Reports that members of the European Union (EU) were planning to impose an embargo on Iranian oil as part of a U.S.-led strategy to force Teheran to end its alleged nuclear military programme should not have come as a major surprise. Iran has been developing surface-to-surface missiles with a maximum range of 2,000km, that equipped with nuclear weapons could put France and its European partners -- as well as Israel and U.S. bases in the Middle East -- within its range.
Or to put it differently, if Iran with nukes is indeed a strategic threat, it is the Europeans more than the Americans who should be worried about it.
Some Europeans were hoping to pursue once again their all-too-familiar approach of free riding on U.S. military power -- counting on the United States and/or Israel to attack Iranian nuclear facilities (Win I for Europe) while allowing European nations that depend heavily on Iranian oil to continue doing business with the Islamic Republic (Win II for Europe). They could have then distanced themselves from the American and/or Israeli action while facing no disruption in the flow of Iranian oil into their economies (Win III for Europe).
But as the Obama administration has already demonstrated in Libya, with the U.S. military overstretched (hence, the plans to shrink it) and the American fiscal house in a mess (while the Europeans continue to maintain their expensive welfare programmes), the Americans were not going to allow the Europeans to do more free riding on their military power in the Middle East -- which is (and that includes Iran) in Europe's strategic backyard.
Hence, the Obama administration has made it clear that it would not launch a unilateral military strike against Iran and would instead pursue a 'graduated' strategy of slowly escalating economic and military pressure on Iran. But that would require a unified Western front for it to succeed, since any proposed sanctions would not bite Iran without EU participation.
The expected EU decision to ban Iranian oil imports comes after President Barack Obama signed into law last month a measure (included in the Defense Bill) targeting Iran's central bank and financial sector following similar steps against Iran's financial institutions that the British had taken last November (in retaliation for demonstrators' storming of the British embassy in Teheran).
The new measures signed by Mr. Obama in December would punish foreign firms that continue dealing with Iran's central bank to facilitate oil transactions by imposing restrictions on their access to the American economy and its financial sector.
But it would take some time for the U.S.-EU moves to go into effect. The southern European countries that are heavily dependent on Iranian oil import (and are also in the midst of a devastating financial crisis) will probably resist the planned EU ban.
Moreover, Turkey and Japan have already requested waivers from the U.S. financial sanctions against Iran (and Mr. Obama has the authority to grant them), while China and Russia, two leading trade partners of Iran, could circumvent the sanctions, by shifting to barter deals with Teheran.
Feeling the heat
It is obvious that the Iranian economy has taken a hit in the form of rising food prices and a dramatic drop in the value of the Iranian currency as a result of the sanctions imposed on it by the U.S. and the United Nations in recent years. So the new sanctions that would target Iranian oil exports on which its economy is dependent could have the effect of forcing it to the brink of bankruptcy.
But it is not clear that these Western steps are going to bring about the desired changes in Iranian policy. If anything, against the backdrop of the Iranian parliamentary elections in March and a growing split inside the leadership -- pitting President Mahmoud Ahmadinejad and his political allies against even more conservative clerical groups -- policymakers in Teheran are under pressure to project diplomatic and military toughness vis-Ã-vis Washington and its partners. That explains Teheran's threats to stop the flow of oil through the Strait of Hormuz if sanctions were imposed on its oil exports. It also threatens to stop U.S. warships crossing this strategically important strait.
The West has cheered the emergence of the anti-clerical and more liberal Green Movement in Iran. But Iran's clerics and its notorious Revolutionary Guards could exploit the confrontation with the U.S. to mobilise public support by stirring up nationalist sentiments.
The set of financial sanctions imposed on Iran by the U.S. in September 2006, and that were integrated into a UN Security Council resolution in March 2008, have targeted Iran's elites and highlighted the growing isolation of the country. It also allowed the Obama administration to demonstrate that its non-military strategy on Iran was working while insisting the military option world 'remain on the table.'
White House officials argue that a war with Iran would not be cost-effective in terms of securing long-term U.S. interests. A military strike against Iran's nuclear facilities could perhaps slow down Iran's drive to build nuclear weapons by a year or so. But it could also ignite an all-out Middle Eastern war involving Israel and the Hizbollah (Iran's allies in Lebanon) and lead to a major rise in world energy prices that could bring the U.S. economic recovery to a halt.
