Understanding the Need for Humanitarian Trade in Iran

In November 2019, President Hassan Rouhani of Iran made an important announcement with regard to the ailing national economy of the Islamic Republic. Exploration for petroleum reservoirs in the province of Khuzestan, located in the southwest region of the country, has yielded a vast oil field larger than a square mile and about 80 meters deep, which makes it ideal for drilling and extraction.

Geologists and extraction specialists who have looked at this new oil field estimate that it could produce up to 53 billion barrels. President Rouhani mentioned that this discovery is a small gift from the government to the people of the Islamic Republic, a gift that would put the nation just below Saudi Arabia in terms of oil production.

Despite its vast crude oil and gas reserves, the economy of Iran these days is looking more like Venezuela than Saudi Arabia. Income and wealth inequality have been weighing down heavily on the middle class population of Iran, once considered to be a stable economy in the Middle East, and this situation has a lot to do with the numerous economic sanctions imposed by the United States on the Islamic Republic.

The Iranian economy is not falling apart, but are signs of deep financial strain affecting the lives of families who have gone from middle class status to low-income and poverty. Inflation has taken a heavy toll on the lives of Iranians; as much as this country would like to become an self-sufficient economy, the reality of doing so is made difficult by the nature of the globalized economy and the long-standing issue of economic sanctions imposed by the United States, which reverberate with international effects that preclude humanitarian trade.

Iran is a country that has endured trade sanctions since the Islamic Revolution of 1979, but this economic restriction has become more complicated because of various geopolitical issues. Under the mandate of U.S. President Donald Trump, sanctions have sharply increased since the Joint Comprehensive Plan of Action (JCPOA) was abandoned in 2018. It should be noted that the JCPOA is an international agreement signed during the Obama administration, and one of its goals was to procure the reintegration of Iran to the international economy.

No matter how industrious Iran’s efforts may be in producing its own food and medications, the fact of the matter is that economic sanctions prevent this undertaking, which is something that Venezuela has learned the hard way despite its vast reserves of crude oil. Hyperinflation in Iran cannot be stopped, and this is a consequence of trade sanctions. Even though the U.S. supports humanitarian trading activity such as the oil-for-food program that Venezuela conducts with countries such as Uruguay, Mexico, and Cuba, the fact is that such programs cannot be properly executed because of the complexities of economic sanctions.

Energy attorney Amir Handjani has written extensively on the complicated issue of trade sanctions imposed against Iran, a country that needs to import food and raw materials in order to sustain a populous society. What the Islamic Republic has discovered is that humanitarian trade programs are contingent upon factors such as economic sanctions, and this is what the good people of Iran are forced to deal with on a daily basis.