Iran sanctions to push global economy into recession

The escalating trend of crude prices caused by the Western sanctions against Iran The escalating trend of crude prices caused by the Western sanctions against Iran could bring about even a higher risk of recession in the global economy, a report says. In a new report on Sunday, Reuters highlighted the fact that economic embargoes cannot halt Tehran’s nuclear energy program and argued that the sanctions have only “triggered an oil price spike that could trigger a global recession.”
The report pointed to the recent warnings by US President Barack Obama and IMF chief Christine Lagarde that tensions over Iran would sharply raise the crude prices and lead to “an economic shock.”
The report also said that a new oil shock to the already fragile global economy and against the backdrop of the tightening austerity measures by the Western governments and the rising unemployment will dramatically hit the consumers’ confidence and “that would be a blow to businesses, which would also have to cope with higher fuel prices and would likely cut output and jobs.”
According to the article, after the EU’s January decision to ban the imports of the Iranian crude, figures in March showed that the eurozone has slid into greater recession with the private sector activity, indicating an unexpected sharp drop.
Elsewhere in China, the manufacturing activity also fell to a four-month low of 48.1 in March.
Since December 2011, global crude prices have risen by 20 percent, and if Iran, as the world’s third oil exporter, cuts its exports following the enforcement of sanctions, or if Tehran goes ahead with its contingency plan to choke the Persian Gulf’s strategic energy corridor, the Strait of Hormuz, the subsequent price hikes will further aggravate the situation for the West’s beleaguered economies.
The US, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear energy program.
The US and the EU have used the pretext to impose international and unilateral sanctions against Iran.
On January 23, EU Foreign Ministers met in Belgium and approved new sanctions against Iran aimed at banning member countries from importing Iranian crude oil and carrying out transactions with its central bank.
The EU’s decision followed the imposition of similar sanctions by Washington on Iranian energy and financial sectors on New Year’s Eve.
Iran refutes the allegations, arguing that as a committed signatory to the nuclear Non-Proliferation Treaty and member of International Atomic Energy Agency (IAEA), it has the right to use nuclear technology for peaceful use.