The reimposition of US sanctions against Iran on Monday has ushered in what is likely to be a protracted period of heated rhetoric and standoff, as the Trump Administration threatens more pressure and Tehran warns that it can ramp up its nuclear programme again, Middle East experts say.

In a preview of the war of words that is likely to escalate, Iranian President Hassan Rouhani vowed to continue selling oil in defiance of the sanctions. As state television aired footage of military forces staging war exercises yesterday, Rouhani said the country is in an "economic war situation". "We will proudly break the sanctions," Rouhani said during a meeting of government officials in the Iranian capital.

In Washington, US Secretary of State Mike Pompeo said: "The Iranian regime has a choice. It can either do a 180-degree turn from its outlaw course of action and act like a normal country, or it can see its economy crumble."

It will take many weeks or months before the effectiveness of the Administration's maximum-pressure campaign against Iran can be judged. But what already is clear is that the renewed sanctions will be greeted by threats hurled between Washington and Tehran as the two governments grow more confrontational.

Advertisement

"We should look at today as the first day of an escalating maximum-pressure campaign, not a new status quo," said Richard Goldberg, an adviser at the Foundation for Defence of Democracies. "We're going to see an enormous amount of pressure brought to bear on the regime, to the point where it may have to consider negotiating with the Trump Administration or the regime will collapse."

The sanctioning of hundreds of Iranian individuals, companies and organisations was the final result of President Donald Trump's decision in May to withdraw from the nuclear deal, known officially as the Joint Comprehensive Plan of Action (JCPOA).

The sanctions target Iranian oil, banks and shipping companies. But many prominent banks and companies were left off the list of more than 700 names, as well as entire sectors like mining and computer sciences, suggesting a strategic decision to hold back some names for future sanctions.

A Sayyad 2 missile is fired by the Talash air defense system during drills in an undisclosed location in Iran. Photo / AP
A Sayyad 2 missile is fired by the Talash air defense system during drills in an undisclosed location in Iran. Photo / AP

Eight nations were given temporary waivers, including Iran's two biggest oil customers, China and India. Turkey, which buys natural gas from Iran, also was exempted from sanctions. Waivers also were given to projects under way at three nuclear power plants related to impeding Iran's ability to reverse course and restart its nuclear programme.

US officials say their goal is to force the Iranian Government to stop its support of militants in the region and, eventually, renegotiate the nuclear agreement forged by the Obama Administration.

But it is uncertain whether Iran would bend to American will under another round of pressure, or whether it can afford to simply wait until there is a new US president.

Patrick Clawson, an Iran expert at the Washington Institute for Near East Policy, said he met Iranians at a recent conference in Moscow whom he described as confident they could ride out the sanctions.

Kelsey Davenport, director of nonproliferation policy for the Arms Control Association, said there is danger of the US overreacting to Iranian rhetoric.

Iran "will continue to remind the international community that if the deal collapses or it no longer benefits Iran, it can ramp up its nuclear activity", she said. "It's critical to distinguish between the rhetoric and steps that actually violate the deal."

It is unclear whether the reimposed sanctions, which are opposed by all but a handful of countries in the world, will signal the end of the nuclear deal.

Britain, France, Russia, China and Germany, which all negotiated alongside the US, insist they want to keep it going.

Iran has said it could walk away and resume its nuclear programme, a step few expect Tehran to take.

The European Union is attempting to devise an alternative "special purpose vehicle" to continue trade with Iran, but it has had trouble finding a country willing to host it.

Even the Europeans, who consider the nuclear deal essential to their national security, may be softening their support after Danish officials accused Iran of trying to assassinate an Arab separatist leader living in Denmark.

Iran has denied the claims.

Bitter medicine for Iranian consumers

The price of medications has risen sharply while some made overseas are no longer available. Photo / AP
The price of medications has risen sharply while some made overseas are no longer available. Photo / AP

Iranians already struggling to get by amid spiralling prices fear even more hardship is on the way with Monday's restoration of crippling US sanctions.

At a Tehran pharmacy, customers said medicines were already getting further out of reach. Manijeh Khorrami, who had come to buy tablets for his diabetic mother, said the Iranian-made version's price had tripled in recent months and the foreign version was no longer available.

"Can it get worse than the current situation?" Khorrami said. "I don't know what will happen."

Iran's national currency, the rial, has plummeted for months and is now trading at 150,000 to one US dollar, compared to around 40,500 a year ago.

The new sanctions will likely undermine the rial even more.

Prices for everything from clothes and transportation to food have skyrocketed.

"Check the shops here one by one, there are no customers," said Hossein Ahmadi, whose purse shop is located on a normally busy commercial street in the Iranian capital. "People have kept their money for rainy days out of fear of sanctions while rent of the shop has gone up.

"I don't know how to explain this to my wife and children," he said.

At nearby clothes shops, a few women looked through the scarves and coats.

"A lot of people are not able to buy these things anymore," said one 22-year-old shopper, Mina Sholeh.

- Washington Post, AP