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Foreign and finance ministers from the six Gulf nations hold a meeting in the Saudi capital Riyadh on December 18, 2011, ahead of a summit of the Gulf Cooperation Council leaders the following day which is expected to focus on accelerating regional turmoil and fears of Iran's growing influence in the wake of the U.S. withdrawal from Iraq. - 

Steve Chiotakis: U.S. Treasury Secretary Tim Geithner is in China today, asking Asian governments to stop doing oil business with Iran. China however doesn't look like it's gonna sever any ties. And Geithner's visit comes as the U.S. State Department demanded Iran free an American citizen the country convicted as a spy and has now sentenced to death. Tensions between the U.S. and Iran have been near a boiling point for more than three decades, and the country's weathered all kinds of economic sanctions.

But with the West's move to isolate its central bank -- and perhaps implement an even bigger oil embargo -- Iran's economy is really feeling the squeeze, as Marketplace's Jeff Tyler reports.

Jeff Tyler: Iran is almost entirely dependent on petro-revenue, with oil making up about 80 percent of exports. Tighter sanctions on Iranian oil could be devastating.

Karim Sadjadpour: There’s just an utter crisis of confidence right now in the Iranian economy.

Karim Sadjadpour follows Iran for the Carnegie Endowment for International Peace. He says that crisis in confidence has caused Iran’s currency -- the rial -- to lose about half its value in the last two months.

Sadjadpour: When I talk to people who are inTehran, they describe a mood of panic and frenzy. Long lines outside of banks. People desperate to get their money out of the country. Or desperate to change their rials to either dollars or gold.

So ordinary Iranians are suffering. But, thanks to oil revenues, the country’s leaders may persevere. Sadjadpour says a drop in the price of oil could help topple the regime. But it would have to be a big drop -- to around $50 a barrel. The current price is twice that much and expected to rise.

I’m Jeff Tyler for Marketplace.

Follow Jeff Tyler at @JeffMarketplace