A shop in Tehran, Iran's capital [AP]
A shop in Tehran, Iran's capital [AP]

As Iran's economic crisis deepens, concerns are growing that the cornered Iranian leadership may resort to military action, The New York Times reported Tuesday (local time).

The United States is seeking to shift its confrontation with Iran away from direct armed conflict and toward economic sanctions, but analysts say Iran — already backed into a corner — has little left to lose, even if it were to restart a war.

"The more pressure the US puts on third countries to cut off Iran's remaining lifelines, the more Iran will want to demonstrate that such measures come at a price," Sina Toossi, an Iran expert at the Center for International Policy, told the Times.

Iran's leadership has responded with a string of hardline statements since Washington announced plans to tighten economic sanctions against Tehran.

Mohsen Rezaei, secretary-general of Iran's Supreme National Security Council, warned on state television Saturday that any country participating in what he called the US-led economic war would be treated as an enemy, and vowed that not a single drop of oil would leave the Persian Gulf.

Acting Defense Minister Majid Ebn Alreza said "all pressure that threatens the livelihood and security of our people is part of a war," adding that Iran would "expand the battlefield to protect our people."

The Times noted that the intensity of these statements reflects how severe Iran's economic crisis has become.

Iran's oil exports — the backbone of its economy — have been driven to near zero by a US maritime blockade, according to reports.

The Iranian rial has lost an additional 41 percent of its value since nationwide anti-government protests erupted last December.

Since then, prices have surged, with some medicines rising by as much as 500 percent, leaving many Iranians unable to afford basic necessities, the Times reported.

An energy crisis is also worsening inside Iran. BBC Persian recently broadcast footage of Iranians lining up at gas stations, unable to find fuel.

Analysts say the standoff between the US and Iran is increasingly at risk of devolving into a game of chicken — a test of which side can endure the pain longer.

However, experts said China, Iran's largest oil buyer and a major trading partner, is unlikely to join the sanctions push.

China has previously rejected US sanctions targeting companies in other countries, viewing them as an unjust attempt to control and pressure foreign governments.

Turkey and Iraq, both major trading partners of Iran, are also seen as unlikely to sever their ties with Tehran entirely.

"Most major financial institutions already comply with existing US sanctions, but eliminating cross-border relationships and shadow business networks that have existed for hundreds of years will be a far more difficult task," said Ellie Geranmayeh, an Iran expert at the European Council on Foreign Relations.


mokiya@heraldcorp.com