New: Biden's policies have increased Iran's accessible exchange reserves by $27B (over a 750% increase) in under a year!
How? 1⃣By refusing to enforce U.S. law and put sanctions on Iran's oil exports. 2⃣By voting for the IMF's $5B reserve bailout to the regime.
Details in🧵
How? 1⃣By refusing to enforce U.S. law and put sanctions on Iran's oil exports. 2⃣By voting for the IMF's $5B reserve bailout to the regime.
Details in🧵
2. Sourcing: Before the U.S. withdrew from the JCPOA, Iran's reserves ($122B) were all available to the regime. New U.S. sanctions locked up a bit more than $90B of those.
In Dec. 2019, we declassified that Iran only had access to $10B reserves. cfr.org/event/conversa…
In Dec. 2019, we declassified that Iran only had access to $10B reserves. cfr.org/event/conversa…
3. In April 2021, the IMF disclosed that Iran was down to $4B accessible reserves at the end of 2020. That matched our assessment. Now they estimate Iran will be up to $31.4B in accessible reserves by the end of 2021.
(Note: They also revised their 2020 projection. I disagree.)
(Note: They also revised their 2020 projection. I disagree.)
4. They also estimate that next year Iran will gain $11.5B more reserves. That's entirely dependent on whether the U.S. lets them get away with exporting oil and financing their terror ambitions.
That projection (like most of IMF's future estimates) is quite speculative IMHO.
That projection (like most of IMF's future estimates) is quite speculative IMHO.
5. Where did it get this money from? At least $8-10B is from increased oil sales to China over 2019-2020 levels. Biden has not sanctioned Chinese oil companies, despite months of weak threats.
$4.96B is from an ill-advised IMF SDR allocation (see tweet).
$4.96B is from an ill-advised IMF SDR allocation (see tweet).
https://twitter.com/forum_american/status/1409924666840563716?s=20
6. Caveat: The $90B of inaccessible funds has probably decreased since January 2021 - @SecBlinken has likely allowed Iran access to some of their funds, which decreases their incentives to strike any future deal. Why does this matter?
7. The frozen funds are massive bargaining power. Last year, Iran faced a balance-of-payments crisis. With only $4B left, it faced a enormous challenges trading abroad. Buoyed to over $30B it faces little pressure to negotiate for sanctions relief.
8/end: A chief culprit in the failure of ongoing negotiations has been both insufficient carrots and sticks. Keeping Iranian funds frozen and accessible funds very limited gives the regime more reasons to reach a deal.
Because pressure was reduced, diplomacy is failing.
Because pressure was reduced, diplomacy is failing.
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