Iran president Rouhani warns country faces 'war situation' as he vows to bypass new US sanctions

Islamic republic will continue to sell oil, president says

Iran’s president has warned the Islamic republic faces a “war situation”, as he vowed the country will sell its oil and break reimposed US sanctions.

The sanctions end all economic benefits Washington granted Tehran for its 2015 nuclear deal with world powers and targets its vital energy and banking sectors. Brian Hook, the US State Department point person on Iran, called the new restrictions “the toughest sanctions that have ever been imposed” on Iran. “The purpose of the sanctions is to diminish the regimes’s capacity to threaten the region,” he told reporters in a conference call on Monday.

Although Iran continues to abide by the accord, which saw it limit its enrichment of uranium, officials have lately made a point of threatening that it could resume enrichment at any time at a faster rate than before.  

“American wanted to cut to zero Iran’s oil sales ... but we will continue to sell our oil ... to break sanctions,” Iran’s president, Hassan Rouhani, told economists at a meeting broadcast live on state TV on Monday.

On Friday, the US said it would temporarily allow eight importers to keep buying Iranian oil after the reimposition of sanctions.

China, India, South Korea, Japan and Turkey – all top importers of Iranian oil – are among the countries set to be given temporary exemptions from the sanctions to ensure crude oil prices are not destabilised. However, oil prices still fell on Monday.

The restoration of sanctions forms a part of a wider effort by Donald Trump to force Iran to curb its nuclear and missile programmes, as well as its support for proxy forces in Syria, Yemen, Lebanon and other parts of the Middle East. But few experts believe that pressuring Iran’s economy will change its regional posture.

In the 1980s, Iran launched Hezbollah in Iran, the Badr Brigade in Iraq, and numerous assassinations abroad while it was at war with Iraq and under embargo by many world powers.

“There’s no correlation in Iran between dwindling resources of the state and foreign policy,” said Ali Fathollah-Nejad, an Iran expert who divides his time between Qatar and Berlin.

In a bizarre message on Twitter designed to emphasise his “maximum pressure” policy towards Iran, the US president posted a photo of himself modelled on a Game of Thrones poster with the headline: “Sanctions are coming.”

Iran responded with air defence drills, with state TV airing footage of air defence systems and anti-aircraft batteries in two-day military manoeuvres underway across a vast stretch of the country’s north.

“We are in a war situation,” Mr Rouhani said. “We are in an economic war situation. We are confronting a bullying enemy. We have to stand to win.”

Both Russia and China vowed to continue purchasing Iranian oil and ignore US sanctions. “The ‘golden ticket’ Iran holds today is the unilateral nature of these sanctions, and the fact that the EU, Russia, China and many other European and Asian countries are against such actions against Iran at a time when Iran has illustrated its commitment to constructive engagement with the international community,” said Mehran Haghirian, an Iran researcher at the University of Qatar.

Mr Hook told reporters that he has travelled to many countries around the world and sought to convince them to curtail business activities with Iran. He noted that scores of companies have chosen to halt their Iran operations rather than risk access to the American market. "There’s no reputational risk for working with the United States, unlike Iran," he said.

In May, President Trump pulled the US out of the 2015 nuclear deal between Iran and six powers, and Washington reimposed its first round of sanctions in August.

Iran’s president, Hassan Rouhani, has vowed the nation will continue to sell oil and break US sanctions (Reuters/Brendan McDermid) (Reuters)

The deal saw most international financial and economic sanctions on Iran lifted in return for Tehran curbing its disputed nuclear activity under UN observation.

The reimposed penalties “are the toughest sanctions ever put in place on the Islamic Republic of Iran”, the US secretary of state, Mike Pompeo, said on Sunday.

However, Iran’s clerical rulers have dismissed concerns about the impact of sanctions on the country’s economy.

“This is an economic war against Iran but ... America should learn that it can not use the language of force against Iran ... We are prepared to resist any pressure,” Mr Rouhani said.

Iran is already in the grip of an economic crisis. Its international currency, the rial, currently trades at 145,000 to $1, down from 40,500 a year ago.

The economic chaos sparked mass anti-government protests at the end of last year, which resulted in nearly 5,000 reported arrests and at least 25 people being killed. Small, sporadic demonstrations still continue.

“In comparison to the sanctions under President George W Bush where we have seen a kind of rallying around the flag, the picture now is much more complicated,” said Mr Fathollah-Nejad, a researcher at the Brookings Doha Centre. ”But there is also a growing understanding that Iran’s economic hardship cannot be solely or even mainly attributed to US policy and US sanctions. ​What is new is a growing disenchantment.”