Experts Warn Latest Trump Administration Move on Iran Could Backfire

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President Donald Trump’s decision Monday to end six-month waivers from U.S. sanctions for five countries that have continued buying Iranian oil — the latest turn of the screw in his Administration’s “maximum pressure” campaign against Iran — was met with predictable outrage from Tehran.

But some U.S. State Department, Defense and intelligence officials and outside experts warn that the move could backfire by causing ripple effects in countries like China, Turkey and Iraq.

In response to the sanctions, Greece, Italy and, Taiwan had stopped buying Iranian oil, but China, India, Japan, South Korea, and Turkey have continued to import Iranian oil. The economic pressure has reduced Iranian oil exports from more than 2.5 million barrels a day to less than 1 million, discouraged foreign investment, and sent the value of Iran’s currency plummeting and inflation soaring.

Announcing the move in a press briefing, Secretary of State Mike Pompeo said the decision to end the waivers was “dramatically escalating our pressure campaign in a calibrated way that meets our national security objectives while maintaining well-supplied global oil markets”.

The Administration’s objective, Pompeo said, include prompt Iran to renegotiate the international agreement halting its pursuit of nuclear weapons, halt its ballistic missile tests, and end its support for terrorist groups, which U.S. officials say include Lebanon’s Hezbollah, the Palestinian Hamas, Houthi militias in Yemen, and authoritarian regimes in Syria and Venezuela.

Israeli Prime Minister Benjamin Netanyahu hailed the move, and Saudi Arabian Energy Minister Khalid al-Falih said his country and others would ensure that “the global oil market does not go out of balance.”

Some U.S. and foreign officials and outside experts, however, argue that the escalating attack on Iran’s economy is unlikely to prompt Iran to halt its support for terrorist organizations; force the country’s clerical rulers to renegotiate the deal halting their efforts to develop nuclear weapons; weaken its Islamic Revolutionary Guard Corps and its elite Quds Force; or turn everyday Iranians against the Islamic regime.

“If you don’t know where you’re going, any road will get you there,” says Aaron David Miller, a Mideast expert and vice president at the Woodrow Wilson International Center for Scholars in Washington. “And what is the Trump Administration strategy toward Iran? Even if it’s regime change or forcing Iran to retrench in the region, this recent move will accomplish neither goal. It might ultimately goad Iran to give the Administration a pretext for military action. But how would this change the balance to America’s advantage?”

Instead, said two U.S. officials who spoke only to the condition of anonymity to criticize the Administration’s Iran policy, the Administration has not given much thought to the likely effects of its Iran policy on oil markets or on the nations, especially China, India, Turkey and Iraq, that now will be sanctioned if they continue to import oil from Iran.

“The Administration has launched a fairly significant initiative without doing the necessary groundwork with the countries that will be most affected,” Suzanne Maloney, an Iran expert at Washington’s Brookings Institution, tells TIME.

Iraq, which remains unstable, host to some remnants of ISIS, and divided on ethnic and religious lines 16 years after the U.S. invasion, is especially vulnerable because imports of Iranian natural gas and electricity are critical to its economy, she says.

Worse, says Maloney, the Administration had signaled since November that the exemptions for buying Iranian oil cut would be made gradually until it abruptly announced they will end on May 2.

Nor, says Maloney, does the Administration appear to have given much thought to how Iran might respond to the latest turn of the screw, which she says are likely to include efforts to disrupt global oil markets when demand reaches its peak this summer.

In a tweet, President Trump said: “Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian oil.”

Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil. Iran is being given VERY BAD advice by @JohnKerry and people who helped him lead the U.S. into the very bad Iran Nuclear Deal. Big violation of Logan Act?

— Donald J. Trump (@realDonaldTrump) April 22, 2019

The two U.S. intelligence officials on Monday dismissed Iran’s threats to close the Strait of Hormuz, but said Tehran could retaliate by disrupting Iraqi oil exports or launching cyberattacks on oil and gas production and export facilities in Saudi Arabia, the United Arab Emirates and Qatar, or even U.S. or European oil companies, which could send oil prices upward during the vacation season in the U.S. and Western Europe.

The officials said the 2012 Shamoon virus attacks on Qatar’s RasGas and on the Saudi oil company Aramco — an attack then Secretary of Defense Leon Panetta called “probably the most destructive attack that the private sector has seen to date” — were traced to Iran.
Oil prices rose about 3 percent at midday on Monday, but remained far below their October high of $86 a barrel for the benchmark Brent crude.

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