Iran to U.S.: ‘You should … pay more’ for a new deal

By Parisa Hafezi and Michelle Nichols

UNITED NATIONS (Reuters) – Iranian President Hassan Rouhani said on Wednesday that the United States must “pay more” for any agreement that goes beyond the 2015 Iran nuclear deal that Washington abandoned.

Rouhani also appeared to reject meeting U.S. President Donald Trump while the two are in New York this week for the annual United Nations General Assembly and warned world leaders that the Gulf region was on the verge of going up in flames.

“Our response to talks under pressure is no,” Rouhani said in a speech to the U.N. even as the United States increased the pressure by sanctioning Chinese firms for dealing in Iranian oil despite U.S. sanctions.

The U.S.-Iranian confrontation has ratcheted up since last year, when Trump withdrew from Iran’s nuclear deal with major powers and reimposed sanctions that have crippled its economy.

Trump wants an agreement that goes beyond the 2015 nuclear deal and would further curb Iran’s atomic program, restrict its ballistic missile work and end its support for proxy forces in the Middle East.

“If you wish more, if you require more, you should give and pay more,” Rouhani said in his U.N. General Assembly address, without giving details.

In his own speech on Tuesday, Trump accused Iranian leaders of “bloodlust” and called on other nations to put pressure on Iran after Sept. 14 attacks on Saudi oil facilities that Washington blames on Tehran despite its denials.

The United States plans to increase its military presence in Saudi Arabia following the attacks.

Rouhani, however, said the Gulf region is “on the edge of collapse, as a single blunder can fuel a big fire.”

“We shall not tolerate the provocative intervention of foreigners. We shall respond decisively and strongly to any sort of transgression to and violation of our security and territorial integrity,” Rouhani said in his speech.

Trump had said there was still a path to peace and Rouhani, the nuclear pact’s architect has also left the door open to diplomacy, saying that if sanctions were lifted, Washington could join nuclear talks between Tehran and other powers.

NO TRUMP-ROUHANI MEETING SEEN

Despite the French and British leaders urging Rouhani to meet Trump, an Iranian official told Reuters there was no chance that the U.S. and Iranian presidents would meet this week.

“The chances of a meeting are zero. They know what to do. They should return to the JCPOA, lift sanctions and end this unfair maximum pressure on Iran,” the official said, referring to the Joint Comprehensive Plan of Action (JCPOA) 2015 deal.

“Then, of course, they can join the talks under the deal,” the official, who spoke to Reuters on condition of anonymity, added.

Under the 2015 deal, Iran limited its nuclear program in return for relief from economic sanctions that constricted its ability to trade with the world.

Since abandoning the deal last year, Trump in May tightened sanctions on Iran in an effort to reduce its oil exports – its main source of foreign exchange and government revenues – to zero.

On Wednesday, the United States sanctioned five Chinese people and six entities it accused of knowingly transferring oil from Iran in violation of Washington’s curbs on Tehran. The entities include two Cosco Shipping subsidiaries but not the parent company itself.

While it originally respected the deal despite Trump’s withdrawal, Iran has gradually reduced its compliance and has threatened to block the Strait of Hormuz in the Gulf, through which an estimated one-fifth of the world’s oil passes.

The United States has blamed Iran for a series of actions since May – some of which Iran has denied – that have roiled oil markets, including attacks on half a dozen tankers, shooting down a U.S. drone and the Sept. 14 attacks on Aramco facilities.

The airstrikes on the heartland of Saudi Arabia’s oil industry damaged the world’s biggest petroleum-processing facility and knocked out more than 5% of global oil supply.

Saudi Arabia’s Minister of State for Foreign Affairs Adel al-Jubeir said Riyadh was consulting “with friends and allies about the next steps to take” once an investigation into who was responsible for the attack was complete.

The United States, European powers and Saudi Arabia have blamed the attack on Iran, instead of the Yemeni Iran-aligned Houthi group that claimed responsibility. Iran distanced itself from the attacks but said it was ready for “full-fledged” war.

The confrontation could tip the balance of power in Iran in favor of hard-liners looking to constrain Rouhani’s ability to open up to the West, particularly because Supreme Leader Ayatollah Ali Khamenei’s aversion to Washington remains a formidable barrier to any diplomatic solution.

In the penultimate sentence of his speech, Rouhani raised the possibility of talks.

“This is the message of the Iranian nation: Let’s invest on hope toward a better future rather than in war and violence. Let’s return to justice; to peace; to law, commitment and promise and finally to the negotiating table,” he said.

