Tightening the Noose Around Iran

Washington’s message to Iran is unequivocal. Quite at the end of its tether, the US is all set to implement further sanctions on a defiant Iran.

With the US House of Representatives having approved a new set of sanctions, Iran’s economy is to be hit hard, since these directly affect its energy sector. President Barack Obama, empowered by the overwhelming approval by his legislators, can now go ahead and implement stringent requirements on foreign firms dealing with Iran. What is significant is that the focus is on firms that supply Iran with refined petroleum. These will be banned from doing business with US. Such companies could also be blocked from receiving financial assistance from American institutions. A previous US law had sought to limit foreign business in Iran by imposing a fine of $20 million on companies found to do so.

The move, a calculated one on part of Washington, could also backfire. It may act as a cohesive measure to unite the Iranian people in what will be portrayed as the country’s hour of difficulty. An increasingly strident anti-government movement not withstanding, Iran’s political leadership and even its opposition view its nuclear programme as sacrosanct. The past many years had seen the evolution of the nationalist nuclear doctrine in Iran, which is now a matter of national honour and pride for the Iranian people. The June elections had been instrumental in revealing the fissures within the system and the growing disillusionment for a ruling hierarchy that had failed to address the core issues of unemployment and poverty for the people. In case future sanctions are imposed, especially by the US, it could offset the momentum set in place after the elections. Tehran surely will not miss the opportunity to exploit this and turn it as an affront to the Iranian nation. It is hardly expected to confess to its role in bringing this about.

Iran’s imports almost 40 per cent of its refined petroleum that is supplied mainly from European companies such as Total, Vitol, Trafigura and British Petroleum. With France and Britain actively supporting efforts to stop Iran’s covert nuclear activities, it is very likely that these companies will have to reconsider existing trade relations. The past many months have seen hectic efforts at diplomacy, an unusually generous reconciliation offer from the US, including direct talks and finally an offer to process Iran’s low-enriched uranium abroad. Sadly, Iran chose to stonewall the offer, resorting to typical delay tactics and half-hearted attempts at making partial offers that basically do little to achieve the objective—to ensure it does not use its estimated supply of LEU for military purpose. It led to its erstwhile supporters, China and Russia, that previously blocked US pressure at imposing sanctions, to also change their stand.

With the US energy driven sanctions in place, Iran’s economic mainstay will be hit hard. It is probably the last chance for Tehran to break away from its obdurate stand and grab the opportunity being offered.

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