Iran & Venezuela able to complete mutual aid deal to get around illegal sanctions regime, despite implicit Canadian support for extreme US threats
Photo Credit: (Oriconco Tribune / Google Images)
Written by: Lahari Nanda
Economic sanctions on Iran and Venezuela might hold back their economies from filling the hole left by coronavirus.
According to Global Affairs Canada (GAC), Canada imposed sanctions on Iran in 2010 through its Special Economic Measures Act, in lockstep with its allies the United States and European Union.
Major Iranian exports include oil and metals. Former US President Barack Obama’s milestone policy deal with Iran that lifted US sanctions allowed the Iranian Gross Domestic Product (GDP) to grow by 14.7%.
According to The Washington Post, this growth once again turned negative after sanctions, stricter than before, were imposed again in 2018. Canada has sided with its political and economic ally in imposing sanctions against Iran. Despite this, NPR claims that Iran’s economy is being sustained by “economic diversity” in domestic consumption.
Iran’s oil production and exports have been halved by these sanctions to prevent the development of nuclear weapons. The United States itself possesses more than 6000 nuclear warheads and Canada supplies enriched nuclear fuel to countries for their nuclear arsenals.
A drastic reduction in export revenue has led to a stark increase in Iran’s Gross National Income catalyzed by an inflation of more than 18% between 2018 and 2019 since the imposition of the 2018 sanctions. This information has been sourced from the World Bank.
Now, in the midst of a pandemic, the nation of 81.8 million is amongst the 10 most affected nations by novel-coronavirus. Similar sanctions imposed on Venezuela by the US and Canada has made both nations support each other by trading with each other.
On May 24, according to Venezuelanalysis.com, five ships with fuel from Iran docked in Venezuela, filled with approximately 45.5 million gallons of gasoline and related fuel products. Two countries with sanctions imposed on them by North American superpowers are now coalescing to support each other through the economic hardships induced by the pandemic combined with sanctions. This was done despite threats from the United States to illegally prevent the economic exchange from occurring, by deploying their Navy fleet to block the ships.
This alliance, while necessary for Iran and Venezuela’s economies to survive, may also become a sore point for Canada from the standpoint of the oil market.
Canada is not a part of the Oil Producing and Exporting Countries (OPEC) organization, but still remains one of the largest producers of oil in the world. Despite their massive reserves of oil, Iran and Venezuela have limited oil market clout as sellers due to the sanctions imposed on them. The resulting inner trade circle of OPEC countries may shadow Canada’s presence as a seller, especially as sanctioned OPEC countries are forced to reduce prices to sell their goods.
Historically, Canada’s strong individual stance vis-à-vis the “War on Terror” has shown that it is not afraid of disagreeing with US foreign policy. However, economic and political relations have become stronger since then, implying Canada’s stronger obligation to remain in lockstep with the US.
However, being politically overshadowed by the US’ foreign policy may put Canada at a loss in the global oil market, as illegal sanctions will not be obeyed by countries that need their economies to get back on its feet.
Canada’s continued sanctioning of Iran and Venezuela, against international law, is a dangerous gamble and must be evaluated independent of its relations with the United States of America.
More Articles