(Reporting by Parisa Hafezi and Michelle Nichols; Additional reporting by John Irish, Arshad Mohammed and Humeyra Pamuk; Writing by Arshad Mohammed; editing by Grant McCool)

Don’t open ‘Pandora’s Box’ in Middle East, China warns

FILE PHOTO: Chinese Foreign Minister Wang Yi attends a news conference with Cuban Foreign Minister Bruno Rodriguez (not pictured) at Diaoyutai state guesthouse in Beijing, China May 29, 2019. REUTERS/Florence Lo

By Ben Blanchard

BEIJING (Reuters) – The Chinese government’s top diplomat warned on Tuesday that the world should not open a “Pandora’s Box” in the Middle East, as he denounced U.S. pressure on Iran and called on it not to drop out of a landmark nuclear deal.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked in the Gulf of Oman.

The United States blamed Iran for the attacks, more than a year after President Donald Trump withdrew from a 2015 Iran nuclear deal.

Iran denied involvement in the tanker attacks and said on Monday it would soon breach limits on how much enriched uranium it can stockpile under the deal, which had sought to limit its nuclear capabilities.

Acting U.S. Defense Secretary Patrick Shanahan announced on the same day the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Speaking in Beijing after meeting Syria’s foreign minister, Chinese State Councillor Wang Yi said the United States should not use “extreme pressure” to resolve issues with Iran.

Wang told reporters that China was “of course, very concerned” about the situation in the Gulf and with Iran, and called on all sides to ease tension and not head towards a clash.

“We call on all sides to remain rational and exercise restraint, and not take any escalatory actions that irritate regional tensions, and not open a Pandora’s box,” Wang said.

“In particular, the U.S. side should alter its extreme pressure methods,” Wang said.

“Any unilateral behavior has no basis in international law. Not only will it not resolve the problem, it will only create an even greater crisis.”

Wang also said that the Iran nuclear deal was the only feasible way to resolve its nuclear issue, and he urged Iran to be prudent.

“We understand that relevant parties may have different concerns but first of all the comprehensive nuclear deal should be properly implemented,” he added. “We hope that Iran is cautious with its decision-making and not lightly abandon this agreement.”

At the same time, China hopes other parties respect Iran’s legitimate lawful rights and interests, Wang said.

China and Iran have close energy ties, and China has been angered by U.S. threats against countries and companies that violate U.S. sanctions by importing Iranian oil, including Chinese firms.

China has had to walk a fine line as it has also been cultivating relations with Iran’s regional rival, Saudi Arabia, the Asian giant’s top oil supplier.

Iran’s foreign minister has visited China twice this year already. Saudi Arabia’s crown prince has also visited Beijing this year.

(Reporting by Ben Blanchard; Writing by Se Young Lee and Michael Martina; Editing by Clarence Fernandez, Robert Birsel)

Exclusive: Iran moves missiles to Iraq in warning to enemies

FILE PHOTO: A display featuring missiles and a portrait of Iran's Supreme Leader Ayatollah Ali Khamenei is seen at Baharestan Square in Tehran, Iran September 27, 2017. Nazanin Tabatabaee Yazdi/TIMA via REUTERS

By John Irish and Ahmed Rasheed

PARIS/BAGHDAD (Reuters) – Iran has given ballistic missiles to Shi’ite proxies in Iraq and is developing the capacity to build more there to deter attacks on its interests in the Middle East and to give it the means to hit regional foes, Iranian, Iraqi and Western sources said.

Any sign that Iran is preparing a more aggressive missile policy in Iraq will exacerbate tensions between Tehran and Washington, already heightened by U.S. President Donald Trump’s decision to pull out of a 2015 nuclear deal with world powers.

It would also embarrass France, Germany and the United Kingdom, the three European signatories to the nuclear deal, as they have been trying to salvage the agreement despite new U.S. sanctions against Tehran.

According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own.

“The logic was to have a backup plan if Iran was attacked,” one senior Iranian official told Reuters. “The number of missiles is not high, just a couple of dozen, but it can be increased if necessary.”

Iran has previously said its ballistic missile activities are purely defensive in nature. Iranian officials declined to comment when asked about the latest moves.

The Iraqi government and military both declined to comment.

The Zelzal, Fateh-110 and Zolfaqar missiles in question have ranges of about 200 km to 700 km, putting Saudi Arabia’s capital Riyadh or the Israeli city of Tel Aviv within striking distance if the weapons were deployed in southern or western Iraq.

The Quds Force, the overseas arm of Iran’s powerful Islamic Revolutionary Guard Corps (IRGC), has bases in both those areas. Quds Force commander Qassem Soleimani is overseeing the program, three of the sources said.

