Khamenei Says Iran Conducting Diplomacy To Lift Sanctions

Iran is engaged in diplomatic efforts to lift economic sanctions, the country’s ruler Ali Khamenei said Wednesday in a speech to officials and top regime insiders.

“Efforts and negotiations are currently in progress to lift the sanctions, which are proceeding properly as they should. However, it is equally important to simultaneously pursue the path of neutralizing sanctions, with the most crucial indicator being the reduction of inflation,” Khamenei maintained.

‘Neutralizing sanctions’ is the terminology used by the Islamic Republic for referring to evading restrictions, for example by illicit oil exports or conducting banking transactions through front companies and intermediaries.

Khamenei’s reference to ongoing talks follows a deal announced earlier this month, whereby the United States agreed to unblock $6 billion of frozen in South Korea in exchange for the eventual release of five US citizens held hostage in Tehran. In June, the US had also agreed to release $2.7 billion from Iraqi banks.

Many observers suspect that the Biden administration has reached an unofficial, partial deal with the Islamic Republic to release nearly $20 billion in total and not enforce oil export sanctions if Tehran stops its uranium enrichment at 60 percent, which is just short of weapons-grade material.

This in effect leaves Iran in a stronger position, able to extract more concessions by threatening to breach an unwritten deal in the future.

Having endorsed the ongoing talks, Khamenei immediately cautioned against a pro-Western outlook, saying those who see interaction with the world in “warm and intimate relations with a few Western countries” are making a mistake. “This outlook is wrong and relates to 100 years ago when a few European states controlled the world. Today, we should dispose of this old and reactionary outlook and understand that having global ties means relations with Africa, Latin America and Asia who have immense natural and human resources.”

Interestingly, Khamenei did not repeat his “Looking East” catchphrase, which means close ties with China and Russia with referring to Latin America and Africa. Sensing that amid sanctions and international economic isolation, Iranians blame the regime for their hardships, Khamenei and his subordinates claim that they are ready to extend a hand of friendship to many countries, with a few exceptions – namely Israel and the United States.

In fact, Khamenei praised the administration of President Ebrahim Raisi for having made progress in forging better ties with neighboring countries. In March, apparently urged by China, the Islamic Republic restored ties with Saudi Arabia after a seven-year hiatus.

What the aging Iranian ruler seems not to understand is that most wealthy and technologically advanced countries and large corporations take the US sanctions and Iran’s authoritarian political and economic conditions into account when making major trade or investment decisions. 

Iran’s close allies are Syria and Venezuela, which rely on Tehran’s assistance, and Russia which itself is under heavy sanctions.

Khamenei also tried to defend the Raisi administration’s record, by praising the government’s rosy economic statistics and “successes” that most experts and many regime politicians in Iran reject as political propaganda. Even many loyalist conservatives dispute the administration’s claims of having reduced inflation and boosted production, as annual inflation is well over 50 percent and the national currency is near its all-time lows, trading around 500,000 rials per US dollar.