europe’s biggest economy and with the United States are shrinking.

U.S. news service Bloomberg said it has compiled tanker tracking data showing that no oil tankers had been seen leaving Iran’s oil terminals for foreign ports in the first nine days of May. Crude oil is Iran’s main revenue source.

Washington tightened its unilateral sanctions on Iranian oil exports May 2, ending waivers that it granted to several countries to keep importing crude from Iran and requiring them to reduce imports to zero. The U.S. sanctions are aimed at pressuring Iran to change its perceived malign behaviors.

Bloomberg said the tracking data also revealed that four Iranian tankers were anchored off the coast of China as of May 9, with a fifth tanker on its way to the Chinese coast. It said most of the rest of Iran’s tanker fleet either was returning to the Persian Gulf after discharging cargoes or had been observed in or near the region in the previous two days. It said 10 Iranian tankers had not sent tracking signals for at least 16 days, keeping their transponders turned off in an apparent effort to hide their movements.

In a report published Friday, Reuters said the four Iranian tankers off the Chinese coast and the fifth on its way to China had loaded Iranian crude in April, before China’s U.S. waiver to import the oil expired. It said two of the tankers have discharged their oil to Chinese clients, while two others were waiting to do so at the Chinese ports of Ningbo and Zhoushan.

But in a further blow to Iran’s oil industry, Reuters quoted “three people with knowledge of the matter” as saying China’s top state-owned refiners China Petrochemical Corp (Sinopec) and China National Petroleum Corp (CNPC) have decided not to order any oil for loading at Iranian ports this month. Reuters cited the sources as saying the Chinese refiners were worried that making such orders would expose them to U.S. sanctions that could block their access to the U.S. financial system.

Iran has vowed to keep exporting oil in defiance of U.S. sanctions.

There was no immediate reaction by the Trump administration to the undeclared Iranian oil delivery to Syria. Pixabay

In recent days, Western media said it appears that Tehran did find one oil customer this month, with an Iranian tanker delivering crude to Syria for the first time this year. Iran had stopped oil shipments to Syria, a key regional ally, late last year after suspending a credit line to Damascus because of impending U.S. sanctions against Tehran. The halt in Iranian oil deliveries to Syria, which also is under U.S. sanctions, led to fuel shortages during the Syrian winter.

Reuters cited a source familiar with Iranian oil shipments as saying the Iranian tanker arrived in Syria last week. U.S. network CNBC quoted firms that track maritime shipments as saying Iran made the delivery in the first week of May.

In a tweet posted Friday, TankerTrackers.com co-founder Samir Madani said the Iranian oil arrived May 5 aboard a Suezmax tanker previously known as True Ocean. Suezmax is a naval term for the largest ship capable of transiting the Suez Canal.

There was no immediate reaction by the Trump administration to the undeclared Iranian oil delivery to Syria.

In other setbacks to Iran, its trade with Germany, Europe’s largest economy, slumped in the first two months of this year, according to the Association of German Chambers of Commerce and Industry.

In Friday reports, newspapers belonging to Germany’s Funke Media Group cited the association as saying German exports to Iran fell 52.6% year-on-year to $261 million in January and February, while German imports from Iran dropped 42.2% to $46 million in the same period.

The Funke newspapers quoted the head of the German-Iranian chamber of commerce, Dagmar von Bohnstein, as saying: “The market in Iran is extremely difficult because of the U.S. sanctions and the country’s economic conditions.” Iran has seen more than a year of small-scale nationwide protests by workers angry at what they see as corruption and mismanagement by its ruling Islamist clerics.

The U.S. Census Bureau also posted trade data Thursday, showing U.S. exports to Iran fell 54.7% in the first quarter of 2019 versus the same period last year, to $14.6 million. It said U.S. first-quarter imports from Iran dropped to just half-a-million dollars, compared to $13.3 million in the year-earlier period.

U.S. Special Representative for Iran Brian Hook speaks to VOA Persian at the State Department in Washington, May 9, 2019.
U.S. Special Representative for Iran Brian Hook speaks to VOA Persian at the State Department in Washington, May 9, 2019. VOA

In a Thursday interview with VOA Persian at the State Department, U.S. Special Representative for Iran Brian Hook said Iran’s economic troubles will get worse.

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“That is the price this regime is going to pay for behaving like an outlaw regime,” Hook said. “We are denying Iran the ability to fund its proxies. So we are very happy with this steady state of pressure that we hope to keep in place for as long as is necessary.” (VOA)

Next Story

U.S. President Donald Trump Announces Military Deal With India

Trump Announces Military Deal With India, Expresses Optimism For Trade Pact

Donald Trump, Narendra Modi
President Donald Trump and Indian Prime Minister Narendra Modi shake hands during a "Namaste Trump," event at Sardar Patel Gujarat Stadium. VOA

By Steve Heman

President Donald Trump said Monday the United States will sign an agreement to sell $3 billion worth of U.S. helicopters and other equipment to India’s military.

The announcement came as Trump spoke at a welcome rally in the city of Ahmedabad, where a crowd of more than 100,000 people had gathered to hear from him and Indian Prime Minister Narendra Modi.

Ahead of the visit, Trump had said a new major trade deal between the two countries would not be part of this trip.  But in his address he promised the two countries will be making “among the biggest ever trade deals,” and said he is optimistic that he and Modi can reach “a good, even great deal” for both sides.

Modi also struck an optimistic note about a potential trade agreement, saying ties were expanding in spheres ranging from defense, the energy sector and information technology, and that a resurgent India would present new opportunities for the U.S.

