Crisis in the Persian Gulf Region

The high-octane crisis in the Persian Gulf Region that began last year with the unilateral withdrawal of the United States from the nuclear deal isintensifying with no de-escalation in sight. The war-of-words between the Iranians and the Trump administration intensified after an Iranian supertanker was seized at the British overseas territory of Gibraltar on July 4.Iranians have repeatedly cautioned England against a “dangerous game with no end in sight”, urging them to release their supertanker. In return President Hassan Rouhani warned them of the “consequences” of a “very juvenile, heinous, and wrongful” action.[1]

Meanwhile, England has accused the Islamic Revolution Guards Corps (IRGC) of making a failed attempt at impeding a British Heritage oil tanker at the exit of the Gulf into the Strait of Hormuz.[2] Although the Iranians rejected the claim, this appears to be another attempt by Iran to put pressure on the British. If that is so, there appears to be no sign of immediate normalization in sight as on 12 July when the UK ordered the second warship HMS Duncan, currently stationed in the Mediterranean, to move forward to the Persian Gulf.[3]

Broken Deal?

After weeks of negotiations, Iran had finally agreed to a long term nuclear programme and signed the historic Joint Comprehensive Plan of Action (JCPOA) on 14 July 2015 with P5+1 (China France, Germany, Russia, UK and USA), agreeing to “extraordinary and robust monitoring, verification, and inspection”.[4]While many criticized the terms of the deal as being too accommodative to Iranians and hence a “bad deal”, its supporters – including President Barrack Obama – had maintained that it might not be a perfect deal, but was better than no deal.

US President Donald Trump was opposed to the 2015 nuclear deal from the very beginning and had made it one of his poll planks. There were speculations of the US withdrawing from the deal from the day President Trump took over the office at the Oval, which he finally did in May2018,once again putting sanctions on Iran. President Trump had said, “We will be instituting the highest level of economic sanction,” adding, “Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.”[5]

After President Trump unilaterally withdrew from the deal, President Barrack Obama had issued a statement terming it “misguided”. Hehad said, “The JCPOA is in America’s interest – it has significantly rolled back Iran’s nuclear program. And the JCPOA is a model for what diplomacy can accomplish… walking away from the JCPOA risks losing a deal that accomplishes – with Iran – the very outcome that we are pursuing with the North Koreans…The consistent flouting of agreements that our country is a party to risks eroding America’s credibility, and puts us at odds with the world’s major powers.”[6]

Iranian Foreign Minister Javed Zarif has repeatedly blamed the “B-Team” — US National Security Adviser John Bolton, Israel Prime Minister Benjamin Netanyahu, Crown Prince Mohammed bin Salman of Saudi Arabia, and United Arab Emirates President Mohammed bin Zayed — for stirring up trouble for Iran in the region by “pushing the US toward disaster” in spite of Trump’s campaign promise not to get involved in expensive foreign wars.[7]It is a fact that the Iranian’s bête noire in the Middle-East – KSA, UAE as well as Israel – have never been in support of the deal with Iran and have been vocal champions of sanctions on Iran.

Crippling Iranian Economy

From May 2019, the waiver that the US had allowed to some countries – including India – on oil purchase from the Islamic Republic hasalso ended, further affecting the Iranian economy. All the European Union countries stopped importing oil from Iran since last November while India too has almost halted the import since May 2019, leaving China as one of the only major economies that still imports oil from the Persian Gulf.

New Delhi has indicated willingness to halt trade with Iran in contrast to its earlier stand of finding alternate ways of payment: “Modi government wants to be on same page as Trump administration to sideline Islamabad, but increasing proximity with Israel as well as Saudi Arabia and the UAE, all of which have hostile relations with Iran, cannot be ignored either.”[8]Iran’s oil production has fallen to the historic low in June already to 2.3 million barrels per day while its export has gone down to 380,000 barrels per day, forcing them to take desperate measures.[9]

Ongoing Stalemate

In the latest round of war of words, Iran has said that it will increase the uranium enrichment level from agreed 3.67 percent of purity – just enough to fuel nuclear power plants without any threat of using it for nuclear weapons – to 4.5%. The calibrated enrichment is a symbolic violation and poses no immediate threat. It is still much below the 20% that Iran had before the nuclear accord. It should be noted here that roughly 90% enrichment is needed for uranium weapons-grade.[10]

Nonetheless, President Trump tweeted on 10 July, “Iran has long been secretly “enriching,” in total violation of the terrible 150 Billion Dollar deal made by John Kerry and the Obama Administration. Remember, that deal was to expire in a short number of years. Sanctions will soon be increased, substantially!”