Western countries have already accused Iran of transferring missiles and technology to Syria and other allies of Tehran, such as Houthi rebels in Yemen and Lebanon’s Hezbollah.

Iran’s Sunni Muslim Gulf neighbors and its arch-enemy Israel have expressed concerns about Tehran’s regional activities, seeing it as a threat to their security.

Israeli officials did not immediately respond to requests for comment about the missile transfers.

Israeli Prime Minister Benjamin Netanyahu said on Wednesday that anybody that threatened to wipe Israel out “would put themselves in a similar danger”.

MISSILE PRODUCTION LINE

The Western source said the number of missiles was in the 10s and that the transfers were designed to send a warning to the United States and Israel, especially after air raids on Iranian troops in Syria. The United States has a significant military presence in Iraq.

“It seems Iran has been turning Iraq into its forward missile base,” the Western source said.

The Iranian sources and one Iraqi intelligence source said a decision was made some 18 months ago to use militias to produce missiles in Iraq, but activity had ramped up in the last few months, including with the arrival of missile launchers.

“We have bases like that in many places and Iraq is one of them. If America attacks us, our friends will attack America’s interests and its allies in the region,” said a senior IRGC commander who served during the Iran-Iraq war in the 1980s.

The Western source and the Iraqi source said the factories being used to develop missiles in Iraq were in al-Zafaraniya, east of Baghdad, and Jurf al-Sakhar, north of Kerbala. One Iranian source said there was also a factory in Iraqi Kurdistan.

The areas are controlled by Shi’ite militias, including Kata’ib Hezbollah, one of the closest to Iran. Three sources said Iraqis had been trained in Iran as missile operators.

The Iraqi intelligence source said the al-Zafaraniya factory produced warheads and the ceramic of missile molds under former President Saddam Hussein. It was reactivated by local Shi’ite groups in 2016 with Iranian assistance, the source said.

A team of Shi’ite engineers who used to work at the facility under Saddam were brought in, after being screened, to make it operational, the source said. He also said missiles had been tested near Jurf al-Sakhar.

The U.S. Central Intelligence Agency and the Pentagon declined to comment.

One U.S official, speaking on condition of anonymity, confirmed that Tehran over the last few months has transferred missiles to groups in Iraq but could not confirm that those missiles had any launch capability from their current positions.

Washington has been pushing its allies to adopt a tough anti-Iran policy since it reimposed sanctions this month.

While the European signatories to the nuclear deal have so far balked at U.S. pressure, they have grown increasingly impatient over Iran’s ballistic missile program.

France, in particular, has bemoaned Iranian “frenzy” in developing and propagating missiles and wants Tehran to open negotiations over its ballistic weapons.

Foreign Minister Jean-Yves Le Drian said on Thursday that Iran was arming regional allies with rockets and allowing ballistic proliferation. “Iran needs to avoid the temptation to be the (regional) hegemon,” he said.

In March, the three nations proposed fresh EU sanctions on Iran over its missile activity, although they failed to push them through after opposition from some member states.

“Such a proliferation of Iranian missile capabilities throughout the region is an additional and serious source of concern,” a document from the three European countries said at the time.

MESSAGE TO FOES

A regional intelligence source also said Iran was storing a number of ballistic missiles in areas of Iraq that were under effective Shi’ite control and had the capacity to launch them.

The source could not confirm that Iran has a missile production capacity in Iraq.

A second Iraqi intelligence official said Baghdad had been aware of the flow of Iranian missiles to Shi’ite militias to help fight Islamic State militants, but that shipments had continued after the hardline Sunni militant group was defeated.

“It was clear to Iraqi intelligence that such a missile arsenal sent by Iran was not meant to fight Daesh (Islamic State) militants but as a pressure card Iran can use once involved in regional conflict,” the official said.

The Iraqi source said it was difficult for the Iraqi government to stop or persuade the groups to go against Tehran.

“We can’t restrain militias from firing Iranian rockets because simply the firing button is not in our hands, it’s with Iranians who control the push button,” he said.

“Iran will definitely use the missiles it handed over to Iraqi militia it supports to send a strong message to its foes in the region and the United States that it has the ability to use Iraqi territories as a launch pad for its missiles to strike anywhere and anytime it decides,” the Iraqi official said.

Iraq’s parliament passed a law in 2016 to bring an assortment of Shi’ite militia groups known collectively as the Popular Mobilisation Forces (PMF) into the state apparatus. The militias report to Iraq’s prime minister, who is a Shi’ite under the country’s unofficial governance system.

