With so much alarming going on in the Middle East, it’s hard to keep track of everything that seems to be going wrong. No sooner had the Libyan civil war ended than another erupted in Syria. Iraq appears determined to follow, and perhaps overtake their Syrian neighbors. Egypt remains locked in a multi-sided struggle among the military, the Islamists and the secular liberals. And disturbing reports of low-level, but growing unrest in Saudi Arabia have begun to emerge.
Amid all of this, the one place that the United States has resolutely marched forward—or perhaps been dragged by the Congress and our European allies—has been in applying ever greater pressure on Iran. But if the Obama administration’s forward progress is clear enough when it comes to its Iran policy, its ultimate destination is not. The sanctions against Iran may well succeed on their own terms while producing regrettable, if unintended, consequences.
The latest salvo against Iran came a few short weeks ago, when President Obama signed into law the new Defense Appropriations bill, in which Congressional conservatives had tucked new, draconian sanctions prohibiting transactions with Central Bank of Iran (CBI), or anyone else doing business with the CBI. The importance of these sanctions is that prohibiting transactions with Iran’s Central Bank would preclude long-term oil sales contracts. If no country were willing to deal with the CBI, Iran would be forced to sell its oil either only to countries and companies willing to buck such U.S. sanctions, or rely on spot market sales for cash—an extremely inefficient method that would cut heavily into Iranian oil revenues. Some analysts, in fact, estimate that this could lead to a reduction of Iranian oil revenues by as much as one-third—and since Iran is heavily dependent on oil revenues, this could have a major impact on the Iranian economy.
Now that would seem to be a good thing, right? Maybe, but maybe not. Certainly the Iranian regime has shown absolutely no inclination to halt (let alone give up) its nuclear program in the face of previous sanctions, which are already having a serious impact on the Iranian economy. The hope is that going after Iranian oil revenues in this fashion would apply so much pressure on Iran’s economy, causing rampant inflation and even economic collapse, that the regime will have no choice but to compromise and accept international demands related to its nuclear program.
The problem is that these sanctions are potentially so damaging that they could backfire, creating at least three sets of consequences that would leave the United States in a worse position, whatever the impact on Iran.
[The resignation of assistant secretary of state for European and Eurasian affairs Wess Mitchell] is surprising news, which seems to have caught everyone off guard. He doesn’t appear to have shared this news with his ambassadors, who were in Washington last week for a global chiefs of mission conference. His deputy is also slated to retire soon, which raises question of near term leadership on European policy at a time of challenges there.
[Wess] Mitchell was a strong supporter of NATO, particularly in Eastern Europe where he will be sorely missed. His departure comes follows the resignation of senior Pentagon officials – Robert Karem and Tom Goffus – working on NATO along with Secretary Mattis. Without this pro-alliance caucus, NATO is now more vulnerable than at any time since the beginning of the Trump administration.