{"id":17812,"date":"2012-04-13T10:22:02","date_gmt":"2012-04-13T06:22:02","guid":{"rendered":"https:\/\/mideastposts.com\/?p=17812"},"modified":"2012-04-13T14:20:40","modified_gmt":"2012-04-13T10:20:40","slug":"the-u-sisraeli-plan-for-iran-its-doomed","status":"publish","type":"post","link":"https:\/\/mideastposts.com\/showcase\/the-u-sisraeli-plan-for-iran-its-doomed\/","title":{"rendered":"The U.S\/Israeli Plan for Iran: It’s Doomed"},"content":{"rendered":"

\"\"<\/a>
\n<\/a>It\u2019s a policy fierce enough to cause great suffering among Iranians\u00a0 \u2014 and possibly in the long run among Americans, too.\u00a0 It might, in the\u00a0 end, even deeply harm the global economy and yet, history tells us, it\u00a0 will fail on its own.\u00a0 Economic war led by Washington (and encouraged by\u00a0 Israel) will not take down the Iranian government or bring it to the\u00a0 bargaining table on its knees ready to surrender its nuclear program.\u00a0\u00a0 It might, however, lead to actual armed conflict with incalculable\u00a0 consequences.<\/p>\n

The United States is already effectively embroiled in an economic war\u00a0 against Iran.\u00a0 The Obama administration has subjected the Islamic\u00a0 Republic to the most crippling economic sanctions applied to any country\u00a0 since Iraq was reduced to fourth-world status in the 1990s.\u00a0 And worse\u00a0 is on the horizon.\u00a0 A financial blockade is being imposed that seeks to\u00a0 prevent Tehran from selling petroleum, its most valuable commodity, as a\u00a0 way of dissuading the regime from pursuing its nuclear enrichment\u00a0 program.<\/p>\n

Historical memory has never been an American strong point and so few\u00a0 today remember that a global embargo on Iranian petroleum is hardly a\u00a0 new tactic in Western geopolitics; nor do many recall that the last time\u00a0 it was applied with such stringency, in the 1950s, it led to the\u00a0 overthrow of the government with disastrous long-term blowback on the\u00a0 United States.\u00a0 The tactic is just as dangerous today.<\/p>\n

Iran\u2019s supreme theocrat, Ayatollah Ali Khamenei<\/strong><\/a>, has repeatedly condemned the atom bomb and nuclear weapons of all sorts as tools of the devil, weaponry that cannot be used without killing massive numbers of civilian noncombatants.\u00a0 In the most emphatic terms, he has, in fact, pronounced them forbidden according to Islamic law.\u00a0 Based on the latest U.S. intelligence, Secretary of Defense Leon Panetta has affirmed<\/strong><\/a> that Iran has not made a decision to pursue a nuclear warhead.\u00a0 In contrast, hawks in Israel and the United States insist<\/strong><\/a> that Tehran\u2019s civilian nuclear enrichment program is aimed ultimately at making a bomb, that the Iranians are pursuing such a path in a determined fashion, and that they must be stopped now \u2014 by military means if necessary.<\/p>\n

Putting the Squeeze on Iran<\/strong><\/p>\n

At the moment, the Obama administration and the Congress seem intent on making it impossible for Iran to sell its petroleum at all on the world market.\u00a0 As 2011 ended, Congress passed an amendment to the National Defense Authorization Act that mandates<\/strong><\/a> sanctions on firms and countries that deal with Iran\u2019s Central Bank or buy Iranian petroleum (though hardship cases can apply to the Treasury Department for exemptions).<\/p>\n

This escalation from sanctions to something like a full-scale financial blockade holds extreme dangers of spiraling into military confrontation.\u00a0 The Islamic Republic tried to make this point, indicating that it would not allow itself to be strangled without response, by conducting naval exercises<\/strong><\/a> at the mouth of the Persian Gulf this winter.\u00a0 The threat involved was clear enough: about one-fifth of the world\u2019s petroleum flows through<\/strong><\/a> the Gulf, and even a temporary and partial cut-off might prove catastrophic for the world economy.<\/p>\n

In part, President Obama is clearly attempting by his sanctions-cum-blockade policy to dissuade the government of Israeli Prime Minister Binyamin Netanyahu from launching a military strike on Iran\u2019s nuclear facilities.\u00a0 He argues that severe economic measures will be enough to bring Iran to the negotiating table ready to bargain, or even simply give in.<\/p>\n