However, Iran still has a clear hand in coordinating the PMF leadership, which frequently meets and consults with Soleimani.

(Additional reporting by Phil Stewart and Jonathan Landay in Washington; editing by David Clarke)

World Court hears Iran lawsuit to have U.S. sanctions lifted

By Stephanie van den Berg and Toby Sterling

THE HAGUE (Reuters) – Iranian lawyers asked the International Court of Justice on Monday to order the United States to lift sanctions imposed by the Trump administration against Tehran, but Washington described the suit as meritless.

At the start of a week of hearings in The Hague, the court’s president asked the United States to respect the outcome of the case that Iran filed in July. During their decades of animosity, both countries have ignored some rulings at the court.

Tehran’s suit says the U.S. sanctions, which are damaging the already weak Iranian economy, violate terms of a little-known friendship treaty between the two countries.

“The U.S. is publicly propagating a policy intended to damage as severely as possible Iran’s economy and Iranian national companies, and therefore inevitably Iranian nationals,” said Mohsen Mohebi, representing Iran. “This policy is plainly in violation of the 1955 Treaty of Amity.”

He said Iran had sought a diplomatic solution to the countries’ dispute but was rejected.

U.S. Secretary of State Mike Pompeo described Iran’s suit as “an attempt to interfere with the sovereign rights of the United States to take lawful actions, including re-imposition of sanctions, which are necessary to protect our national security”.

“We will vigorously defend against Iran’s meritless claims this week in The Hague,” he said in a statement.

A ruling is expected within a month, though no date has been set.

The ICJ is the United Nations tribunal for resolving international disputes. Its rulings are binding, but it has no power to enforce them.

U.S. President Donald Trump pulled out of a 2015 pact between Iran and major world powers under which sanctions were lifted in return for Tehran accepting curbs on its nuclear program. The Trump administration then announced unilateral plans to restore sanctions against Tehran.

Although Washington’s European allies protested against Trump’s move, most Western companies intend to adhere to the sanctions, preferring to lose business in Iran than be punished by the United States or barred from doing business there.

The United States and Iran have clashed at the court in the past since they became enemies after Iran’s 1979 Islamic Revolution. Iran ignored a 1980 U.S. suit at the ICJ over the seizure of American diplomats in Tehran, which the court found to be illegal.

In another suit and countersuit, the ICJ found that the 1955 treaty was still valid even though it was signed before the revolution. However, the court found in 2003 that neither actions by the United States against Iranian oil platforms nor Iranian attacks on American shipping violated the treaty.

(Writing by Toby Sterling; Editing by David Goodman, Peter Graff and David Stamp)

Iran threatens to hit U.S., Israel after Trump aide warns of ‘maximum pressure’

FILE PHOTO - Iranian cleric Ayatollah Seyed Ahmad Khatami delivers a sermon during Friday prayers in Tehran, Iran, May 26, 2017. TIMA via REUTERS

By Bozorgmehr Sharafedin and Dan Williams

LONDON/JERUSALEM (Reuters) – Iran warned on Wednesday it would hit U.S. and Israeli targets if it were attacked by the United States after President Donald Trump’s security adviser said Washington would exert maximum pressure on Tehran going beyond economic sanctions.

A U.S.-Iranian war of words has escalated since Trump withdrew Washington from the world powers’ nuclear deal with Iran in May, blasting it as flawed and reimposing sanctions to choke Iran’s economy and force it to renegotiate or change direction.

The U.S. turnaround, which scrapped a wary detente between Iran and the United States after decades of hostility, has drawn defiance from Tehran despite renewed unrest over economic privations and has unnerved other big powers where businesses have been debating whether to divest from Iran.

U.S. National Security Adviser John Bolton told Reuters the return of U.S. sanctions was having a strong effect on Iran’s economy and popular opinion.

“There should not be any doubt that the United States wants this resolved peacefully, but we are fully prepared for any contingency that Iran creates,” Bolton said during a visit to Israel, Iran’s enemy in the Middle East.

U.S. sanctions dusted off this month targeted Iran’s car industry, trade in gold and other precious metals, and purchases of U.S. dollars crucial to international financing and investment and trade relations. Farther-reaching sanctions are to follow in November on Iran’s banking sector and oil exports.

European powers have been scrambling to ensure Iran secures enough economic benefits to persuade it to stay in the deal. This has proven difficult, with many European firms keen to avoid financial penalties by the Trump administration.

