US Launches Retaliatory Attacks On Iran-Linked Targets In Syria, Iraq

According to Iran's Customs statistics, the country's non-oil exports have declined by 10.7 percent year-on-year, reaching $40.47 billion during the first ten months of the current fiscal year, which began on March 21, 2023. In contrast, imports have increased by 12 percent to $54.4 billion, resulting in a non-oil trade imbalance of about $14 billion.

With Iranian oil exports sanctioned by the United States since 2018, and far less than their 2017 level, non-oil products play a larger role in securing much-needed foreign currency revenues for the country.

China, the UAE, Iraq, Turkey, and India are Iran's primary trade partners. Except for the UAE, which primarily re-exports Iranian goods, the remaining four partners have significantly reduced their imports of Iranian goods in 2023. China, for example, decreased its imports of Iranian non-oil products by 28 percent to $4.58 billion, while its exports to Iran increased by 8.6 percent to over $10 billion, according to China's Customs statistics.

China hasn’t taken any direct Iranian oil since 2020 and doesn’t acknowledge any Iranian oil imports in its Customs’ statistics. But according to Kpler’s data, seen by Iran International, Chinese independent small refineries, called teapots, imported about 1.2 million barrels per day of Iran’s crude oil and gas condensate, re-branded mostly as Malaysian oil.

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Turkey's Statistics Center also reported a 33 percent decline in imports from Iran, largely due to a reduction in natural gas imports. Turkey has drastically reduced its Iranian gas imports since July 2023, with average daily imports declining by 67 percent year-on-year to 10 million cubic meters.

India's official statistics also show a 7 percent decline in imports from Iran, while Iraq and the UAE have not published any statistics. However, according to Iran's Customs data, exports to Iraq decreased by 14 percent to $7.7 billion, while exports to the UAE increased by 8 percent to $5.2 billion.

Iran's Custom statistics reveal that the country exported $29.9 billion worth of crude oil, gas condensate, and mazut during the first ten months of the current Iranian fiscal year. Despite efforts to bypass US sanctions, including offering heavy discounts to Chinese refineries, Iran's oil revenues fell short, with an estimated $6 billion wasted.

Additionally, Iran's service exports amounted to $780 million during this period, significantly lower than previous years, where it reached around $4 billion annually. Iran typically experiences a negative balance in its trade services, amounting to approximately $7 billion.

In total, Iran's non-oil, and service trade balance appeared to be positive at $10 billion during the mentioned period. However, the country also faces significant capital flight, with the Central Bank reporting a negative net capital account of $15 billion for the previous Iranian year, indicating a substantial outflow of foreign currencies from the country.

The Treasury also said on Friday that it had imposed sanctions on six officials of Iran's Islamic Revolutionary Guard Corp's Cyber Electronic Command for malicious cyber activities against critical infrastructure in the United States and elsewhere.

The Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the key procurement network of suppliers of materials and sensitive technology for Iran’s ballistic missile and drone programs, including the Shahed-series UAV produced by Iran’s Shahed Aviation Industries Research Center (SAIRC).

On Friday, OFAC designated four entities that have functioned as covert procurement intermediaries for Hamed Dehghan and Pishtazan Kavosh Gostar Boshra (PKGB), both OFAC-designated individuals actively supporting various Iranian military organizations, including the Revolutionary Guards (IRGC).

In addition, OFAC also designated another Hong Kong-based front company involved in selling hundreds of millions of dollars' worth of Iranian commodities for the benefit of the IRGC's extraterritorial Qods Force (IRGC-QF).

“Iran’s continued proliferation of its advanced conventional weapons, including the UAVs and missiles that target US soldiers, remains a critical threat to the stability of the region,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.

“The deliberate targeting of critical infrastructure by Iranian cyber actors is an unconscionable and dangerous act,” Nelson added.

Iran has been facing an annual inflation rate of more than 40 percent in the past three years, which has impoverished millions of ordinary workers, whose monthly wages are below $150.

Over recent days, Iran’s currency, the rial, has hit an all-time low amid fears of US retaliation for a drone attack that killed three American servicemen in Jordan on January 28.

On Monday, the US dollar rose to more than 584,000 rials, the highest since February 2022, when it briefly traded at that level. The euro topped 630,000 and the British pound reached 740,000 rials. This will directly impact the cost for essential imports and will further fuel inflation, crippling the lives of many across all levels of Iranian society, particularly workers.

Fararu website in Tehran reported that the point-to-point inflation rate in December once again surpassed the 40% mark after five months. The index indicates that Iranian households spent approximately 40% more in the past month compared to the corresponding period of the previous year to meet their needs or purchase a range of goods and services.

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Mehraneh, a 30-year-old PhD student and a part-time university lecturer in Babolsar, northern Iran, told Iran International that the sharp decline in the value of rial in the past few days has left her “unbelievably stressed” awaiting another wave of inflation.

“Everyone has a number of dreams and goals. When this happens, confusion and uncertainty about the future hits you in the face and you see all your dreams and hopes slipping away,” added the student who lives on a monthly income of 80 million rials ($160).

