U.S. and Iranian Strategic Competition: The Sanctions game: Energy, Arms Control, and Regime Change

Tightening sanctions and Iran’s reactions have become a race against time. Every day brings a new event as the competition between the US and Iran plays out on a global level. The Burke Chair at CSIS is issuing a new report that puts this competition in a broader perspective, as part of its on-going series on US and Iranian strategic competition. This report is entitled US-Iranian Strategic Competition in Sanctions, Energy, Arms Control, and Arms Transfers. It is available on the CSIS web site at:

https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120426_Iran_Sanctions.pdf.

Comments on this report will be extremely helpful and should be sent to acordesman@gmail.com.

The report provides an in depth analysis of the ways that the US and Iran compete in four interrelated areas—sanctions, energy, arms control, and regime change. This competition has been steadily escalating since November 2011, when a new IAEA report and an alleged assassination plot spurred a renewed round of sanctions from the US and its allies.

The report also examines the impact of new US, European, and other efforts to push Iran towards giving up the parts of its nuclear programs that seem designed to give it a nuclear weapons capability.

This competition takes place at levels ranging from the national to the IAEA and the UN. The patterns in this competition have become extremely complex and it is tempting to focus separately on each aspect of the civil competition that has been outlined above. In practice, however, the patterns of interaction between each form of competition have acquired a cyclical consistency that seems likely to go on indefinitely into the future. As Iran moves forward in areas that could give it nuclear weapons and long-range missiles, the United States will most likely react with diplomacy, sanctions, arms control initiatives, and efforts to strengthen US and Southern Gulf military forces and deterrent capabilities.

Managing the interlocking relationships between China, Russia, Turkey, and Iran is a vital component of effective US policy in this area. The Chinese and Russians are both primarily concerned with advancing their own interests, and they each maintain robust commercial ties with Iran, are ambivalent about strong US regional influence, and have veto power at the UN Security Council. These factors make them essential players in US-Iranian Competition. Turkey, similarly, is an ambitious regional power with growing ties to Iran. The Turkish-Iranian relationship is important for Washington to manage because of Turkey’s growing regional clout and its proximity to American ground forces in Northern Iraq.

No matter what the US and its allies do, however, it is not clear that sanctions can succeed in altering Iranian nuclear ambitions or bringing stability to US and Iranian competition over nuclear weapons and security in the region.

On the positive side of the equation, the recent push toward enhanced sanctions and growing international isolation appear to be having a real impact on the Iranian economy. Iran’s actions indicate that new sanctions and international—as well as internal—pressure is having serious effects. The Iranian Rial has become destabilized and fallen to record lows as currency markets react to the prospect of more limited foreign trade.

There is some historical evidence that Iran responds pragmatically when the costs of its actions become too high. Iran’s steadily more divisive internal politics also offer some hope that a more moderate and less hostile regime may eventually emerge. Patience, sanctions, and diplomacy do offer hope of buying time in allowing such change. These are all reasons why the US, Britain, France, Germany and other allies, should continue to push hard to contain and isolate Iran while attempting to extract concessions, buy time, and weaken the regime’s nuclear efforts.

On the other side, diplomatic and political options cannot force Iran to change its current policies and nuclear efforts. The recent push toward enhanced sanctions and growing international isolation of Iran may also push Iran to select new strategic options. Iran’s threats to close the Strait of Hormuz and conspicuous missile testing are evidence that it may react to pressure in ways that lead to prolonged confrontation.

When these missile tests and military maneuvers are combined with Iran’s threat to close the Strait of Hormuz, they give the impression that Tehran increasingly sees military threats, exercises, and pressures on world oil prices as a possible way of easing sanctions and/or buying time as its nuclear and missile programs move forward.

Iran’s Foreign Minister did call for renewed nuclear talks with the West in January 2012. Unfortunately, past history warns that Iran’s negotiating efforts may be little more than another round of delay tactics. Like Iran’s threats, this new call for diplomatic engagement seems likely to be a ploy to buy time, and is a familiar part of the US-Iranian Strategic relationship.

As the other reports in this series show, it is far from clear that sanctions will stop Iran from moving forwards toward a nuclear weapons capability, if not actual deployment. It is already clear that it is building up its long-range missile forces, and it remains a declared chemical weapons power. As its recent exercises in the Gulf show, it is steadily building up its capabilities for asymmetric warfare in ways that can threaten and be used to deliver a wide range of attacks. It also continues to use its Al Quds force, intelligence services, and diplomats to pose a growing threat to the Arab states and Israel and to seek an axis of influence that includes Iraq, Syria, and Lebanon.