“We expect that Europeans will see, as businesses all over Europe are seeing, that the choice between doing business with Iran or doing business with the United States is very clear to them,” Bolton said.

“So we will see what plays out in November. But (Trump) has made it very clear – his words – he wants maximum pressure on Iran, maximum pressure, and that is what is going on.”

Asked at a news conference later whether the United States had discussed any plans with ally Israel on how to capitalize on economic protests in Iran and if these posed any tangible threat to the Tehran government, Bolton said:

“Just to be clear, regime change in Iran is not American policy. But what we want is massive change in the regime’s behavior … We are going to do other things to put pressure on Iran as well, beyond economic sanctions.” He did not elaborate.

“PRICE OF WAR”

A senior Iranian cleric seen as close to Supreme Leader Ayatollah Ali Khamenei told worshippers at Eid holiday prayers in Tehran: “The price of a war with Iran is very high for America.

“They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted,” Ahmad Khatami said.

Iran’s Revolutionary Guards have said it could strike Israeli cities with missiles if it were threatened. Iran also has proxies in the region including Lebanon’s Hezbollah.

The Revolutionary Guards said on Wednesday they would continue increasing Iran’s defensive capabilities not surrender to U.S. pressure to scrap its ballistic missile program.

Last week, Khamenei – who has the ultimate say on Iranian policy – said the United States would avoid outright conflict because of Iranian military might.

“There will be no war…We have never started a war and they will not confront Iran militarily,” he said.

Trump’s campaign to isolate Iran and cripple its economy has put the old adversaries back on a collision course that European signatories to the nuclear accord fear will raise the risk of a broader Middle East war.

DEAL ‘SOFT ON IRAN’

Under the 2015 deal, Iran curbed its contested uranium enrichment program under U.N. monitoring and won an end to global sanctions in return.

Trump has condemned the deal as too soft on Tehran and would not stop it developing a nuclear bomb, though U.N. nuclear non-proliferation inspectors have repeatedly certified Iranian compliance with its terms.

Khatami, the prominent Iranian cleric, also said Trump’s offer of talks was unacceptable as he was demanding Tehran give up its ballistic missile program and scale back regional influence. Neither issue was covered by the 2015 agreement.

“Americans say you should accept what we say in the talks. So this is not negotiation, but dictatorship,” Mizan news agency quoted Khatami as saying.

Trump has said Iran must stop meddling in wars in Syria and Yemen, part of a foreign policy supporting regional allies in conflict with proxies of U.S.-backed Gulf Arab kingdoms.

Tehran has not given an inch to Trump’s pressure despite an economy beset by high unemployment and inflation and a rial currency that has lost half its value since April.

Thousands of Iranians have protested against price rises of some food items, a lack of jobs and state corruption. The protests over the cost of living have often turned into anti-government rallies.

“I think the effects, the economic effects certainly, are even stronger than we anticipated,” Bolton said.

“But Iranian activity in the region has continued to be belligerent: what they are doing in Iraq, what they are doing in Syria, what they are doing with Hezbollah in Lebanon, what they are doing in Yemen, what they have threatened to do in the Strait of Hormuz.”

The Strait is a strategic waterway for oil shipments which Iran’s Revolutionary Guards have threatened to block in response to Trump administration calls to ban all Iranian oil exports.

(Writing by Mark Heinrich; Editing by Janet Lawrence)

U.S. Navy says will protect commerce in face of Iran oil threat

FILE PHOTO: The Sterett Destroyer escorts the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during a transit through the Strait of Hormuz, February 14, 2012. REUTERS/Jumana El Heloueh/File Photo

By Bozorgmehr Sharafedin

LONDON (Reuters) – The U.S. Navy stands ready to ensure freedom of navigation and free flow of commerce, a spokesman for the U.S. military’s Central Command said on Thursday, after Iran warned it will block oil shipments through the Strait of Hormuz.

Iran has threatened in recent days to close the strait, a vital route for world oil supplies, if Washington tries to cut Tehran’s exports.

An Iranian Revolutionary Guards commander said on Wednesday Iran would block any exports of crude for the Gulf in retaliation for hostile U.S. action.

“The U.S. and its partners provide, and promote security and stability in the region,” Central Command spokesman Navy Captain Bill Urban said in an email to Reuters.

Asked what would be the U.S. Naval Forces reaction if Iran blocks the Strait of Hormuz, he said: “Together, we stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows.”

The Islamic Revolutionary Guards Navy (IRGCN) lacks a strong navy and instead focuses on an asymmetric warfare capability in the Gulf. It possesses many speed boats and portable anti-ship missile launchers and can lay naval mines.

