By Sammy Barker
On 27 May, during his visit to Tokyo, US President Trump told reporters that Iran “has a chance to be a great country with the same leadership”. He added “I’m not looking to hurt Iran at all. I’m looking to have Iran say no nuclear weapons. No nuclear weapons for Iran and I think we will make a deal.” Given that just days before he had threatened to “end” Iran, this may seem a remarkable turnaround.
Certainly the immediate days before his Tokyo speech saw an escalation. An additional 900 US troops were newly deployed to Qatar and Saudi Arabia, while a further 600 US troops attached to a Patriot missile had their deployment extended. That’s 1,500 extra troops in total. Yet the initial request from CENTCOM had been for 5,000 extra troops, while the Pentagon had proposed 10,000 extra troops. So, perhaps this was a sign that Trump is hesitating.
There has been no let-up in the impact of US sanctions upon Iran. The Financial Tribune reported, on 11 May, that Iran’s production of cars and commercial vehicles was just over fifty per cent of what it had been in the same period last year. The national currency unit, the rial, has lost two thirds of its value against the dollar. Inflation is expected to reach fifty per cent, its highest level since Iraq invaded Iran in 1980.
Oil exports have been collapsing. In April 2018 Iran was exporting 2.5 million barrels per day. In April 2019 this fell to less than 1 million barrels per day. It appears the figures for May are around 500,000 barrels per day.
In late May the Indian Ambassador to Washington stated that no purchases of Iranian oil were made after the end of the US waiver on 2 May. At the same time, the Turkish Deputy Foreign Minister announced in Washington that Turkey had ended all purchases of Iranian oil. This was a serious blow, India and Turkey are 2nd and 3rd largest buyers of Iranian oil (China is the largest). It represented a loss of over half a million barrels of oil a day.
Iran biting back
It would then seem that the US policy of “maximum pressure” is working. Except that no-one has informed the Iranian people. All serious reports suggest that the US campaign is uniting the Iranian people not against its regime, but against the US offensive. The country is switching to “resistance economics”. An example of this is the third phase of extending the Persian Gulf Star Refinery, launched on 18 February this year.
This is an investment programme, involving no foreign loans, aiming to make Iran self-sufficient in gasoline production for domestic purposes. Despite having the world’s fourth largest proven crude oil reserves, Iran has been reliant upon imports to meet domestic gasoline demand. This has been because of insufficient refining capacity of Iranian crude. The Persian Gulf Star Refinery will now be able to refine 105 million litres of gasoline. Daily consumption in the summer of 2018 was 97 million litres.
Not all problems are thereby resolved; consumption is increasing by 9 per cent. But the important point is the shift to long term resilience for the economy despite the attempts to strangle it by the US. The supreme leader, Ayatollah Ali Khamenei has instructed all sections of the government to carry through the policy of “resistance economics”.
China and India shifting to Iran?
Trump’s policy is creating concern, particularly in the developing countries. Notably Trump’s trade war with China appears to be leading it to a more pronounced support of Iran. Reuters reported on 16 May that a tanker violated US sanctions by offloading 130,000 tons of Iranian oil into storage units near the eastern Chinese city of Zhoushan. At the time of writing, the tanker Pacific Bravo is carrying 2 million barrels of Iranian oil heading for Hong Kong. The tanker is owned by the Bank of Kunlun, which in the past has been Beijing’s major channel for transactions with Iran.
The Hong Kong city government has dismissed US warnings of penalties if it does business with the tanker. A spokesperson for the city’s Commerce and Economic Development bureau said that the city’s government had “strictly” implemented UN Security Council sanctions, which, however, don’t impose “any restrictions on the export of petroleum from Iran”.
The big victory of the Modi government has also apparently caused a reappraisal of their trading position with Iran. India imports eighty per cent of its oil needs, and Iran has been its third largest supplier after Iraq and Saudi Arabia. A number of press reports suggest that the Indian government will immediately institute talks with the Iranian government with the aim of resuming supplies. The reports indicate that the Indian government is interested in paying in rupees, although they have traded “in kind” against Iranian oil in the past (direct exchange of goods).
Iran’s diplomatic offensive
Iran has also been touring countries in a diplomatic offensive to avoid isolation. It is also proposing initiatives to lower regional tensions. It has agreed with the Iraqi government on dredging the Shatt al-Arab waterway, a disputed cause in the Iraq/Iran war.
It has offered a “non-aggression” pact to the Gulf monarchial states. In this, the Iraqi government has offered to act as a mediator for the pact. This represents a positive alternative to the Saudi’s attempts to unite these states, and the Arab nations against Iran.
