December 28, 2011

Without Renewed Diplomacy, War with Iran Lies around the Corner

Iran’s warning that it will close the Straits of Hormuz if an oil embargo is imposed on it has sent oil prices soaring and raised fears that yet another war in the Middle East may be in the making. These fears are not unfounded, particularly if diplomacy continues to be treated as a slogan rather than as a serious policy option.

“Not even a drop of oil will flow through the Persian Gulf,” Iranian Vice President Mohammad Reza Rahimi warned, according to the state-controlled Islamic Republic News Agency (IRNA). Washington quickly dismissed the threat as mere bluster. But energy markets react not just to the credibility of threats and warnings, but on the general level of tensions.

While Iran is unlikely to act on its warning in the short term – closing the Straits would after all also choke of Iran’s own ability export oil and potentially pit it against Russia and China – these threatening statements do fill one important function: They cause oil prices to rise due to the increased risk premium. Higher oil prices are good for Iran but bad for the U.S. and the European Union. The euro is already risking collapse and the Obama administration cannot afford higher gas prices (and the negative impact that will have on job creation) in an election year.

It is likely to get worse. As the Obama administration – pushed by domestic political forces – continues to ratchet up pressure on Iran in the elusive hope that the government in Tehran will cry uncle and give up its nuclear program, the Iranians will respond to escalation with escalation.

If the name of the game is to harm the other side, then both countries can clearly play this game.

Initially, threats of closing the Straits of Hormuz were made by mid-ranking members of the Iranian parliament. Now Vice Presidents in Mahmoud Ahmadinejad’s cabinet make them. If the current trajectory remains, we will likely see more senior Iranian government figures make even more specific warnings with even greater frequency.

Along side the heightened rhetoric, we will likely see more Iranian military exercises in the Persian Gulf, potential provocations between the Iranian Revolutionary Guard Corps navy and EU and U.S. navies by heightening the level of “testing the other side,” perhaps even “intentional accidents” at strategic targets throughout the region. These measures will at a minimum help push the risk premium of oil to even higher levels.

Even more aggressive measures will likely be pursued by Iran in the next phase of this standoff with the West.

Such is the logic of pressure politics – pressure begets pressure and along the way, both sides increasingly lose sight of their original endgames. As this conflict-dynamic takes over, the psychological cost of restraint rises, while further escalatory steps appear increasingly logical and justified. At some point – and we may already be there – the governments will no longer control the dynamics. Rather, the conflict dynamic will control the governments.

Though neither side may have intended to drive this towards open war, but rather to merely deter the other side or compel it to change its policies, pressure politics in the absence of real diplomacy has a logic of its own. This formula simply drives us towards confrontation, whether we intend it or not.

But all hope is not lost. Contrary to common perceptions, diplomacy has not been exhausted. In fact, it didn’t even fail – it was prematurely abandoned. As I describe in A Single Roll of the Dice – Obama’s Diplomacy with Iran, Barack Obama’s political maneuverability for diplomacy with Iran was limited – and whatever political space he had, it was quickly eaten up by pressure from Congress, Israel, Saudi Arabia and most importantly, by the actions of the Iranian government itself in the fraudulent 2009 elections.

By the time diplomacy could be tried in October 2009, Obama’s political maneuverability had become so limited that its entire Iran policy – in the words of a senior Obama administration official – had become “a gamble on a single roll of the dice.” It either had to work right away, or not at all. And diplomacy rarely works instantaneously.

The Iranians did not come to a “yes,” as Obama had hoped, during the October talks. Only weeks later, the Obama administration activated the pressure track and abandoned diplomacy in all but name. Ironically, Brazil and Turkey managed through their diplomacy to get Iran to a “yes” only six months later. But by that time, Obama had committed himself to sanctions and the pressure track. Between a sanctions resolution at the United Nations and a diplomatic breakthrough based on the benchmarks of the original October deal, Obama rejected the diplomatic opening and opted for sanctions and pressure politics.

Diplomacy cannot work under such constrained circumstances. It needs time, patience, perseverance and a clear understanding that the cost of abandoning diplomacy is greater than the cost of sustaining it – because of the catastrophic repercussions of the military confrontation that will follow collapsed talks. While this might have escaped decision makers in Washington and Tehran earlier, there should be little doubt about its veracity today.

This article first appeared on CNN.com.




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