(Bloomberg) -- Iran’s supreme leader scorned the idea of negotiations to ease his country’s tense standoff with the U.S. in his first comments since being sanctioned by President Donald Trump.“If we agree in negotiations to their demands, they will make the nation miserable,” Ayatollah Ali Khamenei said on Wednesday, arguing Washington was attempting to strip Iran of its economic and defense capabilities. “And if we don’t, they will go on creating political frenzy, fueling propaganda and applying pressure.”Trump abruptly canceled planned airstrikes against Iran for shooting down last week an American drone, which U.S. officials say was flying through international airspace. But tensions have continued to escalate with leaders trading threats and insults as the risk of military escalation in the world’s top oil-exporting region soars.U.S. ‘Maximum Pressure’ Worked on Iran Before, It May Not AgainKhamenei spoke after Iranian officials said the wreckage of a U.S. drone was found four miles inside its territorial waters, offering one of Iran’s most detailed accounts of an incident that brought the Middle East to the brink of war.“After the shooting down of the drone, initial actions were taken and its location was identified,” Brigadier General Majid Fakhri, the head of the Iranian Armed Forces’ Geographical Organization, was cited as saying by the semi-official Tasnim news agency.Ship AttacksTrump on Tuesday vowed to meet any strike on the U.S. with overwhelming force after Iran said the path to a diplomatic solution had closed and characterized the White House as suffering from a “mental disorder.”Tensions have spiked in the Gulf since May, when the Trump administration revoked waivers on the import of Iranian oil, squeezing its economy a year after the U.S. walked away from the landmark 2015 deal meant to prevent the Islamic Republic from developing a nuclear weapon. Since then, a spate of attacks on oil tankers near the Strait of Hormuz, a shipping chokepoint, have convulsed the region and pushed up oil prices. The U.S. has blamed those attacks on Iran, which denies involvement.The new penalties are unlikely to have a significant impact on a country that’s already in recession due to stringent U.S. sanctions on its oil sector and has been largely shut out of the global financial system. The U.S. has sanctioned more than 80% of Iran’s economy, according to Secretary of State Michael Pompeo, who was in Saudi Arabia and the United Arab Emirates this week to rally a front against Iran.Still, the targeting of Khamenei shocked some Iranians because he’s considered a spiritual guide and a holy man by his most devoted followers.Trump has coupled his “maximum pressure” campaign of sanctions with invitations to sit down with Iranian leaders. In an interview that aired Sunday on NBC’s “Meet the Press,” the president said that he thinks Iranian leaders want to negotiate and he’s willing to talk with no preconditions except that the outcome must be Iran acquiring no nuclear weapons.The 2015 nuclear deal was designed to thwart any Iranian attempt to develop an atomic bomb, and international inspectors had repeatedly reported Iran complying with the terms of the accord.European powers are now attempting to convince Iran to continue abiding by the deal after Iranian officials warned the country would breach the deal’s cap on stockpiles of low-grade uranium by June 27.The U.K. ambassador to Tehran, Rob Macaire, said on Wednesday that extensive work was underway to boost a special mechanism designed to protect European trade with Iran from U.S. sanctions and ease the economic pressure on Iranians.“The U.K. is seriously concerned about Iran’s plans to reduce compliance under the JCPOA and firmly believes that it will be in no one’s interests,” he said in a statement. “We are committed to diplomacy to resolve differences between nations and to reduce dangerous regional tensions.”Russia, with deep political and economic ties to Iran, has denounced U.S. efforts to raise pressure on Iran and this week backed Tehran’s account of the downing of the U.S. drone. Foreign Minister Sergei Lavrov said Moscow was still calling for dialogue to resolve the crisis.“We will continue trying to convince our Iranian colleagues, our American colleagues, that they have to step back from the brink and start to resolve their disagreement through civilized dialogue,” Lavrov said in Moscow after talks with his U.A.E. counterpart Abdullah bin Zayed Al Nahyan. “This means an end to the policy of ultimatums, sanctions and blackmail.”But a top Russian Foreign Ministry official said hopes for a diplomatic solution to the crisis were fading after the penalties imposed on Khamenei.“There is a very narrow window left because this is an absolutely insulting step for intergovernmental relations. But hope dies last,” special envoy Zamir Kabulov told reporters.“Iran will never be alone if, God forbid, the U.S. ever takes absolutely crazy and irresponsible actions against it,” he said. “Not only Russia, but many countries sympathize with Iran.”\--With assistance from Golnar Motevalli and Arsalan Shahla.To contact the reporters on this story: Abbas Al Lawati in Dubai at aallawati6@bloomberg.net;Ladane Nasseri in Dubai at lnasseri@bloomberg.net;Henry Meyer in Moscow at hmeyer4@bloomberg.netTo contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, ;Lin Noueihed at lnoueihed@bloomberg.net, Mark Williams, Paul AbelskyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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