Iranian President Hassan Rouhani on Monday warned the United States against pursuing hostile policies toward his country, saying that preventing Iran from exporting oil would be "very dangerous." However, he did not rule out talks between the two countries.
In May, U.S. President Donald Trump pulled out of the 2015 international nuclear deal with Iran and announced sanctions against it. Washington is pushing allies to cut Iranian oil imports to zero and will restore sanctions on Iran's oil sales in November.
Under the accord, most international sanctions against Iran were lifted in 2016 in exchange for Iran curbing its nuclear program.
"Imposing sanctions on Iran to prevent us from selling our oil will be very dangerous ... and it cannot succeed," Iran's Students News Agency ISNA quoted Rouhani as saying at a meeting with foreign media senior editors in New York.
Rouhani, who is in New York for the annual United Nations General Assembly, said Iran would talk to Trump only if his administration proved its trustworthiness. Economic pressure would not force Iran to the negotiating table, Rouhani said.
"If Trump wants to talk to Iran, then he first should return to the nuclear deal," Rouhani said.
Foes for decades, Washington and Tehran have been increasingly at odds since May, with some U.S. officials privately calling for regime change in Iran. In July, Trump said he would be willing to meet Iran's leader without preconditions to discuss how to improve ties. Iran dismissed the offer.
Iran's rial currency has lost half its value in the past few months and fear of economic hardship has led to sporadic protests in several cities, with ordinary Iranians chanting slogans against Iranian leaders.
Rouhani has sought to reassure Iranians, many deeply frustrated by high unemployment and low living standards, that Iran's oil-reliant economy could withstand the U.S. pressure.
"The U.S. sanctions harm ordinary Iranians but also it puts pressure on foreign companies who have to withdraw from Iran's market, fearing America's sanctions," Rouhani said.
Despite Iran's fragile economy, weakened by decades of sanctions, corruption and mismanagement, it will be difficult for Rouhani to consider diplomacy with the United States, which is rejected by Iran's powerful hard-liners.
"Rouhani cannot take such a risk because, after Trump's withdrawal from the deal, his hard-line rivals are in a stronger position in Iran," an Iranian official said.
European powers have scrambled to protect Iranian oil revenues and shield companies from the U.S. measures to keep them operating in Iran, but many firms have pulled out regardless.
Iran has threatened to withdraw from the nuclear accord unless European nations move to neutralize the consequences of the U.S. exit.
"Iran will remain committed to the deal ... as long as other members remain committed to the pact and fulfill their promises," Rouhani said.
Some insiders said Rouhani holding talks with Trump would effectively kill the existing deal, which was championed by the Iranian president with the guarded backing of Iran's top authority, Supreme Leader Ayatollah Ali Khamenei.
"Rouhani's political career is in danger if he talks to Trump because then the multinational nuclear deal will be out of the picture and Rouhani will lose the support of his European allies for ignoring them," a senior Iranian official said.
The remaining parties to the Iran nuclear deal – the U.K., China, France, Germany and Russia – agreed Monday to keep working to maintain trade with Iran.
In a statement after a meeting with Iranian officials, the group said it is determined to develop payment mechanisms to continue trade with Iran despite skepticism by many diplomats whether this will be possible.
Several European diplomats said the idea is to create a barter system, similar to the one used by the Soviet Union during the Cold War, to exchange Iranian oil for European goods without money changing hands.
Speaking to reporters after the meeting, European Union foreign policy chief Federica Mogherini said the decision to set up such a vehicle had already been taken and that technical experts would meet again to flesh out the details.
The European Union has so far failed to devise a workable legal framework to shield its companies from the U.S. sanctions that go into effect in November, which, among other things, seek to choke off Iran's oil sales, diplomats said.
Highlighting how difficult it will be for the Europeans to come up with concrete solutions, French state-owned bank Bpifrance on Monday abandoned a plan to set up a financial mechanism to aid French firms trading with Iran.
The impending return of U.S. sanctions has contributed to a slide in Iran's currency. The rial has lost about two-thirds of its value this year, hitting a record low against the U.S. dollar this month.