A senior U.S. military leader said in 2012 the Guards have the ability to block the Strait of Hormuz “for a period of time” but the United States would take action to reopen it in such an event.

In May, U.S. President Donald Trump pulled out of a multinational deal under which sanctions on Iran were lifted in return for curbs to its nuclear program. Washington has since told countries they must stop buying Iranian oil from Nov. 4 or face financial measures.

(Reporting by Bozorgmehr Sharafedin; Editing by Matthew Mpoke Bigg)

Iran bans 1,300 imports as protesters, police clash over currency weakness

FILE PHOTO: A woman looks at exchange rates by the window of a currency exchange shop in Tehran's business district, Iran January 7, 2012. REUTERS/Raheb Homavandi /File Photo

By Andrew Torchia

DUBAI (Reuters) – Iran is banning imports of over 1,300 products, preparing its economy to resist threatened U.S. sanctions, amid rare public protests against the plunge of its currency to record lows.

Police patrolled Tehran’s Grand Bazaar on Monday as security forces struggled to restore normality after clashes with protesters angered by the rial’s collapse, which is disrupting business by driving up the cost of imports, witnesses said.

Traders from the bazaar, whose merchants supported Iran’s 1979 Islamic revolution, told Reuters by telephone that most shops remained closed.

“Police have dispersed the protectors. We are all angry with the economic situation. We cannot continue our businesses like this. But we are not against the regime,” said a merchant in the bazaar, who asked not to be identified.

Industries and trade minister Mohammad Shariatmadari slapped the import ban on 1,339 goods that could instead be produced within the country, Iran’s Financial Tribune newspaper reported on Monday, quoting an official document.

Prohibited imports include home appliances, textile products, footwear and leather products, as well as furniture, healthcare products and some machinery, the Tehran Times said.

The order suggests the U.S. sanctions threat is pushing Tehran back toward running a “resistance economy” designed to conserve foreign exchange reserves and become as self-sufficient as possible in many products.

The rial is under heavy pressure from the U.S. sanctions threat. It sank as low as 90,000 against the dollar in the unofficial market on Monday from 87,000 on Sunday and around 75,500 last Thursday, according to foreign exchange website Bonbast.com. At the end of last year, it stood at 42,890.

After U.S. President Donald Trump decided to withdraw from world powers’ deal with Iran on its nuclear program, some U.S. sanctions are to be reimposed in August and some in November.

This may cut Iran’s hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians’ savings from the rial into dollars.

Hundreds of merchants gathered in front of parliament in Tehran on Monday to protest at the rial’s fall, witnesses said.

In the Grand Bazaar, hundreds staged a similar protest, videos posted on social media showed. A larger, sustained series of protests could put pressure on President Hassan Rouhani, who has already been harshly criticized by hardliners for his economic record.

Ali Fazeli, the head of Iran’s Chamber of Guilds, a business association, told the semi-official Tasnim news agency later on Monday: “Business is as usual in the Grand Bazaar.”

State TV quoted Tehran’s deputy governor Abdolazim Rezaie as saying “no one has been arrested in the Tehran protests”, adding that all the shops will be open on Tuesday.

On Sunday, merchants at Tehran’s mobile phone shopping centers Aladdin and Charsou shut their shops to protest against the rial’s slide, Fars news agency reported.

RESISTANCE ECONOMY

Iran eased its “resistance economy” policy after many international sanctions were lifted in January 2016 under the nuclear deal. Rouhani announced plans to boost Iran’s foreign trade and give foreign companies a bigger role in its economy.

With Iran now aiming to close its markets to many foreign products and the government intervening to support locally owned companies, those goals look more distant.

Mehrdad Emadi, an Iranian economist who heads energy risk analysis at London’s Betamatrix consultancy, said the sanctions threat was strengthening interests in the Iranian government that favored tighter state control of the economy.

“In the coming months we will see much more intervention in the economy by the government, a centrally imposed style of management by dictat,” he said.

One result is likely to be a shift of influence over Iran’s non-oil foreign trade from the private sector, along with a strong presence by the government’s Revolutionary Guards, to near-complete dominance by the Guards, he added.

Emadi and other Iranian economists noted that Iran had imposed import bans during the previous sanctions era before 2016 with only limited success.

Many foreign goods continued to enter the country at higher prices as a result of corruption and smuggling, benefiting business interests with the close official ties needed to arrange the shipments.

The government is justifying its latest clampdown on imports by citing economic security. The Tehran Times quoted Mohammad Reza Pourebrahimi, head of parliament’s economic committee, as saying the ban would prevent an outflow of $10 billion of foreign currency.

