Iran Has Only Two Months of Gasoline Supplies Left as US Pressure Intensifies: Report

The US campaign to economically isolate Iran is placing Tehran under severe financial strain. A blockade is cutting off oil revenue, while expanded sanctions are making it increasingly costly for the country to obtain foreign currency, finance imports and bypass restrictions.

Three senior Iranian sources told Reuters that the latest pressure is becoming increasingly difficult for the government to withstand. Iran has spent decades developing networks to work around Western sanctions, but Washington is now targeting many of the financial channels, intermediaries and trading arrangements that allowed those systems to function.

The economic campaign comes six months into a conflict that has failed to secure the concessions sought by either Washington or Tehran. Fighting intensified again this week, with US strikes along Iran's Gulf coast followed by Iranian attacks on American bases in Arab countries.

Oil lies at the heart of Iran's economic problems. Iranian crude loadings have fallen to about 260,000 barrels per day, from roughly 1.7 million barrels a day a year earlier, according to Kpler data cited by Reuters. A US blockade imposed in July has effectively prevented Iran from exporting crude through its traditional routes, sharply reducing its main source of foreign currency.

The loss of revenue comes at a time when Iran can least afford it. The rial has dropped from about 1 million to the US dollar a year ago to more than 2.2 million, while official figures show average inflation of 69.9% over the past 12 months. Food, beverage and tobacco prices have risen at nearly twice that rate, Reuters reported.

One senior Iranian source said the country has only about two months of gasoline supplies remaining. Although Iran is a major oil producer, it must import some gasoline because its domestic refining capacity cannot meet demand.

The labour market is also deteriorating. Official unemployment rose to 9.1% in the spring, while employment fell by about 450,000 people from a year earlier. Reuters reported that the average monthly salary is about $125, compared with estimated basic household expenses of approximately $450 per month.

"We are getting poorer every day," Mahnaz, a 34-year-old private-sector employee in Tehran who withheld her surname, told Reuters. Washington is simultaneously seeking to close the financial escape routes Iran previously relied on.

The Treasury Department launched what it calls "Operation Economic Outcast" on August 24, describing it as a campaign targeting Iran's remaining financial networks and revenue sources.

Days later, US authorities moved against financial channels in the United Arab Emirates, including by proposing restrictions on Banque Misr UAE's access to US correspondent banking.

The impact extends beyond oil. Iranian President Masoud Pezeshkian has said overall trade has declined by between 25% and 35%, with imports falling more sharply than exports, according to Reuters.

Evading sanctions is also becoming more expensive. Front companies, unregistered tankers, intermediaries and indirect payment systems generally require substantial premiums. With fewer dollars available, Tehran has less money to cover those additional costs.

Iranian officials are aware of the political danger posed by deteriorating living conditions, particularly after nationwide protests earlier this year. Washington hopes economic pressure will help force Tehran into negotiations, while Iranian officials believe higher energy costs and inflation could increase political pressure on the US government ahead of November's midterm elections, Reuters reported.

However, the strategy carries significant risks. Iran has warned that increased economic pressure could trigger further military escalation. Ali Ansari, a professor of modern history at the University of St Andrews, told the outlet that Iran is facing "very, very severe economic pressure."

Originally published on IBTimes