US President Barack Obama signed a law Saturday imposing tough new sanctions on Iran for its nuclear research programme. FRANCE 24 spoke with Dr. Christian Emery, an Iran expert at the London School of Economics, about the ramifications of the move.
France24.com: The latest US sanctions seem to be causing a particular stir. What is different about these sanctions compared to prior ones?
Christian Emery: The new sanctions aim to effectively close down payment lines between Iran and its oil customers for the first time. Foreign firms doing business with Iran's central bank, through which the majority of oil transactions pass, could be punished by being excluded from the US market.
In effect, this amounts to an embargo of Iranian oil, which has long been considered the only truly “crippling” sanctions that can be applied against Iran. An embargo is technically an act of war, and this is certainly how Iran has characterised them.
Their response of threatening to close the Strait of Hormuz is another factor making these sanctions different. Such an act would inevitably lead to an armed confrontation between the US and Iran. Finally, the wider context to these sanctions is the fact that Iran and the US/Israel are already effectively engaged in a low intensity war.
F24: What will be the impact of these sanctions on Iran’s economy, its oil customers and the global oil market?
CE: There will always be customers for Iranian oil, and some firms will simply judge that excluding themselves from the US oil market is an acceptable price. The US will also be reluctant to act against key powers such as China, Russia and India.
There is also not an explicit oil boycott, which the EU will consider, and in my opinion reject at this point, given the increasing purchases of Iranian oil by cash-strapped Greece and Italy. Iran will still be able to barter goods and services for oil - as they do regularly with China. However, we may well be moving toward a situation in the future where Iran's customers are located almost exclusively in Asia.
The impact of these sanctions on the price of oil is noticeable but not yet huge. What will drive oil prices through the roof is the escalation of military rhetoric. Iran knows this, and of course benefits from a price hike, and this probably explains why it has talked up a retaliatory blockade.
Most analysts believe this is a bluff and Iran will not commit economic, political and military suicide. The US will try and mitigate a rise in Iranian oil prices by persuading key allies such as Saudi Arabia and Kuwait to increase production.
F24: What about the diplomatic impact?
CE: One diplomatic risk is that the EU becomes so alarmed by Iran's provocative response to the US sanctions that it thinks twice about an embargo. There would of course be enormous diplomatic risks for Iran if it did blockade the Strait - not least because Iraq, increasingly a close ally, would not be able to export its oil either. Nor would Qatar.
The major diplomatic risk is that there seems to be very little political will in the US or Iran to de-escalate tensions. America seems to be sleepwalking into a major military confrontation with Iran for reasons that are best explained by domestic politics and do not reflect anything like the nature of the threat Iran poses to US interests.
F24: What is the larger aim of the sanctions? Are they likely to be effective in slowing Iranian nuclear advances?
CE: Ostensibly, they are intended to be a decisive coercive lever on the nuclear issue and change the cost-benefit calculus for decision makers in Tehran. There is little evidence that this will be effective. Sanctions are, however, always used to pursue multiple objectives, domestic and foreign.
In Obama's case, this legislation comes from Congress and Obama lacks the political will to challenge core assumptions about the Iranian threat which no longer bare any resemblance to reality.
Obama does not, however, want an armed confrontation with Iran and probably believes that going hard on the sanctions will placate Congress and Israel. The danger to this lies in his ability to manage the fallout from Iran's reaction to the sanctions.
Conversely, the hawks in Congress are probably hoping to limit the president's ability to control Iran policy. This was seen recently in their attempt to pass legislation that effectively made it illegal for any US diplomats to talk to Iranian officials without advance approval from Congress.
Date created : 2012-01-02