With the deadline for foreign investment withdrawal from Iran set by Washington approaches, US President Donald Trump might re-impose crippling sanctions against both Iran and foreign companies enjoying business connections with the Iranian market. Meanwhile, Tehran has vowed to thwart Washington’s efforts to block its oil exports and shown its determination to resist US pressure.
There are two measures Iran may take as a counterattack against US sanctions. On the one hand, Iran might threaten to restart its nuclear research and development process to force Washington and its Middle East allies to accept its demands to lift the sanctions. On the other hand, Iran might disturb international oil prices by increasing its oil exports to disrupt Saudi Arabia’s plan of increasing international oil prices to alleviate its own financial burden.
However, the possible countermeasures from Iran seem powerless. On the one hand, Iran’s efforts to restart nuclear facilities might provoke European states, especially France, Germany and the UK. Although these countries do not agree with Trump’s sanctions against Iran, their stance does not mean that European states might accept Iran’s plan to restart its nuclear facilities. Iran’s determination of re-starting its nuclear development program, especially its nuclear weapon program, will distance it from European states and further deteriorate their diplomatic relations.
On the other hand, Iran’s efforts to increase oil productions and oil exports might be blocked by Washington’s punitive measures. Iran has been looking at ways to keep exporting oil after the Trump administration threatened to impose sanctions on Tehran's business partners if they do not cut Iranian oil imports to "zero" by November 4, in an attempt to further isolate Tehran politically and economically.
Given the pressure from Iran, many European firms that once harbored interest in investing in Iran’s market have already withdrawn, while India, the second biggest oil buyer of Iranian oil after China, also asked refiners to prepare for a "drastic reduction or zero" of Iranian oil imports to protect itself from Washington’s sanctions.
Trump’s plan is to bring Iran back to the negotiating table to accept new terms offered by Washington through severe sanctions. The logic is that imposing severe sanctions against Iran will not only force Iran to give up its nuclear ambitions, but also to accept new terms, including suspension of its involvement in Syria, Lebanon and Yemen, and termination of its missile research and development program.
This approach was tested under the Obama administration. The sanctions designed by both US and European states led to economic hardship and forced Iran to suspend its nuclear program and sign the nuclear deal in 2015 under its new "moderate" President Hassan Rouhani.
However, this approach might not be repeated. Rouhani’s signature of the nuclear deal was met with tremendous pressure at home. Trump’s withdrawal from the agreement triggered the disappointment of Iranian public towards not only Washington, but also Rouhani and the "moderate" bloc inside the country. Therefore, it is much more difficult for any Iranian leader to "do business" with the US again in the future, even with a harder economic situation following severe sanctions.
Trump’s policies on Iran are contradictory. On the one hand, Trump wants to "destabilize" the Iranian government, while on the other hand, Trump intends to bring Iran back to the negotiating table to accept Washington’s new terms.
Perhaps, Trump should first get straight what he really wants before taking action.
Author: Wang Jin is a fellow at the Charhar Institute and Syria Research Center from Northwest University in China.