The Trump administration’s “Operation Economic Outcast,” launched on Aug. 24 to economically isolate Iran, is showing signs of success as Tehran’s efforts to reroute trade around the U.S. blockade of the Strait of Hormuz encounter growing logistical problems.
In response to the U.S. blockade, Iran vowed to send more goods overland, but “on the ground, it isn’t going according to plan,” The Wall Street Journal reported on Wednesday.
Thousands of containers are stuck at ports in Pakistan, the United Arab Emirates and Saudi Arabia, while Iranian trucks wait days at border crossings with Pakistan, Turkey, Afghanistan and Turkmenistan, according to the outlet.
In some cases, delays stem from increased truck volume at smaller crossings that lack the manpower to cope. In others, truckers face bureaucratic hurdles from their own government, “dealing Tehran a self-inflicted blow and throttling trade through its few remaining economic release valves,” the Journal reported.
Truckers also face rising costs. The Iranian Truckers’ Union reported that Pakistani authorities demanded from some drivers, “the equivalent of more than $10,000 each to cross, an unprecedented amount.”
The delays are hampering Iran’s ability to import basic goods. One driver reported that tons of apricots had spoiled, while another said he had waited for days at the Pakistan border with a shipment of meat bound for Iran. Iron ore, cement and bottled gas also remain stuck at the border, the Journal reported.
Ehsan Malekzadeh, chairman of the Iranian International Transport Companies Association, told Mehr News Agency, a semi-official state news agency, that 3,700 trucks were stranded at a crossing to Turkey and 700 at Iran’s main crossing into Pakistan, the Journal reported.
In another setback, Iranian airline Mahan Air, which has been under U.S. sanctions over its alleged support for Iran’s Islamic Revolutionary Guard Corps, stated on Wednesday that it was suspending flights to Oman and Turkey.
The move came after the U.S. Department of the Treasury announced on Sept. 8 that it would sanction 36 targets supporting Iran’s aviation sector, including companies linked to Mahan Air.
“Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system,” Scott Bessent, U.S. treasury secretary, said.
‘Unpredictable results for Iranian leadership’
The economic pressures are contributing to Iran’s worsening inflation. The rial fell past 2 million to the dollar in August and reached about 2.2 million per dollar on Sept. 2. Consumer prices were 87.9% higher year over year in July, while food inflation reached 128% in August, according to Iran’s Statistical Center.
Citing comments to KhabarOnline by Majidreza Hariri, president of the Iran-China Chamber of Commerce, the Journal reported that transporting a single container from China to Iran costs about $12,000 by land, compared with $3,000 by sea.
Rising costs are passed on to average Iranians, “with unpredictable results for the Iranian leadership,” the Journal reported. “Food inflation rose to 128% in August, according to Iran’s official statistics office.”
The Journal reported last week that Iran’s government doubled the price of gasoline for drivers who exceed their monthly subsidized quota, from 50,000 to 100,000 rials per liter. The change took effect Sept. 7 and was the second such increase since December.
Protests and strikes among transportation workers have followed the price increase. About 120 taxi drivers in the eastern province of Kerman protested cuts to their subsidized fuel allocations, while workers for Snapp, an Iranian ride-share and delivery service, went on strike in several cities, according to the Journal.
A 2019 increase in gasoline prices sparked nationwide protests and a government crackdown. On Aug. 24, Iran’s national police chief, Ahmad-Reza Radan, warned that economic hardship, gasoline prices and unemployment could fuel unrest.
The Trump administration has framed “Operation Economic Outcast” as an effort to economically isolate Iran, rather than as a campaign for regime change. But Iranian parliament speaker Mohammad Bagher Ghalibaf warned on Aug. 21 that economic hardship could threaten the Islamic Republic itself, saying, “If people are hungry and we don’t have financial circulation, economic growth and domestic production, we will not endure.”
