Iran: Maximum Pressure and Perfect Storms

Last spring, two weeks after the Trump Administration withdrew from the Joint Comprehensive Plan of Action (JCPOA) - the international arms control deal that curbed Tehran's nuclear program - Secretary of State Mike Pompeo announced a new approach to Iran that, he vowed, included history's most ‘draconian’ sanctions. This renewed economic warfare and a long list of political and military preconditions for talks were soon labeled a “maximum pressure” strategy.

Iran’s Vulnerabilities

From Washington’s perspective, the timing could not be better because Iran is increasingly vulnerable to financial coercion. The initial sanctions already have started to bite, contributing to other economic and political grievances that have ignited multiple protests and labor actions since late last year by merchants, truck drivers, teachers, and others. While Iran will maintain some oil exports—the primary source of government revenues—its sales are declining and could fall farther. This, in turn, could fuel the further devaluation of Iran’s currency, which has declined dramatically over the past twelve months. Despite European promises to facilitate financial transactions and protect companies from American reprisals as long as Tehran remains in JCPOA, European firms are abandoning Iran in order to maintain their profitable U.S. business connections and to avoid secondary sanctions. The International Monetary Fund recently assessed that Iran’s economy has entered a recession, because of U.S. sanctions.

And the pressure building in Iran is not solely economic. As early as 2015, Iranian President Hassan Rouhani warned a group of Islamic Revolutionary Guard Corps (IRGC) officers that, rather than the United States and Israel, Iran’s main enemy was unemployment, inflation, sandstorms, lack of water, and the environmental disaster facing the country, adding that solutions needed to be developed and applied. Instead of finding solutions, however, the regime - over the past three years - has allowed political battles, corruption, mismanagement, and fears of foreign influence, make things worse. President Rouhani’s hardline conservative opponents have actively blocked needed financial reforms. Meanwhile, corrupt IRGC dam construction projects have aggravated water shortages and suspicious security officials have imprisoned environmental activists, despite disappearing lakes and wetlands, polluted air, and farmland lost to desertification. While most Iranians for now, are fixated on the daily struggle to get food and money, water shortages are a potential catalyst for serious anti-regime protests in the cities and in the normally sweltering regions populated by Iran’s Arab and Baluch minorities.

The regime remains unified for now, and its security forces appear prepared to stifle dissent as needed; Iran’s legislature in March, increased the budget for the police forces responsible for quelling protests by 200 percent. The IMF estimated in March that Iran held some $112 billion worth of foreign reserves, and depending on Tehran’s ability to access this money, these reserves will help cover the regime’s bills for at least a couple of years. Because Russia, China, and many European countries want to preserve trade and investments with Iran, ways will be found to keep some business activity going. On top of this, Iran has tremendous experience in evading sanctions on its oil and gas exports.

A Better Deal…

Still, prospects for a successful U.S. attempt to coerce Iran into changing its behavior cannot be dismissed out of hand.  Economic pressure could reduce the hardliners’ resistance to talks, and there already are signs of some weakening. For example, this year the Financial Action Task Force (FATF), an international organization tasked with combating money laundering and terrorism financing, demanded that Iran institute a series of reforms or face sanctions. Khamenei and other hardliners initially opposed any accommodation, but the Supreme Leader later allowed Rouhani and the legislature to undertake efforts to resolve the matter.

The best result for maximum pressure, however, is likely to be an Iranian agreement to bilateral negotiations that may or may not go anywhere. The first obstacle to overcome will be Supreme Leader Ali Khamenei’s position that there should be no talks or relations with an untrustworthy America after the Trump Administration’s unilateral withdrawal from the nuclear deal. Next, it will take some time and a worsening domestic situation before conservative hardliners swallow their objections. Finally, to get Iran to the table, Secretary Pompeo’s demands will need to transition from preconditions—historically a showstopper in gaining Khamenei’s approval for talks—into negotiating topics.

Should talks get underway, expect Tehran to try to run out the clock on the Trump Administration before committing itself to a final agreement.  Tehran will also use the time to allow for the situations in Syria and Yemen to change in its favor, potentially reducing the salience of the U.S. demand for an end to its “destabilizing” behavior.