Donald Trump, Narendra Modi
President Donald Trump, with first lady Melania Trump, pause as they tour the Taj Mahal. VOA

Calling the two countries “natural partners,” Modi said they can help bring peace, progress and security not just in the Indo Pacific region, but in the entire world.

“We are inspired by a long-term vision, not just short term considerations,” Modi said.

Modi hailed President Trump’s visit saying it marks a new chapter between the two countries. “India-U.S. relations are no longer just another partnership. It is a far greater and closer relationship,” the Indian leader said.

“There is so much that we share, shared values and ideas, shared spirit of enterprise and innovation, shared opportunities and challenges, shared hopes and aspirations,” according to Modi.

Trump began his address by uttering the Indian greeting “Namaste,” and said that India “will always hold a special place in our hearts.”

“America loves India.  America respects India.  And America will always be faithful and loyal friends to the Indian people,” Trump said.

He celebrated India as a successful democracy, and said both countries are committed to working together to fight terrorism.

“Our borders will always be closed to terrorists and terrorism and all forms of extremism,” Trump said.

Trump’s visit began with a red carpet-welcome at the airport in Ahmedabad, in Modi’s home state of Gujarat.  Thousands of people then cheered along a motorcade route as Trump and Modi traveled a short distance to a stop at Mahatma Gandhi’s ashram.

Pre-trip beautification effort

Donald Trump, Narendra Modi
U.S. President Donald Trump, first lady Melania Trump, and Indian Prime Minister Narendra Modi arrive at the new Motera cricket stadium. VOA

A small army of workers was deployed ahead of Trump’s visit to Ahmedabad to build a 400-meter-long wall along the motorcade route to block the view of where poor people live. The hurried beautification project also includes the placement of about 150,000 flowerpots.

After the stadium event in Ahmedabad and before heading to New Delhi, the president and first lady Melania Trump made a visit to the country’s most famous tourist attraction – the Taj Mahal – where they were given a tour of the site.

Indian media reported Agra will be on lockdown for the visit, although there is concern about controlling the menacing monkeys roaming the grounds of the 17th-century Mughal marble mausoleum.

“The forest department has been requested to ensure that the monkeys stay away from the Taj during Donald Trump’s visit,” Archaeological Survey of India Superintending Archaeologist Vasant Kumar Swarnkar was quoted telling India Today.

While Trump expressed his optimism for a trade deal, he said last week he was “saving the big deal for later on.”

There is mutual agreement on dozens of elements for the pact, but several contentious sectors are unresolved, including medical devices, according to sources close to the talks.

“Whether or not there will be an announcement on a trade package is, really, wholly dependent upon what the Indians are prepared to do,” a senior administration official told reporters on Friday. “That said, we have a number of significant commercial deals, which are of great significance that we’re very pleased to announce in a number of key sectors.”

Indian officials are said to be perplexed that U.S. officials halted trade negotiations just prior to the Trump visit, expressing a view that Washington pursued brinkmanship that failed in the face of a more patient India, which is the world’s fifth biggest economy.

“There’s no great hurry here” to finalize a trade pact, retired veteran senior Indian diplomat T.P. Sreenivasan in India told VOA.

“I was personally a little bit surprised that the two sides weren’t able to get this deal done,” Jeff Smith, South Asia research fellow at the Heritage Foundation, said.

Donald Trump, Narendra Modi
U.S. President Donald Trump and Indian Prime Minister Narendra Modi wave as they depart after a “Namaste Trump,” event. VOA

Bilateral talks

In India’s capital, bilateral talks are to focus on contemporary concerns.

Indian officials could raise Trump’s hard line on immigration.

“They view the immigration issue — whether it is offering visas to students or the H-1B highly skilled visas or the green card issue — as becoming worse in the last four years,” Pande told VOA.

It is uncertain whether Trump will discuss the issue of Kashmir.

Six months after Modi ended Kashmir’s special status under India’s constitution, local politicians there remain detained and internet service is restricted.

Trump “is not always very thoughtful when he talks about such issues, particularly Kashmir. So that’s a bee in his bonnet and it’s going to come up in some form,” Sreenivasan, a former Indian ambassador to the United Nations, predicted.

Pakistani Prime Minister Imran Khan has called for Trump to help resolve the dispute between the two nuclear-armed neighbors over Kashmir, something the U.S. president has previously indicated he is willing to do. But Modi has strongly rebuffed offers from third parties to mediate.

Indian officials are apprehensive about Trump commenting on the Kashmir issue during the visit.

“He might say that ‘I’m a great deal-maker and I can resolve Kashmir.’ But let’s hope he doesn’t,” Pande, of the Hudson Institute, said.

Some members of the U.S. Congress are also expressing concern about Modi’s controversial move to give Indian citizenship to immigrants from three neighboring countries — unless they are Muslims.

Trump, during the India visit, will raise such matters, particularly the religious freedom issue, which is extremely important to this administration,” according to a senior administration official.

“Attempts to lecture, coerce, punish, intervene in India’s affairs have traditionally not been particularly effective,” Smith, of the Heritage Foundation, said.

Trump will be the fourth consecutive U.S. president to travel to India, continuing the shift in allegiance by Washington to Delhi from India’s arch-rival and neighbor.

Khan, after a recent meeting with Trump during the World Economic Forum in Switzerland, said the U.S. president also promised to visit Pakistan soon.

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If “there is no complementary visit to Pakistan or no side agreement on some other way to assuage concerns there, then I think Pakistan will take it as a slight,” said Richard Russow, senior adviser for U.S.-India policy studies at the Center for Strategic and International Studies. (VOA)