In part, Obama is attempting to please America\u2019s other Middle East ally, Saudi Arabia<\/strong><\/a>, which also wants Iran\u2019s nuclear program mothballed.\u00a0 In the process, the U.S. Department of the Treasury has even had Iran\u2019s banks kicked off<\/strong><\/a> international exchange networks, making it difficult for that country\u2019s major energy customers like South Korea and India to pay for the Iranian petroleum they import.\u00a0 And don\u2019t forget the administration\u2019s most powerful weapon: most governments and corporations do not want to be cut off from the U.S. economy with a GDP of more than $15 trillion \u2014 still the largest and most dynamic in the world.<\/p>\n

Typically, the European Union, fearing Congressional sanctions, has agreed to cease<\/strong><\/a> taking new contracts on Iranian oil by July 1st, a decision that has placed special burdens on struggling countries in its southern tier like Greece and Italy.\u00a0 With European buyers boycotting, Iran will depend for customers on Asian countries, which jointly purchase some 64% of its petroleum, and those of the global South<\/strong><\/a>.\u00a0 Of these, China and India have declined to join the boycott.\u00a0 South Korea, which buys $14 billion worth of Iranian petroleum a year, accounting for some 10% of its oil imports, has pleaded with Washington for an exemption, as has Japan which got 8.8% of its petroleum imports from Iran last year, more than 300,000 barrels a day \u2014 and more in absolute terms than South Korea. \u00a0Japan, which is planning to cut its Iranian imports by 12% this year, has already won an exemption<\/strong><\/a>.<\/p>\n

Faced with the economic damage a sudden interruption of oil imports from Iran would inflict on East Asian economies, the Obama administration has instead attempted to extract pledges<\/strong><\/a> of future 10%-20% reductions in return for those Treasury Department exemptions.\u00a0 Since it\u2019s easier to make promises than institute a boycott, allies are lining up with pledges. (Even Turkey has gone this route.)<\/p>\n

Such vows are almost certain to prove relatively empty.\u00a0 After all, there are few options for such countries other than continuing to buy Iranian oil unless they can find new sources \u2014 unlikely at present, despite Saudi promises to ramp up production \u2014 or drastically cut back on energy use, ensuring economic contraction and domestic wrath.<\/p>\n

What this means in reality is that the U.S. and Israeli quest to cut off Iran\u2019s exports will probably be a quixotic one.\u00a0 For the plan to work, oil demand would have to remain steady and other exporters would have to replace Iran\u2019s roughly 2.5 million barrels a day on the global market.\u00a0 For instance, Saudi Arabia has increased the amount of petroleum it pumps, and is promising a further rise in output this summer in an attempt to flood the market and allow countries to replace Iranian purchases with Saudi ones.<\/p>\n

But experts doubt<\/strong><\/a> the Saudi ability to do this long term and \u2014 most important of all \u2014 global demand is not steady.\u00a0 It\u2019s crucially on the rise in both China and India.\u00a0 For Washington\u2019s energy blockade to work, Saudi Arabia and other suppliers would have to reliably replace Iran\u2019s oil production and cover increased demand, as well as expected smaller shortfalls caused by crises in places like Syria and South Sudan and by declining production in older fields elsewhere.<\/p>\n

Otherwise a successful boycott of Iranian petroleum will only put drastic upward pressure on oil prices, as Japan has politely but firmly pointed out to the Obama administration.\u00a0 The most likely outcome: America\u2019s closest allies and those eager to do more business with the U.S. will indeed reduce imports from Iran, leaving countries like China, India, and others in Asia, Africa, and Latin America to dip into the pool of Iranian crude (possibly at lower prices<\/strong><\/a> than the Iranians would normally charge).<\/p>\n

Iran\u2019s transaction costs are certainly increasing, its people are beginning to suffer economically, and it may have to reduce its exports somewhat<\/strong><\/a>, but the tensions in the Gulf have also caused the price of petroleum futures to rise in a way that has probably offset the new costs the regime has borne.\u00a0 (Experts also estimate that the Iran crisis has already added 25 cents<\/strong><\/a> to every gallon of gas an American consumer buys at the pump.)<\/p>\n

Like China, India has declined<\/strong><\/a> to bow to pressure from Washington.\u00a0 The government of Prime Minister Manmohan Singh, which depends on India\u2019s substantial Muslim vote, is not eager to be seen as acquiescent to U.S. strong-arm tactics.\u00a0 Moreover, lacking substantial hydrocarbon resources, and given Singh\u2019s ambitious plans for an annual growth rate of 9% \u2014 focused on expanding India\u2019s underdeveloped transportation sector (70% of all petroleum used in the world is dedicated to fuelling vehicles) \u2014 Iran is crucial to the country\u2019s future.<\/p>\n