The end result is that the US, its Southern Gulf allies, Jordan and other friendly Arab states, and Israel may well be facing years in which the struggle over sanctions, energy exports, and arms control outlined in this analysis remain part of a process of steadily escalating confrontation and present the constant risk of escalation. At the same time, the need to warn, deter, and contain is very different from giving military options a priority. The real world political and strategic results of replacing sanctions and diplomacy with the use of force are so unpredictable — and the risks so high — that this should be only a last resort. What many today are describing as a “crisis” may well be an enduring reality that can only be ended by internal regime change in Iran and only contained by close cooperation between the US, the Southern Gulf states, other Arab states, and key allies like Britain and France.

This report is part of a series of chapters in an electronic book on US and Iranian competition. Below you will find a link to each chapter of the US-Iranian Strategic Competition book available on the CSIS website.

1. Introduction
   (http://csis.org/files/publication/120315_ch_1_iran.pdf)
    
2. Types and Levels of Competition
   (http://csis.org/files/publication/120315_iran_ch2.pdf) This chapter examines the various arenas in which Iran and the U.S. compete for influence.
    
3. Iran and the Gulf Military Balance
   (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120221_Iran_Gulf_MilBal_ConvAsym.pdf) This chapter examines Iran’s Military forces in detail, and the balance of forces in the Gulf Region.
    
4. Iran and the Gulf Military Balance II
   (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120222_Iran_Gulf_Mil_Bal_II_WMD.pdf) This chapter examines Iran’s Missile and Nuclear forces.
    
5. The Sanctions game: Energy, Arms Control, and Regime Change
   (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120124_Iran_Sanctions.pdf) This chapter examines the impact of sanctions on the Iranian regime, Iran’s energy sector, and the prospects for regime change in Tehran.
    
6. US and Iranian Strategic Competition in the Gulf States and Yemen
   (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120228_Iran_Ch_VI_Gulf_State.pdf) This chapter examines the competition between the US, and Iran and how it affects Yemen, Saudi Arabia, Bahrain, Kuwait, the UAE, Oman and Qatar.
    
7. The Outcome of Invasion: US and Iranian Strategic Competition in Iraq
   https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120308_Combined_Iraq_Chapter.pdf This chapter examines in detail the role Iran has played in Iraq since 2003, and how the US has tried to counter it.
    
8. U.S. and Iranian Strategic Competition: The Proxy Cold War in the Levant, Egypt and Jordan
   (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120312_Iran_VIII_Levant.pdf) This chapter examines US and Iranian interests in the Israel, Jordan, Lebanon, the Palestinian territories, Egypt and Syria.  The military balance is also analyzed.
9. The United States and Iran: Competition involving Turkey and the South Caucasus (http://csis.org/files/publication/120309_Iran_Chapter_VIII_Turkey_Caspian.pdf) This chapter analyzes the US and Iranian competition over influence in Armenia, Turkey, Azerbaijan and Georgia.
10. Competition in Afghanistan, Central Asia, and Pakistan
    (http://csis.org/files/publication/120312_Iran_Chapter_X_AfPakCentAsia_AH...)This chapter examines the important role Iran plays in the ongoing conflict in Afghanistan, and how the US and Iranian rivalry affects Afghanistan, Pakistan, and Central Asia.
11. The Impact of China and Russia
    (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/REPORT_Iran_Chapter_X_China_and_Russia_Final_Revision2212.pdf)  This chapter examines the complex and evolving relationships between China, Russia, Iran and the US.
12. Competition Involving the EU, EU3, and non-EU European States
    (https://csis-website-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/publication/120305_Iran_Chapter_XI_Europe.pdf)This chapter looks at the role the EU, and in particular the EU3, have played as the U.S.’s closest allies in its competition with Iran.
13. Peripheral Competition Involving Latin America and Africa
    (http://csis.org/files/publication/120404_Iran_Chapter_XIII-Peripheral_St...)This chapter examines the extent and importance of the competition between the US and Iran in the rest of the world.
14. Policy Implications
    (http://csis.org/files/publication/120314_Iran_X_Policy_Implications.pdf)