The International Monetary Fund estimated in March that the government held $112 billion of foreign assets and reserves, and that Iran was running a current account surplus. These figures suggested Iran might withstand the sanctions without an external payments crisis.

But as U.S. pressure constricts Iran’s access to the international banking system, its ability to deploy some of those resources may have suffered. Indian government sources told Reuters last week that New Delhi was looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might close.

Concern about the rial’s vulnerability is prompting ordinary Iranians to pour money into non-cash assets. Tehran real estate prices have climbed and Iran’s stock market has jumped 17 percent since the end of May to a record high. Prices of gold coins have also risen sharply, local media reported.

(Editing by William Maclean)

Khamenei says curbing Iran’s missile program a ‘dream that will never come true’

FILE PHOTO: Iran's Supreme Leader Ayatollah Ali Khamenei speaks during Friday prayers in Tehran September 14, 2007. REUTERS/Morteza Nikoubazl/File Photo

ANKARA (Reuters) – Iran’s top leader said on Monday it would respond harshly to any attack and that Western demands for limits on its ballistic missile program are a “dream that will never come true”.

Tensions between Iran and the West have resurged since President Donald Trump pulled the United States out of world powers’ 2015 nuclear deal with Tehran, calling it deeply flawed.

European signatories are scrambling to save the accord, which they see as crucial to forestalling an Iranian nuclear weapons, by protecting trade with Iran against the reimposition of U.S. sanctions to dissuade Tehran from quitting the deal.

Under the deal, the Islamic Republic curbed its disputed nuclear energy program and in return won a lifting of most international sanctions that had hobbled its economy.

One of Trump’s demands – which European allies back in principle – is negotiations to rein in Iran’s ballistic missile program, which was not covered by the nuclear deal.

Iranian Supreme Leader Ayatollah Ali Khamenei again said this was non-negotiable. “Some Europeans are talking about limiting our defensive missile program. I am telling the Europeans, ‘Limiting our missile work is a dream that will never come true,” he said in a televised speech.

Trump also objected that the 2015 deal did not address Iran’s nuclear work beyond 2025 or its role in conflicts in Yemen and Syria. Though committed to the deal, European powers share Trump’s concerns and want broader talks with Iran to address the issues.

“Our enemies have staged economic and psychological … warfare against us and new American sanctions are part of it,” Khamenei told a gathering to mark the 29th anniversary of the death of Iranian revolutionary leader Ayatollah Ruhollah Khomeini.

“Tehran will attack 10 times more if attacked by enemies … The enemies don’t want an independent Iran in the region … We will continue our support for oppressed nations,” he said.

Khamenei said Iran had no intention of curbing its influence in the Middle East and urged Arab youth to stand up to U.S. pressure.

“Young Arabs, you should take action and the initiative to control your own future … Some regional countries act like their own people’s enemies,” he said in an allusion to U.S.-allied Gulf Arab states who have supported rebels fighting to topple Syrian President Bashar al-Assad, a close ally of Tehran.

(Writing by Parisa Hafezi; Editing by Mark Heinrich)

Maersk latest company to shun Iran as EU scrambles to save nuclear deal

FILE PHOTO: The Maersk ship Adrian Maersk is seen as it departs from New York Harbor in New York City, U.S., June 27, 2017. REUTERS/Brendan McDermid/File Phot

COPENHAGEN (Reuters) – Shipping group A.P. Moller-Maersk on Thursday joined a growing list of companies preparing to call a halt to doing business with Iran, casting doubts on whether European leaders can keep alive a nuclear deal with Tehran.

Maersk’s move comes a day after French energy group Total and other European companies signaled they could exit Iran ahead of a reimposition of sanctions following the United States’ decision to pull out of the Iran accord.

French President Emmanuel Macron said on Thursday that the European Union must protect European Union companies doing business with Iran from U.S. sanctions.

But Macron, joining EU leaders for a summit in Bulgaria, also said he recognized that big companies would want to protect their own interests.

“International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom,” he said.

U.S. President Donald Trump’s decision to abandon the 2015 nuclear accord with Iran means European countries that have since invested in the country will be at risk once new sanctions come into effect.

Maersk Chief Executive Soren Skou said: “With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the U.S., and we have that on a large scale.”

“I don’t know the exact timing details, but I am certain that we’re also going to shut down (in Iran),” Skou told Reuters in an interview following Maersk’s first-quarter earnings.

MSC, the world’s second biggest container shipping group after Maersk, said on Wednesday it would stop taking new booking for Iran.

