The means of changing Iran

Following my article on August 16, 2018, I need to add to the article “Persian Gulf Sanction Busters” by talking about those who are legitimately exempted from the sanctions. I refer to the sanctions imposed by the USA on Iran and the decisions taken by the former on who must and who is exempted.

In my opinion there are always exceptions to the rule especially in international affairs because interests dominate. So, in my previous article I talked about those breaking the sanctions and in this I will talk about those permitted to break them. In both cases its because of interests.

The facts are that President Trump is adamant that the 2015 nuclear deal with Iran is dead and hence sanctions have been re-imposed against Iran’s oil exports, shipping and banking. The bans had been lifted under the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).

Yet, there are already exemptions from the sanctions. On Tuesday November 6, the hawkish US Secretary of State Mike Pompeo who is a staunch Trump supporter and anti the Iran deal signed off on the sanction’s exemption for Iran’s southeastern port city of Chabahar, citing Afghanistan’s economy.

Reading from the script prepared for him Pompeo cited the Iran Freedom and Counter-Proliferation Act of 2012 (IFCA) that precedes the JCPOA (2015) deal with respect to the development of Chabahar Port and the construction of an associated railway and for the shipment of non-sanctionable goods through the port for Afghanistan’s use, as well as Afghanistan’s continued imports of Iranian petroleum products.

This shows that the conflict of interests is deep. On the one hand Trump wants to execute a policy of maximum pressure to change the Iranian regime’s destabilizing policies in the region and beyond. On the other hand, even allies such as India have been lobbying for the importance of Chabahar. India hopes to utilize Iran’s transit potentials to embolden its connectivity footprints, with Chabahar being the stepping stone to those ambitions. So, at stake is American strategy for all South Asia.

On Wednesday November 7, the next exemption was announced by the US State Department because it is in its interests to do so. Iraq will continue importing electricity and natural gas from Iran under an exemption from US sanctions. Iran is currently Iraq’s top trade partner, with annual turnover standing at about $12 billion and depends on Iranian natural gas imports for electricity generation. Basra in southern Iraq was hit by violent protests which spread to other cities this summer, partly because of a halt of Iranian electricity exports.

In my opinion Iraqi Prime Minister Adel Abdul Mahdi explained this in the most succinct statement yet of what international politics are all about, “[my] country will consider both its own interests and the interests of others, and if the United States makes a decision, it must implement it through its own means and not by other countries.” So according to him his country’s position regarding the US sanctions was like those by the European Union, Russia, China and Japan. That is to say, “Iraq will not be part of the sanctions regime, as it will not be part of aggression against any country.”

Attempting to convince the world that it would not be in their best interest to follow the US sanctions Iran’s Minister of Petroleum Bijan Zangeneh elaborated that the US sanctions will harm the most those states importing Iranian oil and in them oil consumers are set for “painful months” ahead because of insufficient supplies that means a lack of balance between supply and demand.

However, the US has considered this. The Trump administration “artificially” brought down oil and gasoline prices ahead of midterm elections by coordinating an increased draw in US crude inventory. Oil on Wednesday was trading close to its lowest since August at around $72 a barrel. The US has kept pressure on Saudi Arabia and other producers to maintain ramped-up output. So far, the US, Russia and Saudi Arabia are claimed to have replaced the lost Iranian barrels that is predicted to be 900,000 barrels over the next year.

But that’s not all because American interests are global. China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea are another eight countries that have been exempted from the US sanctions. For example, Indian Oil Corp and Mangalore Refinery and Petrochemicals Ltd have placed an order with Iran to buy a total of 9 million barrels of oil. And South Korea is conducting won-based trade transactions via the Central Bank of Iran’s accounts at Woori Bank and the Industrial Bank of Korea (IBK)

Where does that leave the re-imposed sanctions? Ten countries have been exempted and as noted in my article on August 16, 2018 “Persian Gulf Sanction Busters” there is robust financial and economic ties between Persian Gulf States and their Iranian nemesis. They are neighboring states and their residents conduct trade daily. These will not be severed with the imposition of American sanctions even if Iran is their main threat. And of course, the European Union, Russia, China and Japan have said that they intend to keep to the JCPOA (2015) deal.

The bottom line, leaves me in no doubt, that it would be in the interests of Trump and Israel to consider means other than sanctions to exert maximum pressure to change the Iranian regime’s destabilizing policies in the region and beyond.

About the Author
Dr Glen Segell is Fellow at the Ezri Center for Iran & Persian Gulf Studies, University of Haifa.
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