I have studied Iran for over a decade and lived there many years. I came to realize that Iran’s antagonism towards “the Great Satan” is the government’s raison d’être. The White House needs to be cognizant of the fact: anti-Americanism is the quintessential element on which the Iranian government bases its legitimacy. This is the underlying character of the system and it is beyond the control of a single individual, even the Supreme Leader, Ali Khamanei. No matter how many carrots the US gives the ruling clerics of Iran, Iranian leaders will still make every possible effort to damage US national interests, make life harder for the American people, scuttle US foreign policy and humiliate the American government.
Iran’s latest offensive is through currency. Two Iranian officials in the Foreign Ministry and the Ministry of Industries and Mines told me recently that Iran is starting the process of moving away from the dollar with respect to their foreign trade and international business.
Further, Iranian officials are reportedly asking other countries not to pay them with dollars, but to pay them in cash with Euros, the Chinese Yuan, the Indian rupee, or the Russian Ruble.
Safar-Ali Karamati, deputy director of International Affairs for Marketing and Crude Oil Operation in the state-owned National Iranian Oil Co, stated that Iran’s “top priority” is “to receive cash and oil demands in euro… Because of their [European Union] single monetary unit, European customers have no problem [paying] for crude oil deals in euro[s].”
So, why is Iran turning away from using the dollar?
On one hand, Iran is attempting to reduce its dependency on the dollar in case the next American administration or the International Atomic Energy Agency realize that Iran is cheating on the nuclear agreement and that sanctions should be rolled back. This is why Rouhani is rushing to seal business deals across Europe and Asia and encouraging other parties to use any currency other than the dollar.
Yet also, from Iran’s point of view, reducing the use of petrodollars will negatively affect not only US power on the global stage – and tip the balance of power against Washington – but also harm the living standards of ordinary American people.
After the Islamist leaders of Iran were ensured that they can freely do business with the rest of the world thanks to the White House’s efforts in removing the United Nations Security Council’s economic sanctions, the ruling clerics are now turning against the US and escalating their efforts to humiliate the US.
By getting the rest of the world en masse to pay Iran with currencies other than the dollar for its oil and gas sales, Iranian leaders hope this will subsequently lead to increases in US interest rates and American product prices in the long-term given Iran has the second largest gas and fourth largest oil reserves worldwide.
For their part, the Russians, Indians, Chinese and Europeans appear to be more than happy to fulfill Iran’s wish and pay the Islamist state of Iran with their country’s currency rather than the dollar in hopes of profiting from an opening Iranian market.
The Obama administration has been silent – hoping appeasement might change Iran’s attitude – but the mullahs’ currency war against the United States goes on.