Iran's stockpile of hard currency has skyrocketed during the Biden administration, rising from just $4 billion at the end of 2020 when sanctions were at their height, to more than $31 billion by the end of 2021, according to projections by the International Monetary Fund.
The Biden administration's decision to pursue diplomacy with Iran and unwind the Trump administration's sanctions has helped the country recover from its cash shortage, according to the IMF’s projections. The group says Iran's cash reserves will top $31 billion by the end of the year and increase up to $42.9 billion by the end of 2022. This number could be even higher if the United States reenters the 2015 nuclear deal and removes all sanctions imposed by the Trump administration. Iran had $122 billion in cash reserves in 2018, when the Trump administration began to tighten the economic noose on Iran. That number dropped to $4 billion by the end of 2020, during the height of the former administration's "maximum pressure" campaign.
Iran's access to cash has been bolstered by the Biden administration's lax enforcement of sanctions on the country's illicit oil trade, which has increased to record levels amid a buying spree from China, the number-one importer of illegal Iranian crude oil. While Tehran's oil sector is still sanctioned by the United States, experts told the Washington Free Beacon last week that the Biden administration has turned a blind eye to Tehran's exports, enabling countries such as China, Russia, and Syria to provide the hardline regime a financial lifeline.
The IMF's projections are the clearest sign to date that the Biden administration is serious about helping Iran's hardline regime claw back from the brink of economic collapse. Republican leaders in Congress, who are widely critical of the Biden administration's approach to diplomacy with Iran, maintain that the further removal of sanctions will embolden the ruling regime and help it fund terrorist groups across the Middle East, including those responsible for conducting a drone strike late last month on a U.S. military outpost in Syria.
Gabriel Noronha, a former State Department special adviser for Iran under Secretary of State Mike Pompeo, said the Biden administration gave up U.S. leverage on Iran by unwinding sanctions before it extracted assurances from Tehran that Iran will stop its nuclear buildup and end its support for terrorism.
"At the end of the Maximum Pressure Campaign in January 2021, Iran was facing a simultaneous debt, inflation, unemployment, and balance of payments crisis caused by massive U.S. economic pressure," Noronha, the executive director of the Forum for American Leadership, a national security think tank, told the Free Beacon. "Now the regime is making tens of billions in unsanctioned oil sales with China while Biden's Treasury Department looks the other way and even supported the IMF giving Iran a $5 billion currency bailout."
"Instead of getting a better deal or depriving the regime of funds for its nuclear program and terrorism," Noronha said, "the Biden administration has obtained zero concessions from the regime in its 10 months of appeasement.
Data from Iran's budget and planning offices showed the country's debt would increase more than 2,000 percent by 2027, from $68 billion to $1.39 trillion, if U.S. sanctions remained in place. If sanctions are unwound, however, Iran will only be around $561 billion in debt by 2027. It was also projected that the Iranian rial—which is already almost worth nothing—would devalue by 10 times the current amount by 2027 if sanctions are not removed.
This is primarily why Iran is pressuring the Biden administration to unwind sanctions before it agrees to a revamped version of the nuclear deal. It remains unclear, however, how long any sanctions relief will remain in place. Republicans in Congress have vowed to immediately trash any deal that is reached between the United States and Iran once Democrats are out of office.
Iran appears to be aware of this possible outcome. Ali Shamkhani, the secretary of Iran's Supreme National Security Council, a ruling body that holds power over the country's policies, said last week that "the U.S. president has no authority [and] is not willing to provide any guarantees [the United States will not leave the nuclear deal again]," according to comments cited in the country's state-controlled press.