01 May 2011
Amid fanfare of a diplomatic victory by Washington for pushing a head new sanctions against Iran at the United Nations Security Council, it is necessary to evaluate these sanctions from a broader regional and international security outlook.
It was quite clear from the beginning that these sanctions would not succeed in stopping Iran's nuclear program. Knowing this, some were considering it merely as an effort to bring back Iran to the negotiating table; while, others aimed to use new sanctions as a prelude to military action against Iran. The third group sees a nuclear Iran as an inevitable outcome of the present process, and the sanctions as part of a larger policy of ' Iran containment', a la Soviet era. In all, what was missed is that the new sanctions especially supplementary sanctions by the US and its allies are bad for the US, for the EU, and also for the region while the US plans to pull back its troops from Iraq and Afghanistan. Furthermore, in the long run Iran sanctions that prevent investment in Iranian oil sector may have adverse effects on the future international oil markets.
The United Nations Security Council voted on June 9, 2010 to impose a fourth round of United Nations sanctions. The UN sanctions include tougher financial controls and an expanded arms embargo, as well as an asset ban on three dozen companies and a travel freeze on individuals.
But as far as Washington was concerned, the UN vote was only the first step in a wider campaign of unilateral penalties against Iran by the US and its allies. Behind the scenes, the US had held a series of meetings with European and other countries, including Australia and Japan, to map out a strategy.
The EU agreed tighter sanctions on Iran in harmony with the US and a day after the US Treasury imposed sanctions on some Iranian banks, companies and Revolutionary Guard Corps members.
The UN resolution makes for the first time a potential link between Iran’s energy sector revenues and energy-related technologies and proliferation. The linkage of energy sector to proliferation issue was the critical point that the US was aiming at for some time. Later, the US Congress in the course of additional sanctions imposed further restrictions on all firms including foreigners in dealing with Iran. As foreseen this area of sanctions can adversely impact the international oil markets.
Apparently, the Obama administration was ready to pay a price to keep Russia and China on board for the adoption of the recent resolution at the UN Security Council. It seems there was a tacit agreement that the US would not impose additional sanctions. This became evident when Russia sharply criticized the additional sanctions that bar from the American market foreign companies that work with Iranian businesses. Russia warned that any additional sanctions affecting Russian companies or individuals would bring a response from Moscow.
In response to additional sanctions by the US, China that is currently Iran’s largest single trading partner, taking the lead from Germany, and depends heavily on Iranian oil imports, stated that it believed that "countries should comprehensively and correctly implement the U.N. sanctions instead of expanding on these sanctions." It is therefore logical to conclude that if the legislation were used to penalize Chinese corporations selling gasoline to Iran, US relations with China could deteriorate rapidly. Similarly, tension between China and the US could escalate if Beijing proceeds with its plans for extensive investment in Iranian oil industry and Washington would attempt to penalize Chinese companies.
Washington's initiation for imposing sanctions on Iran also alienated some of its traditional allies. As signs emerged that Brazil and Turkey might achieve peacefully what threats and sanctions from the US and major powers had not accomplished in Iran, Washington grew nervous and hurried to pass the resolution at the Security Council.
In the US too, the major American companies were worried by the legislation by the Congress that expanded the 1996 law penalizing foreign companies that invest in Iran's oil industry. Although the US is the only major power whose economic interests are not directly impacted by the tighter international sanctions and U.S. firms are already barred from investing in Iran, but it is speculated that their sales worldwide could be hurt by provisions that ban doing business with companies in Europe, Russia or China that trade with Iran. The large business groups in the US, especially in oil sector like Exxon say that tightened sanctions against Iran may cost $25 billion in U.S. exports.
European leaders knowing that Iran's energy infrastructure is already badly in need of investment decided to adopt tough new measures, including bans on the transfer of refining, liquefaction and liquid-natural-gas technology. This was a bad decision by the Europeans with regard to their heavy dependence on Russian energy supplies. The Europeans are looking for some time for alternative sources of energy and indeed it is only Iran that has the sufficient resources to satisfy those needs.
In Europe where they have a historical strong trade ties with Iran, there are concerns that with their new sanction policy against Iran, China might jump in to profit from technology transfers or investment in Iran. The Europeans are worried that they might not ever have the chance to regain their share in the expanding Iranian market.
The sanctions on Iran will have also implications for peace and security of the region surrounding Iran. With three of Iran's neighboring countries; Afghanistan, Pakistan, and Iraq that are engulfed with instability, daily terrorist attacks, and internal strife; the soothing role of Iran for diminishing the tensions and restoration of stability in this crisis ridden region could be hampered by the new sanctions. In the oil and gas field Iran has developed a very constructive relation with Iraq as well with Pakistan. The recent gas pipeline deal with Pakistan will provide the much needed energy for generation of electricity in Pakistan. All those agreements could be seen as a step toward improvement in the living standards in those countries and as a package of necessary measures for establishment of peace and stability. Therefore, any attempt to hinder those efforts within the context of the sanction would be another proof that the sanctions are heading a wrong way. Furthermore, with the volatile situation prevalent in the Persian Gulf region, any provocative step in the name of the implementation of the sanctions could end in conflict. It is worth recalling that the war in the Pacific erupted in 1941 after the US imposed an embargo on fuel supplies to Japan. Finally, the sanctions on Iran's oil sector could prove to be the worst decision in the coming years when the dwindling oil supply in the international markets would point to the fact that it was a wrong decision to ban investment in Iranian rich energy resources for preventing a sky hike in oil prices in the international oil markets.
The various calculations surrounding the latest sanctions underscore the fact that it is a bad policy with potential to develop into a conflict that could go beyond the region. Thus, the Obama administration should abandon the Bush era policy of exploiting the nuclear issue for isolating Iran and instead should seek Iran's help for establishment of peace and security in the region.
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* Nasser Saghafi-Ameri is currently a Senior Fellow at the Center for Strategic Research in Tehran. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