In addition, the governments of Oman and Iraq have offered to assist in bringing together US/Iranian negotiators. The Omani regime issued a statement on 24 May saying, “We and other parties seek to calm tensions between Washington and Tehran … A war could harm the whole world, and both the American and Iranian sides are ‘aware of the danger’.” This is important because it was the Omani regime who first established the secret contacts which resulted in the formal negotiations between the then Secretary of State for the US, John Kerry, and the Iranian Foreign Minister, Mohammad Javad Zarif.
For the Iraqi government securing peace is central to Iraq’s reconstruction. As it is, the US has had to grant the Iraqi government a waiver on gas supplies from Iran. The Iraq power grid is fueled by Iranian gas purchases. In the summer of 2018 there were violent protests in the south of the country due to electricity shortages. The Iranian Gas company is anticipating seeing its supplies to Iraq increase from 28 million cubic litres a day to 40 million.
The Iraqi PM, Adel Abdel Mahdi, stated on 25 May that he intends to send a delegation “very soon” to the US and Iran to ease tensions. The Iraqi government is calling for Iran to remain within the terms of the nuclear agreement (JCPOA). On this, the International Atomic Energy Agency reported at the end of May that Iranian stores of key nuclear materials have increased but remain within the limits of the 2015 deal.
The silence of the E3 and EU
These international initiatives have not been matched by initiatives from within the EU. A letter dated 7 May from the US Treasury Department was obtained by Bloomberg. It indicated that anyone associated with the INSTEX financial vehicle set up by the E3 (Britain, France and Germany) could be barred from the US financial system. Asked to comment on the letter, the Treasury Department issued a statement – “entities that transact in trade with the Iranian regime through any means may expose themselves to considerable sanctions risk, and the Treasury intends to aggressively enforce our authorities”.
Early in May, US Secretary of State Mike Pompeo, while visiting London, said there was no need for INSTEX as humanitarian and medical products were not sanctioned. However the effect of sanctions has definitely impacted upon supposedly exempted products.
The response of the E3 has been essentially silence. No progress has been offered on honoring the benefits Iran is entitled to for adhering to the nuclear agreement. Britain’s Foreign Minister, Jeremy Hunt, adopted the stance of a poodle, telling reporters in Geneva that “I would say to the Iranians : Do not underestimate the resolve on the US side”. This is, of course, deeply insulting to the Iranian people, and demonstrates the complete absence of influence that characterizes current British foreign policy.
Japan acting for US
Despite the continued US build up, it is evident that the US is making moves towards dialogue, even if highly mediated. Following his meeting with Trump, Japanese PM Shinzo Abe is to meet Khamenei later this month. This is the first ever meeting between a Japanese PM and the Iranian supreme leader. Abe will also meet with Iranian President Hassan Rouhani before meeting Khamenei,
Further indication of the shift in the US position was given by Pompeo when he told a Swiss press conference, on 2 June, that Washington is willing to open talks with Iran “with no preconditions”. A year earlier, Pompeo had issued twelve demands that Iran had to meet before it could get agreement with the US.
In response to these moves, the Iranian regime has been deeply skeptical. Khamenei likened negotiations with the Trump administration to “poison” since “they don’t stand by anything”. Rouhani stated that Tehran will not be “bullied” into negotiations, and will only sit down for talks if Washington shows it “respects” Iran.
The historical record of interference in Iran
This last point is of great importance. The Iranian people have endured two centuries of uninterrupted interference in their affairs. Since the start of the twentieth century, a partial audit of this reveals that the imperialist powers invaded and occupied the country twice; organized two coups against constitutional governments, replacing these with autocratic dictators; supported Saddam Hussein’s eight year war against the country, and have continuously sanctioned the economy. Securing an independent state and policy is quite fundamental and the failure of the US government to grasp this is bringing about a dangerous crisis in US foreign policy.
Iranian-American, Trita Parsi, explains this in his authorative study of the nuclear agreement, “Losing an Enemy”. He states “… one cannot underestimate the importance of mutual respect, even though it cannot be measured or quantified. For the Iranians, this was essential beyond its particular cultural sensitivities: respect signaled Western acceptance of Iran as a nation, as a society as well as a political system. The Iranians see themselves as heirs to an ancient empire, grieve over its fall from grace, and abhor how the West has treated it over the past two centuries. When Zarif insisted that diplomacy could succeed only if conducted with “mutual respect”, it was a code for “You need to treat Iran as a real society and political system,” Iran scholar Farideh Farhi explained. Iran prides itself as not making key state decisions solely through an authoritarian ruler or clique. Iran has institutions that have to weigh in and set decision making processes to ensure a proper cost-benefit analysis. In the Iranian mind, these characteristics make Iran a legitimate regional power, unlike its many neighbours, which Tehran believes lack legitimacy and independence”. (Pages 372-3)
It will become apparent whether the US administration is capable of recognizing the failure of its attempt to intimidate the Iranian people. What is essential is that the international anti-war movement continues to organize against the catastrophe that war upon Iran would surely bring.