At the same time, the Obama administration is facing enormous pressure from the Israeli government that has threatened to use military force against Iran if intelligence reports indicate that the Iranians are close to manufacturing a nuclear bomb. Interestingly enough, leading Israeli national security figures have echoed the American view by arguing that a war with Iran would result in many casualties while failing to end its nuclear programme.
Playing into the hands of Israeli and American supporters of the military option was a report issued earlier in the year, the Vienna-based International Atomic Energy Agency that expressed its concerns that Iran may be on the threshold of making a nuclear warhead small enough to be put on top of a ballistic missile.
Republican lawmakers and the leading presidential candidates of the party -- and their neo-conservative allies in the media and the think tanks -- have accused the Obama administration of failing to force the Iranians to end their nuclear programme and have urged that Washington take immediate military action -- or at least give Israel a green light to do the job.
These let's-bomb-Iran crowd consists of the same politicians and pundits that not so long ago were warning that Saddam Hussein's Iraq had weapons of mass destruction and that the world-as-we-know-it would come to an end unless the U.S. invaded Iraq.
Recent reports suggest that the Israelis have agreed to refrain from taking military action against Iran while the Obama administration continues to use diplomatic means and widen the anti-Iran international coalition to pressure the clerics in Teheran to change course. American and Israeli officials have apparently drawn a set of 'red lines' that would determine if and when a use of a military option against Iran becomes acceptable to both sides.
Mr. Obama and his diplomatic and national security aides are confident that they have a relatively long window of opportunity -- at least until after this year's presidential and congressional elections -- in pursuing their diplomatic option. They believe that the collapse of the Assad regime in Damascus is imminent and this has deprived Iran of a central regional partner, making it much more difficult for the Iranians to provide support for Hizbollah if war breaks out with Israel. At the same time, the withdrawal of U.S. military from Iraq makes it unlikely that American troops there would be threatened by Iranian retaliation in case of a war with Iran.
These developments coupled with the more assertive anti-Iran position of Saudi Arabia and its Gulf allies (that pledged to increase oil exports to the West and China if tighter sanctions on Iran's oil exports go into effect) may have weakened the diplomatic bargaining power of Iran and putting may be more pressure on Teheran to reach a compromise of sorts with the U.S. and its European allies.
Turkey, which notwithstanding some of the recent tensions with Washington and Paris -- not to mention Israel -- remains a Nato member and a key U.S. ally, is emerging as a leading Middle Eastern power that is counter-balancing Iran and certainly does not want to see Teheran with nuclear arms.
But it also wants to avert a military confrontation between the U.S. and Iran and could play a major role in trying to facilitate a diplomatic deal under which Iran could agree to put its nuclear programme on hold in exchange for enhanced diplomatic and economic ties with the West.
Moreover, notwithstanding the heated rhetoric coming out of Teheran, its leaders are worried about its growing diplomatic and economic isolation and the disastrous impact that a war with the U.S. could have on the ability of the regime to continue maintaining its power in the long-run.
Similarly, there is very little support for a war with Iran in the Obama administration, which recognises that such a course could draw the U.S. into a new costly military quagmire in the Middle East. And considering that both on Iraq (over the issue of maintaining U.S. military presence there) and on Afghanistan (over the issue of changing the timeline for withdrawing troops) Mr. Obama has been able to resist the pressure from the political right, it is not inconceivable that he could continue pursuing his graduated approach on Iran and counter the calls to go to war.
But things can go wrong. As Britain's prime minister during World War I, David Lloyd George, explained in his memoirs: 'Nobody wanted war' in 1914. 'The nations slithered over the brink into the boiling cauldron of war without any trace of apprehension or dismay,' he recalled.
Indeed, the danger is in a regional and global strategic environment under which the balance of power remains very shaky. U.S. power is being challenged. The Iranian leadership feels that it is being pushed into a corner. The Israelis are feeling isolated as the Middle Eastern political system continues to go through dramatic changes.
Unexpected provocations and miscalculations could lead the kind of war that once again nobody wants.
The article was originally published in the Business Times of Singapore on January 9, 2012