Tensions Rising in & around Iran

President Trump’s decision to pull out from the Iranian nuclear deal has significantly increased tensions in and around Iran. The return of “regime change” policy will have profound implications on Iran and the Middle East. The Iranian economy is in steep decline with the sharp devaluation of the Iranian Rial and large-scale protest rallies in different regions. The rising prices of consumer products, shortages of water and problems related with mismanagement are fuelling the protests. The decision of some European companies to cease their activities in Iran, such as Total and Maersk, exacerbate the situation. Meanwhile, the US strategy against Iran has multiple layers, and economy is only one of them.

Washington is actively taking steps to foment an anti-Iranian regional alliance, putting together Israel and Sunni Arab powers led by Saudi Arabia. The Tel Aviv-Riyadh cooperation is altering the decade-long security architecture of the Middle East with long-term impact on the Palestinian issue and legitimization of Israel within the Arab world. Syria is one of the battlefields in the American struggle against Iran. The US is effectively exploiting Israel concerns over a growing military presence of Iran and Tehran backed paramilitary forces in Syria, especially along the Syria-Israel border. Israeli military strikes against Iranian targets in Syria are part of the US strategy to put pressure on Iran. Both Israel and the US are demanding that Iran pull its military out of Syria. However, Iran is not likely to accept such demands as it will mean squandering the Iranian achievements in Syria. The most likely scenario is redeployment of Iranian and Hezbollah forces from the Syria-Israel border and Israel’s tacit acceptance of an Iranian military presence in other parts of Syria.

Meanwhile, other signatories of the Iran nuclear deal are not in line with Washington. The UK, Germany, France, and EU as an institution, are struggling to keep the deal alive. Europeans are interested in investing in the Iranian economy and view the vast Iran oil and gas resources as a source to increase EU energy security. The biggest irritation for the EU, however, are the US threats to use extraterritorial or secondary sanctions against European companies involved in Iran. Given the growing US – EU tensions on trade, with bilateral imposition of additional tariffs, as well as US demands to Europe to pay more for the American Defense Umbrella, the EU is increasingly concerned over the US Administration’s new assertive policy. Iran will demand from European countries a guarantee of continued economic benefits as a condition to stay in the deal. Meanwhile, Tehran clearly understands that in the case of uranium enrichment resumption, it may face a tough reaction from the EU which will pull the EU closer to the US.

Russia is effectively balancing between Iran, Israel, Saudi Arabia and Qatar in the Middle East. President Putin has successfully transformed Russia into a regional power broker, keeping channels open with all actors. Simultaneously, the US decision has increased Russian importance for Iran. Tehran views Russia as a source for military products and advanced technologies. The “North-South” international transport corridor, which will connect India with Northern Europe via Iran, Azerbaijan and Russia, is another key project for Russia and Iran. Meanwhile, the current situation raises Russian capacities to use Iran as a bargaining chip in its relations with the US in the upcoming Putin-Trump Helsinki summit.

China views Iran as a key source for oil and gas imports. China is the number one buyer of Iranian oil, consuming 24% of Iranian oil exports in 2017. Iran plays a significant role in the Chinese flagship “Belt and Road” initiative as a gateway to Europe, given the China-Iran sea transit and China – Kazakhstan – Turkmenistan – Iran railroad. Beijing is concerned about the US policy of secondary and extraterritorial sanctions, perceiving them as a clear violation of international trade rules. Given the uneasy US-China bilateral trade negotiations, Beijing perceives the US actions as another sign of growing American assertiveness. Meanwhile, the significant role of the Chinese in the North Korea nuclear issue negotiations gives Beijing additional leverage in its talks with the US to ease American secondary sanctions on Chinese companies involved in Iran.

Thus, Iran and the other five signatories of the Iran nuclear deal are interested in keeping the deal afloat. On July 2, President Rouhani started his European tour, visiting Switzerland and Austria which just assumed the six month Presidency of the Council of the European Union. On July 6, the Iranian Minister of Foreign Affairs will meet with his counterparts from Russia, China, UK, Germany and France. Most likely, all sides will continue to explore ways to keep the nuclear deal and provide Iran with some economic benefits. However, given the tough US stance, it will be more and more difficult to keep foreign and especially European companies in Iran. The Iranian economy will continue its sharp decline which in its turn will stoke domestic protests. Thus, in the coming months the international community and regional actors will be carefully watching developments in the Iranian domestic policy and adjusting their policy accordingly.

Dr. Benyamin Poghosyan is executive director of Political Science Association of Armenia. @benyamin_poghos

By Benyamin Poghosyan

Image: Trump and the Iran Nuclear Deal. Source: nbcnews.com

05 July 2018 18:20