War
of words aimed to avoid Iran
conflict By Barbara Slavin
WASHINGTON - The recent escalation in
Iranian threats to blockade oil shipments and
attack United States Navy vessels are meant to
push up the price of oil and divert domestic
opinion from an economic crisis, but are not
likely to lead to a war in the Persian Gulf, in
the view of Iran experts.
Should Iran
retaliate for impending new sanctions against its
oil exports, it is more apt to target oil
production in its neighbor, Iraq, than foreign
tankers in the Gulf.
"We've seen this
movie before," Cliff Kupchan, an Iran analyst at
the Eurasia Group, told Inter Press Service (IPS)
on Wednesday, referring to Iran's defiant rhetoric
and the firm US response. "Neither side wants a
war. A lot of this rhetoric is overstated."
While there is always a chance for
miscalculation in the crowded
waters of the Gulf, a clash
of words is more useful to Tehran than actual
hostilities.
On Tuesday, after Iranian
armed forces commander General Ataollah Salehi
warned that a US aircraft carrier that left the
Gulf last week should not return, the price of oil
jumped 4%.
The United States has also
benefited from the tensions, recently concluding
deals to sell Saudi Arabia $30 billion in advanced
weaponry and $3.5 billion in arms to the United
Arab Emirates.
Despite threats last week
to close the Strait of Hormuz, the choke point
between Iran and Oman for much of the world's
tanker-borne oil, Iran is not in a position to
keep the waterway closed.
During the
1980-88 Iran-Iraq war, Iran used mines and small
boats to attack 190 ships from 31 nations, killing
at least 63 sailors, according to David Crist, who
wrote a history of naval encounters in the Gulf
for The Washington Institute for Near East Policy
in 2009.
However, the US and allied navies
kept the Gulf open for tanker traffic and Iran
suffered significant losses, including three
warships, two oil platforms and a number of boats.
The US is now much better equipped to deal
with the threat from Iranian mines, Crist wrote,
with four counter-mine ships based in Bahrain and
superior surveillance.
While Iran now has
more advanced anti-ship missiles and three Russian
submarines, Kupchan dismissed Iranian naval power
in the Gulf as "puny".
Should Iran provoke
a clash, Iran hawks in the US have suggested that
the US military take the opportunity not just to
hit Iranian naval assets, but to go after its
nuclear installations as well. While the Barack
Obama administration has given no indication that
it would do so, Kupchan said Iran would be
unlikely to jeopardize its "crown jewels".
Iran would presumably seek to continue its
own oil exports through the Gulf and target the
ships of Arab countries such as Saudi Arabia and
Kuwait. However, that would undermine Iran's
relations with China, a major importer of oil from
Saudi Arabia as well as Iran.
China is
also Iran's number one trading partner and has
provided Iran with key political support,
threatening to use its veto power to prevent new
sanctions against Iran by the United Nations
Security Council.
While the US has
repeatedly affirmed that it will keep the Gulf
open to shipping, the Obama administration is not
eager for a new conflict in the Middle East at a
time when it is trying to cut the defense budget
and the president is running for re-election.
However, the administration has not sought
to take advantage of the growing squeeze on Iran
to advance a diplomatic solution of the dispute
over Iran's nuclear program.
Iranian press
reports say that Tehran is seeking a new round of
nuclear negotiations with the US and the other
permanent members of the UN Security Council plus
Germany this month. However, State Department
spokeswoman Victoria Nuland said on Tuesday that
Iran had yet to put the request in writing.
United States officials have barely
mentioned diplomacy as an option with Iran in
recent months following a brief attempt at
engagement in Obama's first year. Instead the
focus is almost entirely on sanctions.
Nuland told reporters on Tuesday that the
Obama administration sees new "threats from Tehran
as just increasing evidence that the international
pressure is beginning to bite there, and that they
are feeling increasingly isolated and they are
trying to divert the attention of their own public
from the difficulties inside Iran, including the
economic difficulties as a result of the
sanctions".
The Iranian warnings have
coincided with a precipitous drop in the Iranian
currency, the rial. Worth 10,000 to the dollar a
year ago, the rial is now hovering between 16,000
and 18,000.
Djavad Salehi-Isfahani, an
expert on the Iranian economy at Virginia Tech,
told IPS that the biggest victim of the drop was
the Iranian middle class. He said that at one
point on Monday, "there were no dollars to be
bought" from currency traders in Tehran.
While the Iranian government still has
substantial reserves in gold and hard currency,
Salehi said there is a severe shortage of paper
dollars in the country exacerbated by the growing
difficulty of carrying out foreign banking
transactions. Small factory owners desperate to
keep their enterprises running and dependent on
imports of intermediate goods are bidding up the
price of the dollar in a panicky fashion, he said.
Others impacted by the currency drop
include the parents of students studying abroad.
"There are half a million kids abroad," he said.
"They need dollars to pay tuition and rent."
The crisis comes at a politically
sensitive time for the Iranian regime.
Parliamentary elections are scheduled for March 2
and the government fears that a low turnout will
further undermine its legitimacy, already
blackened in the wake of disputed 2009
presidential elections and a harsh crackdown on
dissent.
The rial plunge appeared to be in
part a reaction to an anticipated European embargo
on Iranian oil. European Union members decided in
principle on Wednesday to halt imports that have
averaged about 450,000 barrels a day.
The
Europeans, who are expected to finalize the
decision by the end of this month, are responding
to a new US law, signed by Obama on New Year's
Eve, that forbids foreign banks that deal with
Iran's central bank from transactions with US
banks.
The law, which was attached to a
defense authorization bill, provides several
months for the sanctions to go into effect and
allows Obama to waive the penalties if they will
result in major disruptions in the world oil
market.
Kupchan suggested that Iran might
retaliate by sabotaging Iraqi oil production,
taking advantage of chaos in that country since a
US military withdrawal and seeking to trigger the
market disruption outlined in the new US sanctions
bill.
"If you want to undermine the
legislation, the easiest oil to take off line is
Iraq," he said.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
