Without oil exports the government in Iran is broke
Iran's President Hassan Rouhani says his country's situation has never been as "difficult and complicated" as it is today. Rouhani admitted that U.S. sanctions on Iran's oil exports are making it difficult to run the affairs of the country, Radio Farda writes in the article Rouhani Admits Without Oil Exports The Government In Iran Is Broke. The remarks are in sharp contrast to Rouhani's previous statements in which he portrayed a promising picture of the country's economy. In recent months, he and his senior aides have said repeatedly that the country's economy was growing, the inflation rate was on a declining curve and non-oil exports were making up for lost oil sales.
Speaking in the city of Kerman in south-eastern Iran on Tuesday, November 12, Rouhani admitted for the first time that "the country's situation is not normal," and that "Iran is experiencing one of its hardest years since the 1979 Islamic revolution" which brought Shiite clerics to power. "Without money, we cannot run the affairs of the state," Rouhani said referring to the sharp decline in Iran's oil revenues, adding, "Although we have some other incomes, the only revenue that can keep the country going is the oil money."
Rouhani said Iran needs $45 billion annually to run its government, adding that Iran would have had an oil revenue of $60 billion if we could export oil. "We have never had so many problems in selling oil. We never had so many problems in keeping our oil tanker fleet sailing," Rouhani said, asking "How can we run the affairs of the country when we have problems with selling our oil?" He said, "It is difficult to reactivate oil wells when extraction is suspended," adding that Iran has spent $800 million in 2015 to bring oil wells back online following international sanctions.
Rouhani explained that to some extent Iran can make up for the deficit in oil revenue by collecting full taxes but noted that the government is able to collect only up to one third of estimated taxes. Some of Iran's biggest companies, run by religious foundations that operate under the aegis of Supreme Leader Ali Khamenei, reportedly do not pay any tax and at the same time they are a burden on the country's annual budget.
Speaking about the heavy burden of sanctions on his administration, Rouhani said "It is difficult to trust Trump. Iran would have entered negotiations with the United States had there been another President in office in Washington."
Referring to his visit to New York to take part in the UN General Assembly meeting in late September, he added that Iran would have sorted out its problems with America before the end of September if there was another U.S. President in office. Before and during Rouhani's visit to New York, French President Emmanuel Macron tried in vain to facilitate a meeting between Trump and Rouhani. The New Yorker magazine wrote on September 30, quoting diplomatic sources that apparently a deal was planned in New York, which hinged on Rouhani, Trump and French President Emmanuel Macron having a phone conversation on September 24 to seal a four-point deal that would have lifted U.S. sanctions on Iran. But that deal was never made as the scheduled teleconference between Macron, Rouhani and Trump never materialized.
Several other world leaders including Japan's Prime Minister Shinzo Abe had also called for a meeting between Trump and Rouhani at the time, but Iranian Supreme Leader Khamenei strictly prohibited any negotiations with the United States.
Rouhani said on Tuesday without naming anyone, "Individuals who are not familiar with economics and budgeting say oil can be sold later, but they are mindless of the fact that it is not prudent to close the oil tap and deprive the country of its wealth." He once again defended the 2015 nuclear deal with the West and said that leaving the Joint Comprehensive Plan of Action will bring back UN sanctions against Iran. "Iran's interest is in remaining in the deal," Rouhani emphasized. In another speech a day earlier, Rouhani said if Iran remains in the nuclear deal for one more year, it can buy and sell weapons and that would be "a major political and security achievement."
Critics say that remark was simply made to please the IRGC, otherwise, with the sanction regime in place, Iran is in deep trouble buying and selling anything on the international market, let alone weapons.