Other companies which have warned they would wind down business in Iran following reinstated sanctions include German insurer Allianz, Siemens and Danish oil product tanker operator Maersk Tankers, previously owned by the Maersk conglomerate.

Maersk’s Skou said higher oil prices which followed the U.S. withdrawal were hitting its container shipping business because of higher bunker fuel prices.

Oil prices hit their highest level since November 2014 on Thursday, with Brent crude creeping ever closer to $80 per barrel. [O/R]

(Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen; Editing by Jon Boyle and Jane Merriman)

Merkel defends nuclear deal, Iran says won’t ‘surrender’ to U.S.

German Chancellor Angela Merkel speaks during the 2018 budget debate at the lower house of parliament Bundestag in Berlin, Germany, May 16, 2018. REUTERS/Hannibal Hanschke

By Bozorgmehr Sharafedin

LONDON (Reuters) – German Chancellor Angela Merkel pushed back on Wednesday against Washington’s rejection of the Iran nuclear deal, saying the accord helped outside powers worried about Tehran’s regional role to pursue their concerns with the Islamic Republic.

Iran reiterated it would not surrender to U.S. pressure and would resist U.S. “plots”, following President Donald Trump’s abandonment of the 2015 agreement last week.

Repudiating the result of more than a decade of diplomacy, Trump complained that the deal does not cover Iran’s ballistic missiles, its role in regional wars or what happens after the pact begins to expire in 2025.

Major European countries share Trump’s concerns but argue that the nuclear deal is the best way to stop the increasingly influential regional power from obtaining an atomic weapon.

Merkel reasserted a defense of the deal in remarks to lawmakers in the Bundestag lower house of parliament.

“The question is whether you can talk better if you terminate an agreement or if you stay in it … we say you can talk better if you remain in it,” she said.

“This agreement is everything other than ideal, but Iran is, according to all the knowledge of the international nuclear authorities, sticking to the commitments of the agreement.”

The deal between Iran and six world powers lifted most international sanctions in 2016 in return for Tehran curbing its nuclear program, under strict surveillance by the U.N. nuclear watchdog.

Trump last week announced he planned to reimpose an array of sanctions lifted by the accord, and the U.S. Treasury on Tuesday imposed sanctions on Iran’s central bank governor, three other individuals and an Iraq-based bank.

Iran meanwhile said the new U.S. sanctions were an attempt to derail efforts to save the deal.

“With such destructive measures, the American government is trying to influence the will and decision of the remaining signatories of the JCPOA (nuclear agreement),” Iranian Foreign Ministry spokesman Bahram Qasemi was quoted as saying by Fars news agency.

Iran has described the sanctions as illegal and has warned that if talks to rescue the accord fail, it would ramp up its nuclear program to a level more advanced than before.

Iranian President Hassan Rouhani said Trump expected Tehran to leave the deal after the U.S. withdrawal, but Tehran had refused to follow that plan by trying to save the deal with its remaining signatories.

“Trump played his first card, but miscalculated the second move,” Rouhani was quoted as saying by the ISNA agency.

GUARANTEES

He also said Iran would not surrender to U.S. pressures.

“They think they can make the Iranian nation surrender by putting pressures on Iran, by sanctions and even threats of war… The Iranian nation will resist against the U.S. plots,” Rouhani was quoted as saying by ISNA news agency.

However the top advisor to Iran’s Supreme Leader Ali Khamenei said he doubted Tehran’s talks with European nations to save the deal would be successful.

“I doubt that the talks with the Europeans will be fruitful. I hope we see good results, but …. we should become self-sufficient,” Ali Akbar Velayati said, Fars news agency reported.

European powers this week vowed to shore up the deal by trying to keep Iran’s oil and investment flowing, but admitted they would struggle to provide the guarantees Tehran seeks.

British, French and German foreign ministers met in Brussels on Tuesday to see how they can save the nuclear deal without the United States, but appeared hard-pressed over how their companies could continue doing business with Iran once Washington begins to reimpose sanctions.

Iranian Foreign Minister Mohammad Javad Zarif said his meeting with European Union officials in Brussels had been a good start, but he wanted to see guarantees materialize.

The Europeans and Iranians have tasked experts to come up with measures quickly and will meet again in Vienna next week.

Reuters reported on Wednesday that a senior Iranian official has met Chinese oil buyers this week to ask them to maintain imports after U.S. sanctions kick in.

(Reporting by Bozorgmehr Sharafed, additional reporting by Michelle Martin in Berlin, Editing by Raissa Kasolowsky, William Maclean)