Labor activists insist that workers’ minimum wages should be increased in proportion to the rising inflation rate in Iran. Employers have rejected this demand as “impractical” considering the current economic situation of the country.

While employers have demanded the minimum wage to be decided and specified regionally, workers strongly oppose such a policy.

Workers’ representatives in Iran’ High Council of Labor argue that a regional minimum wage plan could be abused by employers, thus running the risk of the exploitation in poorer regions.

Over recent years, many production plants have been suspended due to raw material shortages and difficulties in securing foreign currency.

(less than $110), Faramarz Tofighi, a labor activist stated that even in the least expensive regions of Iran, it is impossible to afford living costs with twice or three times this salary.

The activist accused the Iranian government of manipulating inflation statistics, saying it deliberately declares the official inflation rate lower than the actual rate.

Despite the constant requests of workers and experts, the government has refused to announce the exact indicators according to which it measures the inflation rate, Tofighi went on to add.

Tavakol, 52, the owner of a small clothes manufacturing company in Mashhad, northeastern Iran, highlighted the consequences of the recent rial crisis, saying it has brought about “chaos and confusion” in the market which is largely dependent upon imports.

“We have all stopped wholesaling our products till the currency fluctuations are over,” he pointed out, warning that if this recession period lingers, it will greatly impact workers, many of whom work on “daily verbal agreements” and have no long-term contracts or medical insurance.

Sanaz, 28, who works for a transportation company in the capital city Tehran, said the recent fluctuations have disrupted the ordinary lives of many Iranians.

“Three weeks ago, I was going to buy a foreign refrigerator in instalments. When I was paid on Tuesday, I went to buy it but the salesman told me the price has increased by 20 percent and buying in instalments is no longer an option due to currency fluctuations,” she explained.

However, Sanaz stressed that this is not just an economic issue: “The worst consequence of this crisis is widening class differences because it will give rise to numerous social anomalies.”

Nujaba's leader, Akram al-Kaabi, said in a statement that Nujaba and other factions in the Islamic Resistance in Iraq -- an umbrella group of hardline Shiite militias -- would continue operations.

The statement came a few days after Iraq's Kataib Hezbollah, another Iran-backed group, said it would pause attacks on US forces, a decision that followed the killing of three US service members in a drone attack in Jordan near the Syrian border by Iran-back militants. Part of Iran's so-called "Axis of Resistance," the umbrella group has claimed more than 150 attacks on US forces in Iraq and Syria since the Gaza war began.

Al-Kaabi said that he understood Kataib Hezbollah's decision.

The United States is preparing for strikes on Iran-linked targets in Iraq and Syria as it concluded that Iran manufactured the drone which slammed into a US base in Jordan. According to US officials, the response, expected to begin as soon as this weekend, will be “tiered,” mixing military actions with other steps that can be adjusted to signal that Washington does not seek further escalation.

Marking an escalation in tensions that have engulfed the Middle East, the drone attack in Jordan was the first deadly strike against US forces since the conflict began on October 7, when Tehran-backed Hamas invaded Israel, killed 1,200 mostly civilians and took hundreds of hostages.

In 2020, the US killed Iran Quds Force commander Qassem Soleimani and Kataib Hezbollah leader Abu Mahdi al-Muhandis in a drone strike at Baghdad airport. The strike came days after the US blamed Kataib Hezbollah for the killing of a US contractor.

Iraqi officials fear Washington's response to the killing of its soldiers could be severe, and along with Tehran pushed Kataib Hezbollah to stand down, sources told Reuters, hoping it could help de-escalate tensions.

Meanwhile, Iran's Revolutionary Guards, the IRGC, has reduced the presence of its senior officers in Syria due to a spate of deadly Israeli strikes and will rely more on its militia proxies.

Minister of Industry, Mine and Trade Abbas Aliabadi told Mohammad-Reza Farzin that the two car manufacturers face financial difficulties due to existing high inflation. The government claims the companies have not increased car prices, as an anti-inflationary measure, although prices have risen in the market in the past year. The move can be a prelude to a government-sanctioned rise of car prices.

Aliabadi requested an immediate increase in their credit limits, suggesting 100 trillion rials (about $200 million) for Iran Khodro and 50 trillion rials (about $100 million) for SAIPA. Aliabadi claimed that the request is in line with the Deputy President Mohammad Mokhber's approval for enhanced production in the final months of the Iranian year (which ends on March 20) to stabilize the market.

According to Iranian auto industry expert Farhad Ehteshamzad, the country’s state-owned carmakers are incurring daily losses of $3.7 million, totaling over one billion dollars annually. He claimed that the huge loss is the direct result of the government’s interventions in the auto industry.

Iran’s car industry is mired in a wide range of problems. The main manufacturers are owned by the state and enjoy huge incentives and support from the government. Despite the losses, Iran’s automotive industry is the third most active sector, after oil and gas sectors, accounting for about 10% of Iran's GDP and 4% of the workforce (700,000 persons). It was valued in 2020 at $26.4 billion by India-based Modor Intelligence, which forecasts 10 percent sectoral annual growth to 2026. This would be possible without sanctions and with a new infusion of investments and foreign partnerships.