Vying to become the godfather of just about every fragment of the globe has its own tribulations. More often than not you are faced with a multitude of options, and sometimes the options manage to tick both the ‘Do’ and ‘Do not’ column almost simultaneously; leaving you staring poker faced down the barrel of indecisiveness. To complete the global hegemony US has so many bases to cover that it has been bombarded with a blitzkrieg of choices – a blitzkrieg that has the White House hankering after political permutation formulas. With so many tradeoffs hinging on Washington’s sanctions on Tehran, US’s century old ‘Heads I win, tails you lose’ coin doesn’t look like working on the Iranian front.
Congress’ approval of new sanctions on Iran last week was a statement of intent that US is eyeing to mash Iran’s economy. The sanctions would mean that Tehran would find it hard to sell its oil, and of course nothing would hurt Iran’s fiscal scheme of things more than a slash in its oil revenue. A plunge in revenue would in turn mean that the Iranian wallet would not be thick enough to furnish its nuclear programme – the butt of US theatrics. However, the situation is a blatantly double-edged sword, if there ever was one! For, US might manage to goad Iran’s nuclear intent, but the fact that Iran is a major oil supplier would mean that eliminating Iranian oil from the global market would lead to precipitous escalation in oil prices. As things stand, and have stood for a while now, oil demand has become a bottomless bit, and subtracting one of the chief supply sources would further exacerbate the demand-supply disparity. While this demand-supply equation would’ve been at the forefront of the aforementioned permutation formulas, US Congress’ approval of the sanctions means that the menace of a nuclear armed Iran is more daunting for Washington than oil market pandemonium.
While last week the US Congress had to mull over tradeoffs regarding oil, the coming potential sanction engulfs a tradeoff pertaining to another lucrative energy source – natural gas. In this moment in time Europe depends on Russia for the major bulk of its gas supply; and hence, Russians have quite often used gas as a political tool to influence matters in Europe – most notably in Ukraine, that suffered a gas cutoff in January 2009. Experts opine that Russian aim has been to reshape the post-Soviet sculpt of Europe and its natural gas source is a telling instrument that is quite often used to influence matters. Therefore, Europeans have long yearned for an alternate supply of natural gas to counter the Russian hegemony and they have had the US backing regarding the matter as well. One such source has been located in Shah Deniz field in Azerbaijan, and European leaders have been eyeing the construction of a pipeline that would bypass Russian pipelines and bring gas straight to Europe.
Nonetheless, the twist in the tale is courtesy the presence of Naftrian Intertrade Co. (NICO) – owned by the Iranian government – in the Shah Deniz consortium. This little problem means that the catch-22 ensnaring the US hierarchy is that it has to choose between sanctions on foreign joint ventures involving the Iranian government and allowing Russian impediment in European politics owing to its supremacy over gas supply to the continent. Sanctions over Shah Deniz would also counter the historical US policy of sponsoring gas from Central Asia to Europe as an alternative option. All the same, another pivotal façade worth considering is that Iranian stake in Shah Deniz is considerably less – NICO has merely a 10 per cent ownership – than Iranian prominence in the oil game. Couple this with the fact that Europe is in dire need of a gas alternative, and one gets the feeling that US might opt out of this sanction, even though it would increase European dependence on Iran.
The nuisance that Iran has become for the US has given Washington a continuum of sleepless nights for ages. The current vicious circle for the US on the Iranian front has witnessed historical US policies and vested interests on a collision course. Strategies are knocking the daylight out of each other on the Washington drawing board; let’s see which one is the last one standing.
The writer is Sub-Editor,
Profit. He can be reached at [email protected]
