Obama’s Counterproductive New Iran Sanctions

January 5, 2012

Tensions between the United States and Iran have spiked once again. Last week, responding to planned U.S. sanctions against Iran’s central bank, Tehran threatened to close the Strait of Hormuz, the shipping gateway for one-fifth of the world’s oil. U.S. President Barack Obama, pressed by Congress’ near-universal support for tough new measures to force Iran to abandon its nuclear ambitions, decided to go ahead with the sanctions and signed them into law on Saturday. Fully enforced, they would slash one of Iran’s foremost state revenue streams and virtually excise one of the world’s leading oil exporters from the marketplace.

The chain of events fueled concerns that Washington might be stumbling into a third war in the Middle East. But a more fundamental problem underlies these developments. The Obama administration’s new sanctions signal the demise of the paradigm that had guided U.S. Iran policymaking since the 1979 revolution: the combination of pressure and persuasion. Moreover, the decision to outlaw contact with Iran’s central bank puts the United States’ tactics and its long-standing objective — a negotiated end to Iran’s nuclear ambitions — fundamentally at odds. Indeed, the United States cannot hope to bargain with a country whose economy it is trying to disrupt and destroy. As severe sanctions devastate Iran’s economy, Tehran will surely be encouraged to double down on its quest for the ultimate deterrent. So, the White House’s embrace of open-ended pressure means that it has backed itself into a policy of regime change, something Washington has little ability to influence.

For the moment, at least, the central bank sanctions remain a work in progress. The text of the law provides the executive branch with reasonable flexibility, including a national security waiver. It also appears to condition enforcement on world oil supply considerations and offers foreign governments a six-month amnesty period, during which they may figure out where else to buy crude, or, presumably, develop workarounds to continue buying from Tehran. Obama hedged, too, by appending a signing statement to the bill, asserting his right to disregard any measures that impinge on his authority to set U.S. foreign policy. To be sure, perfect enforcement of this sanctions regime would drive up the price of oil. And election-year concerns about the economy could ultimately trump Obama’s determination to penalize Iran. Still, Congress may have other ideas.

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