On its part, Iran maintains that it has slowly begun to increase the enrichment after the expiry of the sixty days deadline that it has given to the European Union’s JCPO Apartners to convince the US and save the deal from collapse. Tehran is also upset with EU countries for the slow progress on the proposed Instrument in Support of Trade Exchanges (INSTEX) for non-dollar trade with the Islamic Republic.

Who Blinks First?

Despite “maximum pressure” that President Trump has put on Tehran, White House knows that a 1953 kind coup that replaced the nationalist government of Mohammad Mosaddegh with monarchical rule of Mohammad Reza Pahlavi is not possible now.What the Trump administration has also failed to realize is that, at least by the Iranian standards, Rouhani’s government is liberal and friendly and that by forcing him to the wall, they may end up strengthening the conservative nationalists in the process.

In fact, the well thought-out statements and actions from Tehran appears to have twin purposes of asserting pressure on their allies to save the deal, while simultaneously catering to the nationalists domestically so as not to lose support of the people in the wake of rising inflation. Moreover, it is unlikely that an isolated USA will go into another war months before the race for the next year presidential election in which President Trump is going to seek a second term.

In fact, on Friday, the House voted to prevent the Trump administration “from going to war with Iran without congressional approval, after more than two dozen Republicans joined Democrats to include the provision in the House’s annual defense authorization bill.”[11] The Trump administration says they are open to negotiations with Iran, but for a better deal and on their terms, while Tehran wants the US to first withdraw economic sanctions, allow it to sell its oil before further talk. None of these appear likely before the conclusion of the US presidential elections next year. As such the current Persian Gulf crisis is more of battle of nerves that has turned into a juvenile game of who blinks first.

[1]Press TV, ‘UK urged to immediately release Iranian supertanker, avoid ‘dangerous’ game’,’ 12 July 2019. URL  https://www.presstv.com/Detail/2019/07/12/600745/Iran-mousavi-oil-tanker-UK-gibraltar-dangerous-game .

[2]BBC, ‘Threat level raised to ‘critical’ for UK ships in Iranian waters’, 11 July 2019. URL: https://www.bbc.com/news/uk-48956547 .

[3]BBC, ‘Iran tanker row: UK to send second warship to the Gulf’, 12 July 2019. URL: https://www.bbc.com/news/uk-politics-48958359 .

[4]BBC, ‘Iran nuclear deal: Key details’, 11 June 2019. URL: https://www.bbc.com/news/world-middle-east-33521655 .

[5]Tom DiChristopher, ‘Trump announces he will withdraw US from Iran nuclear deal and restore sanctions’, CNBC, 8 May 2018. URL: https://www.cnbc.com/2018/05/08/trump-to-announce-he-will-withdraw-us-from-iran-nuclear-deal.html .

[6]CNBC, ‘‘A serious mistake’: Read Barack Obama’s statement on President Trump’s decision to pull out of the Iran nuclear deal’,  8 May 2018. URL: https://www.cnbc.com/2018/05/08/a-serious-mistake-read-obamas-statement-on-trumps-decision-to-pull-out-of-iran-deal.html .

[7]Asia Society, ‘5 Takeaways From Iran FM Mohammad JavadZarif’s Appearance at Asia Society’, 25 April 2019. URL: https://asiasociety.org/blog/asia/5-takeaways-iran-fm-mohammad-javad-zarifs-appearance-asia-society?utm_source=youtube.com&utm_medium=referral

[8]M. Reyaz, ‘Has India Put Bilateral Relations With Iran At Stake For MasoodAzhar?’ IndiaTimes.com, 8 May 2019. URL: https://www.indiatimes.com/news/india/has-india-put-bilateral-relations-with-iran-at-stakes-for-masood-azhar-366813.html .

[9]Sara Vakhshouri, ‘Iran’s Strategy to Tackle Sanctions: Pre-selling Oil’, Atlantic Council,  11 July 2019. URL:  https://www.atlanticcouncil.org/blogs/iransource/iran-s-strategy-to-tackle-sanctions-pre-selling-oil#.XSdwBtpknHs.twitter .

[10]Francois Murphy, ‘Iran enriching uranium to 4.5% purity, IAEA tells member states’, Reuters, 10 July 2019. URL: https://www.reuters.com/article/us-mideast-iran-usa-iaea/iran-enriching-uranium-to-45-purity-iaea-tells-member-states-idUSKCN1U51CN .

[11]Karoun Demirjian & Mike DeBonis, ‘Congressional reporter focusing on national security’, Washington Post, 12 July 2019. URL: https://www.washingtonpost.com/national-security/house-votes-to-restrain-trump-on-war-with-iran-setting-up-showdown-with-the-senate/2019/07/12/1305584e-a4bb-11e9-bd56-eac6bb02d01d_story.html.

M. Reyaz

Adjunct Researcher

15 July 2019