Iran, a re­gional power in dire straits

Is the gov­ern­ment in Tehran start­ing to get des­per­ate?

Financial Mirror (Cyprus) - - WORLD - By Xan­der Sny­der

In Iran, every time one prob­lem seems to go away, an­other one takes its place. Re­cent protests are a case in point. Just as the demon­stra­tions over eco­nomic griev­ances in Tehran had died down, new ones be­gan in Khuzes­tan. Peo­ple through­out the re­gion have taken to the streets to de­cry how the gov­ern­ment is mis­han­dling the on­go­ing wa­ter short­age.

Protesters claim Iran con­tin­ues to sell potable wa­ter to Iraq and Kuwait, even as 230 Ira­ni­ans were al­legedly poi­soned by con­tam­i­nated drink­ing wa­ter. Un­rest re­lated to wa­ter is­sues has been sim­mer­ing in Khuzes­tan since March, but of­fi­cials just can’t seem to get a han­dle on it. So­cial me­dia posts from Wed­nes­day sug­gest Iran has de­ployed more forces to the cities of Khor­ramshahr and Abadan to quell the un­rest.

Mean­while, Pres­i­dent Hasan Rouhani was in Europe des­per­ately try­ing to sal­vage the Iran nu­clear deal by en­cour­ag­ing France, Ger­many and the United King­dom to abide by their prior trade and in­vest­ment com­mit­ments, say­ing that “if the re­main­ing sig­na­to­ries can guar­an­tee Iran’s ben­e­fits, Iran will re­main in the nu­clear deal with­out the U.S.” Given the threats the U.S. has made against any coun­try that con­tin­ues to work with Tehran, and the will­ing­ness shown by the Trump ad­min­is­tra­tion to im­pose eco­nomic hard­ship even on its al­lies, it’s highly un­likely that Europe is will­ing to run afoul of the U.S., es­pe­cially when Wash­ing­ton is al­ready start­ing a trade war with Europe. Put sim­ply, the U.S. can hurt Europe more than Iran can help Europe, so Rouhani’s calls for help will prob­a­bly go un­heeded.

With the U.S. try­ing to force every cus­tomer to stop buy­ing Ira­nian oil, the gov­ern­ment in Tehran will have a hard time mak­ing up lost rev­enue. Los­ing oil rev­enue is bad enough, but it comes at an es­pe­cially bad time for Iran – the gov­ern­ment bud­get is al­ready stretched thin in sup­port of mil­i­tary op­er­a­tions in Iraq, Syria and Ye­men, and the Ira­nian pub­lic claims that gov­ern­ment spend­ing on so­cial pro­grammes is al­ready in­ad­e­quate. Elim­i­nat­ing the de­mand for Ira­nian oil, more­over, would has­ten the de­cline of the Ira­nian rial, which has been plung­ing in re­cent months and was the prox­i­mate cause of the most re­cent bout of protests in Tehran.

Rouhani is no doubt aware of the fu­til­ity of his mis­sion to Europe, so he has raised the stakes. On July 2, dur­ing his strip to Switzer­land, an­gry that other coun­tries would be able to ship oil from the re­gion but Iran would not, Rouhani threat­ened to shut down the Strait of Hor­muz, through which as much as 30% of all daily seaborne hy­dro­car­bons pass.

Shortly there­after, Qassem Soleimani, the head of the Quds Force, the ex­pe­di­tionary arm of the Is­lamic Rev­o­lu­tion­ary Guard Corps, stood be­hind Rouhani’s state­ment, sig­nal­ing that the mil­i­tary was ready to close the strait in de­fense of Iran’s na­tional in­ter­est. The fail­ure of the Iran nu­clear deal ag­gra­vated the di­vi­sions be­tween Iran’s re­formist camp, of which Rouhani is a mem­ber, and the hard-line camp, of which Soleimani is a mem­ber. It’s pos­si­ble that the can­cel­la­tion of oil im­ports will be the is­sue that unites them. (It’s also pos­si­ble that the re­form­ers, hav­ing staked so much of their cred­i­bil­ity on the nu­clear deal, have lost face and are now sub­or­di­nated to the se­cu­rity es­tab­lish­ment.)

Un­sur­pris­ingly, the U.S. didn’t ap­pre­ci­ate Rouhani’s threat. Clos­ing the strait would send oil prices sky­rock­et­ing and hurt the econ­omy of Saudi Ara­bia, Wash­ing­ton’s stal­wart ally in the re­gion. Wash­ing­ton re­sponded by vow­ing to keep the Per­sian Gulf open – a re­sponse that nec­es­sar­ily re­quires the di­rect use of force, which would ob­vi­ously mark a change in how the U.S. deals with Iran. Iran’s navy could never beat the U.S. Navy in open com­bat, but it’s hard to imag­ine the U.S. pub­lic has much of an ap­petite for an­other mil­i­tary con­flict in the Mid­dle East. Iran isn’t es­pe­cially in­ter­ested in a con­flict ei­ther, but the gov­ern­ment is get­ting des­per­ate. With less to lose, Iran will be will­ing to take big­ger risks.

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