Even if such negotiations are successful, the Trump Administration, at best, is likely to get a JCPOA-plus that extends some of the timeframes, further reduces, but does not eliminate, Iran’s capacity to enrich uranium, and adds some additional transparency to the program. Iran also might agree to limits on intercontinental ballistic missile (ICBM) developments as long as no other constraints are placed on a missile arsenal Tehran views as an essential strategic deterrent to aggression. Such developments, however, were always a possibility that might have been achieved while remaining in JCPOA, taking advantage of post-JCPOA trust building, avoiding a rift with European allies, and maintaining U.S. credibility.

… Or a Perfect Storm?

Sixteen years ago, in August 2002, CIA provided the George W. Bush Administration an analysis presenting worst-case post-Iraq hostilities scenarios, as the decision to go to war was being made. The paper, "The Perfect Storm: Planning for Negative Consequences of Invading Iraq," proved more prescient than the Intelligence Community’s faulty assessments of Iraqi WMD programs.

Hopefully, someone on the current NSC staff has asked for, and considered, a similar analysis as maximum pressure is implemented and maintained.

Given that the administration’s stated approach appears intended to prompt regime change by the Iranian people, and leaves Tehran the choices of either surrendering or fighting back, a brief outline of such an analysis might include:

• An escalation of violent instability among Iran’s Baluch, Arab, and Kurdish minorities that spills into Pakistan and Iraq, destabilizing the former and possibly provoking Turkish intervention into Iraqi Kurdistan.
• Tehran - blaming its Gulf Arab foes for supporting ethnic minority separatism - retaliates by inciting violence among Shia minorities in Bahrain and eastern Saudi Arabia.
• Political dissent escalates into political violence directed against regime officials. Iran retaliates by attacking dissidents in Europe.
• Similarly, the Revolutionary Guard responds to deaths of IRGC officers by having surrogates target U.S. and Gulf Arab officials in Iraq and U.S. military personnel in Iraq and Syria.
• To retaliate for lost oil sales—and to increase the price of the oil Iran manages to export—Iranian surrogates attack refineries, oil export facilities, and pipelines in the region. Iran’s Houthi rebel allies are armed and encouraged to attack shipping in the Red Sea.
• The Revolutionary Guard takes over the government—either by removing the Rouhani Administration and Iran’s democratic institution, or by assuming power after the collapse of the clerical regime—and retains the regular military’s support because of perceived threats of external enemies.
• An economic collapse and political violence causes refugees—including Iran’s large Afghan refugee population—to flee into Iraq, Turkey, Azerbaijan, and Europe.
• Having failed to reap any benefits from the JCPOA and well aware of the differing fates of Saddam Hussein, Muammar Qadhafi, and Kim Jong-Un, Iran resumes production of fissile material, withdraws from the Nonproliferation Treaty, and terminates all international inspections and oversight.
• Alternately, because Tehran views an attack by Israel and the United States as almost certain should it end transparency into its nuclear program, the regime instead covertly assembles an arsenal of chemical and biological weapons to serve as a strategic deterrent and a new bargaining chip to use with its rivals.

It does not take much imagination to come up with plausible scenarios of how maximum pressure could make the region and U.S. interests there much worse off than they were before November.  Some aspects of the scenarios have already occurred; for example, an Iranian diplomat was recently extradited to Belgium to face charges for a foiled bomb plot targeting a rally by the dissident Mujahedin-e Khalq organization in July. Also, the IRGC recently fired missiles into Kurdish and ISIS-controlled areas of Iraq in retaliation for border violence and a terrorist attack inside Iran.

Mitigating against the risks of a policy “gone wrong” will once again fall primarily on the U.S. military. More than a few of these scenarios could leave Washington with little choice but to conduct military operations in or against Iran. Meanwhile, many of the costs of these secondary consequences of maximum pressure on Iran will be inflicted on Iran’s neighbors, none of which are in particularly secure positions themselves.

Unless the Trump Administration views US interests as risking more regional instability, potential conflict escalation, and a possible Iranian nuclear or other WMD breakout, the answer should be “no.”