In May the United States pulled out of a multinational deal to lift sanctions against Iran in return for curbs to its nuclear program. Washington has since told countries they must halt all imports of Iranian oil from Nov. 4 or face US financial measures.
This may cut Iran’s hard currency earnings from oil exports, and the prospect has triggered a panicked flight of Iranians’ savings from the rial into dollars, weighing on an already ailing local currency, hit by economic woes and financial difficulties at local banks.
Speaking to a news conference at a NATO leaders’ summit in Brussels, Trump said Iran was treating the US with ‘so much more respect’ following the move and he expected Tehran to reach out for a fresh deal.
“I know they’re having a lot of problems and their economy is collapsing. But I will tell you this: at a certain point they’re going to call me they’re going to say ‘Let’s make a deal’. They’re feeling a lot of pain right now.”
Tehran’s Grand Bazaar was hit by strikes late in June and protesters angered by the rial’s collapse clashed with the police and traders massed outside parliament to complain about a sharp fall in the value of the national currency.
European powers still support the 2015 deal, under which Tehran agreed to limit its nuclear development in exchange for international sanctions relief.
They say they will do more to encourage their businesses to remain engaged with Iran, though a number of firms have already said they plan to pull out as they also face sanctions following Trump’s decision.
US Secretary of State Mike Pompeo on Thursday called on American allies to help impose economic pressure on Iran.
“We must cut off all funding the regime uses to fund terrorism & proxy wars,” Pompeo said in a Twitter post ahead of his scheduled meeting with European Union’s foreign affairs and security policy representative Federica Mogherini in Brussels.