To sidestep Washington, India has worked out an agreement to pay for half of its allotment of Iranian oil in rupees, a soft currency.\u00a0 Iran would then have to use those rupees on food and goods from India, a windfall for its exporters.\u00a0 Defying the American president yet again, the Indians are even offering a tax break to Indian firms that trade with Iran.\u00a0 That country is, in turn, offering to pay for some Indian goods with gold. \u00a0Since India runs a trade deficit with the U.S., Washington would only hurt itself if it aggressively sanctioned India.<\/p>\n

A History Lesson Ignored<\/strong><\/p>\n

As yet, Iran has shown no signs of yielding to the pressure.\u00a0 For its leaders, future nuclear power stations promise independence and signify national glory, just as they do for France, which gets nearly 80% of its electricity from nuclear reactors.\u00a0 The fear in Tehran is that, without nuclear power, a developing Iran could consume all its petroleum domestically, as has happened in Indonesia, leaving the government with no surplus income with which to maintain its freedom from international pressures.<\/p>\n

Iran is particularly jealous of its independence because in modern history it has so often been dominated by a great power or powers.\u00a0 In 1941, with World War II underway, Russia and Britain, which already controlled<\/strong><\/a> Iranian oil, launched an invasion to ensure that the country remained an asset of the Allies against the Axis.\u00a0 They put the young and inexperienced Mohammed Reza Pahlevi on the throne, and sent his father, Reza Shah, into exile.\u00a0 The Iranian corridor \u2014 what British Prime Minister Winston Churchill called \u201cthe bridge of victory\u201d \u2014 then allowed the allies to effectively channel crucial supplies to the Soviet Union in the war against Nazi Germany.\u00a0 The occupation years were, however, devastating for Iranians who experienced soaring inflation and famine.<\/p>\n

Discontent broke out after the war \u2014 and the Allied occupation \u2014 ended.\u00a0 It was focused on a 1933 agreement Iran had signed with the Anglo-Iranian Oil Company (AIOC) regarding the exploitation of its petroleum.\u00a0 By the early 1950s, the AIOC (which later became British Petroleum and is now BP) was paying more in taxes to the British government than in royalties to Iran for its oil.\u00a0 In 1950, when it became known that the American ARAMCO oil consortium had offered the king of Saudi Arabia a 50-50 split of oil profits, the Iranians demanded the same terms.<\/p>\n

The AIOC was initially adamant that it would not renegotiate the agreement.\u00a0 By the time it softened its position somewhat and began being less supercilious, Iran\u2019s parliamentarians were so angry that they did not want anything more to do with the British firm or the government that supported it.<\/p>\n

On March 15, 1951, a democratically elected Iranian parliament summarily nationalized the country\u2019s oil fields and kicked the AIOC out of the country.\u00a0 Facing a wave of public anger, Mohammed Reza Shah acquiesced, appointing Mohammed Mosaddegh, an oil-nationalization hawk, as prime minister. A conservative nationalist from an old aristocratic family, Mosaddegh soon visited the United States seeking aid, but because his nationalist coalition included the Tudeh Party (the Communist Party of Iran), he was increasingly smeared in the U.S. press as a Soviet sympathizer.<\/p>\n

Continue reading at Tomdispatch.com<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

JUAN COLE: It’s well worth looking at previous situations where major powers tried to use economics to bring Iran to heel. <\/p>\n","protected":false},"author":70,"featured_media":17827,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56,692,82,149,60,482],"tags":[2009,4008,423,10345,1209,2024,1947,2609,18343,2453,2228,1104,18278,18333,2237,2019,1314,434,18306,3553,4574,9123,18321,18311,1277,1106,2464,6540,7056,191,121,2317,406,1756,10964,3589,5173,11610,217,1808,2204,18344,18275,5981,1105,5218,3309,18330,2744,18325,6930,18337,18302,2020,4815],"_links":{"self":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/17812"}],"collection":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/users\/70"}],"replies":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/comments?post=17812"}],"version-history":[{"count":0,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/posts\/17812\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/media\/17827"}],"wp:attachment":[{"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/media?parent=17812"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/categories?post=17812"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mideastposts.com\/wp-json\/wp\/v2\/tags?post=17812"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}