Analysis: Will the sanctions work?

Unprecedented EU punitive measures barring the import of Iranian crude oil may have a number of different outcomes.

Iranian President Mahmoud Ahmadinejad at UN 311 (photo credit: REUTERS)
Iranian President Mahmoud Ahmadinejad at UN 311
(photo credit: REUTERS)
BERLIN – Unprecedented EU punitive measures barring the import of Iranian crude oil, and slowly turning the financial screws on the Central Bank of Iran, may have three different outcomes.
First, the EU sanctions, until now, have produced a positive result in raising European unity toward Iran’s failure to adhere to six UN Security Council resolutions demanding that it stop work on its illicit uranium enrichment program.
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Against the background of a creeping economic Euro meltdown, and the dependency of Greece, Spain and Italy on Iranian crude, the new EU oil sanctions represent an audacious move that might, just might, reverse Iran’s drive to obtain nuclear weapons.
According to a report Monday on the news website Now Lebanon, “The Iranian currency, the rial, tumbled Monday in black market trading to a new record low against the dollar, news agencies said, as the EU moved to impose an oil embargo and fresh sanctions on Tehran.”
Economic pain is a factor in the Iranian nuclear calculation. In fact, while speaking to the German news outlet from Tehran, political science Prof. Zibakaram seemed to articulate the anxiety of Iran’s clerical regime.
He said that by blocking revenue in the oil sector you aim to “destroy the existence of the Islamic regime” and declare war on Iran.
It remains an open question whether the sanctions will topple the regime and end Iran’s pursuit of an atomic weapon.
Some experts believe June is a benchmark date to ascertain if Tehran is prepared to make serious concessions. The EU seeks adherence to the UN resolutions and does not have a policy of regime change.
The second, less positive result of EU sanctions is they are staggered.
The EU chief diplomats agreed that EU countries with ongoing agreements to purchase oil and gas products can maintain those contracts until July 1. A measured imposition of oil sanctions can allow Iran to market its petroleum elsewhere. The lucrative Chinese and Indian markets have not cut ties with Iran’s energy sector.
The EU decision to place restrictions on the Central Bank of Iran fall short of the US and British measures to sever all ties with Iran’s major bank. It is unclear what the restrictions are at this stage because the EU has not published the full text outlining its penalties.
According to a Dow Jones Newswire report on Sunday, the EU and the UK lobbied the US to insulate the “Iranian national oil company Naftiran Intertrade Co.’s 10 percent stake in the Shah Deniz II natural gas project” from sanctions.
The British energy giant BP and other European countries are developing oil in Azerbaijan at the Shah Deniz II enterprise.
The final possible outcome is that the sanctions prove ineffective. The nuclear weapons program might be so integral to the regime’s existence in Tehran that the ruling political class is willing to absorb a North Korea-style economic meltdown in exchange for nuclear weapons.
In that case, the EU, as well as the US, would have to analyze what their next step would be.
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