The Iranian economy is currently facing the real possibility of a collapse, especially after the US sanctions which cancelled the nuclear deal came into force even before its scheduled date of November 4. The main Asian importers of Iranian oil and gas have already begun to reduce their intake.

Japan, for example, has suspended its imports as of mid-October, with its companies suspending new deals from mid-August. China and India have asked Iranian-oil importing companies to seek an alternative to avoid a US response.

In Europe, despite the official position taken by the governments which favour retention of the nuclear deal, the European Investment Bank announced suspension of its activities, while many companies also announced a cessation of their work, including those in the oil and gasfield. It is also the case with the rest of businesses from the rest of the world, which have fallen in line with the requirements imposed by US sanctions.

This will inevitably lead to an economic collapse and affect the most important source of income for Iran from its oil and gas sector. The mullah regime in Tehran is dealing with this dilemma in the same way as it did during the boycott by the Obama administration and without taking into account the changed positions and the balance of power between various parties.

The Iranian regime is working in two failed directions, the first one is threatening Europe that it will withdraw from the nuclear agreement if Europe does not provide an integrated economic package. In fact, this threat is meaningless, but it reminds us of the saying, “An empty hand has nothing to give”. The EU cannot even help Iran face the US sanctions because of its enormous interests with the US and its almost total dependence on the global financial system that is driven and dominated by Washington.

Consequently, these threats will have little or no effect.

Opec production

The other direction is completely the opposite and reveals Iranian submission and humiliation. The Iranian Oil Minister, Bijan Zanganeh, asked Opec to support his country in the face of US sanctions, according to Reuters, which means requesting Opec members to not increase production, which would risk global economic stability and growth. The chairman of Russia’s Rosneft has said that the US withdrawal from the Iranian agreement could hurt 5 per cent of world oil production.

It goes without saying that such an attempt to appeal to Opec will not work out. The Opec members, as well as Russia, have a genuine commitment to global economic stability, as they cannot sacrifice this just to satisfy an adventurous and extremist priesthood system, as evidenced by increasing production from within and outside Opec to meet demand and avoid supply shortages.

Obama’s time has irreversibly gone away and the $150 billion (Dh550.5 billion) provided by the former US president has been wasted due to Iranian corruption, and the facilities provided to it within the global financial system at that time will be no longer be available. This means the mullahs’ regime has limited options and add up to no more than two. Choosing stubbornness and seclusion means a definite collapse not only for its economy, but also for its entire regime.

Full compliance

The other option is to simply respond to the 12 conditions declared by US Secretary of State Mike Pompeo, which means a full compliance with international laws and kneeling before the White House master. It also means ending its support for terrorism and interference in others’ affairs and withdrawal from Syria, Yemen, Iraq and Lebanon.

This also means putting an end to sectarian schemes pursued by Iran for 40 years and which have proved a failure. It could prompt the Iranian people to hold accountable those responsible for the waste of their wealth to fund terrorism and interference.

In short, Iran is moving in the wrong direction. Searching for solutions in the capitals of the world is useless as it is will only have to deal with Trump. The experience of its Qatari ally showed that moving between the capitals of the world does not provide solutions. The solution to the Iranian situation lies only in Washington.

— Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.