Nuclear deal without US: A Gift to Russia and the Asian Powers

The United States’ unilateral withdrawal from the Iranian nuclear deal (also known as the Joint Comprehensive Plan of Action, JCPOA) has a range of important implications, further consolidating the international system’s pivot to the East. As a matter of fact, President Donald Trump’s announcement on May 8 stirs a complex set of political dynamics (such as Gulf security, regional alignments and oil prices), affecting not only Middle Eastern regional balances, but also the international system and the transatlantic relations more generally.

These dynamics originate from local realities but, at the same time, have truly global impacts thus magnifying interdependence. For example, the rise of global oil prices (which reached US$80 a barrel), due to the foreseen contraction of Iran’s newly sanctioned oil exports, may push Saudi Arabia to slow down with domestic reforms and subsidy cuts, as the International Monetary Fund (IMF) recently warned.

Most of all, Trump’s decision hammers another nail in to the coffin of the liberal international order. Washington is no longer willing to play its traditional role of global leader (a reluctance already visible  during Barack Obama’s presidency), nor actively engage in multilateral institutions (most notably the United Nations), or respect multilateral agreements. The European Union (EU), whose major states played a prominent role in the 5+1 negotiations for the JCPOA (signed in July 2015), emerges as the main hostage of the White House’s hawkish (and short-sighted) policy on Iran, with the risk it will lose significant ground economically and diplomatically.

In contrast, Washington’s choice emboldens Russia and China, who will be able to exert more leverage over Iran and economic, political and military matters in the Middle East more generally. Moscow and Beijing will be even freer to apply their authoritarian model in the highly-divided and unstable Middle East, consolidating local networks of influence and enforcing their strategic values and interests.

The Gulf is the centre of gravity in the Middle East: altering power balances between Saudi Arabia and Iran produces direct consequences for third countries, such as Syria, Iraq, Yemen and Lebanon. And this is definitely what the White House has been looking for. In its new confrontational stance against Iran, the issue is not the nuclear deal per se or Teheran’s compliance with it (which has been certified by the International Atomic Energy Agency, IAEA). Rather, the Trump administration  is primarily concerned to confront Iran’s political, religious and military interference in crucial Middle Eastern countries, an objective that Israel and Saudi Arabia (for the most part) share. The nuclear deal has thus become Washington’s pawn in a wider attempt to restrain Iranian influence in the Middle East.

Trump’s decision on the Iranian nuclear deal threatens to open a real “Pandora’s box” in the region, conveying the message that Washington will support escalation by regional powers (read: Saudi Arabia) against Teheran, maybe with an eye to regime change. This was certainly the implication of Secretary of State Mike Pompeo’s recent speech at the Heritage Foundation, where he called on America’s allies to get tougher, in coalition, on Iran. From a political point of view, recent developments are likely to enhance the most conservative factions in Iran. This will only further narrow reformist President Hassan Rouhani’s room for manoeuvre, forcing him to embrace harder positions vis-à-vis Western states to shore up his position, amid continuing labour unrest across the country.

While open armed conflict between Saudi Arabia and Iran remains a remote possibility, military escalation is more likely than in the past. The risk of direct military confrontation between Israel and Iran is also increasing. Specific geographical flashpoints are proving ripe for concern. A clash between Riyadh and Teheran would likely be triggered in Yemen, with rising Huthi missile attacks against Saudi territory. And Tel Aviv and Teheran would likely face off at the intersection of the Golan Heights and Hezbollah’s redoubt in southern Lebanon.

Iraq is also likely to be negatively affected by rising geopolitical tensions in the Gulf. Pockets of jihadi insurgency remain on the Iraqi-Syrian border close to areas controlled, since the fall of Daesh, by Iranian-backed Shia militias. Iran, the United States and Saudi Arabia have vital, but competing, interests in Iraq. Teheran will struggle to preserve its “Shia corridor” through to the Eastern Mediterranean coast and Riyadh, working now on developing cross-confessional alliances (as with the Shia cleric Moqtada Al-Sadr, the winner of the May 2018 elections in Iraq), will have more cards to play in Baghdad.

In this polarized scenario, the lack of a unified position among the Gulf monarchies against Iran is especially telling. Kuwait, Oman, Qatar (still under boycott) and Dubai, albeit in a more nuanced way, all have reservations about the harsh position taken against Teheran by the Saudis, Abu Dhabi and Bahrain. Smaller Gulf states economic ties with Iran are generally strong. For example, the UAE (mostly Dubai, Iran’s traditional re-export hub) and Oman both saw trade volumes with Iran grow significantly in 2016-17. Iran has also been a crucial support for Qatar in evading its neighbours’ embargo, launched in June 2017. Doha  recently hosted the Iranian-Qatari economic committee, which aims to boost bilateral investment. The division among the Gulf monarchies on Teheran and only serves to undermine Washington’s regional goals.

At the international level, Trump’s decision on Iran looks like a gift to non-Western powers. China and India will continue to buy Iranian oil and build critical infrastructure there, while European countries will struggle to evade the United States’ secondary sanctions. Beijing is already Iran’s largest market for exported oil. New Delhi announced that commercial exchanges with Iran will continue, despite the US sanctions (in 2016-17, bilateral trade between India and Iran reached US$12.9 billion). Regarding Russia, Moscow is not only a prominent economic partner for Teheran, but it also represents a key geopolitical partner in the Middle East and an invaluable ally in Syria.

Iran’s economy is further shifting towards the East. On 9-10 June, China will host President Rouhani at a summit of the Shanghai Cooperation Organization (SCO), a Beijing-led forum encompassing Russia, four Central Asian republics, India, Pakistan. Iran is an SCO observer. Moreover, the uneasy future of France’s role in Iran’s South Pars gas field project (a Chinese, French and Iranian joint-venture) testifies to this trend. Due to Washington’s secondary sanctions, the France’s Total could be forced to withdraw from the South Pars agreement, allowing China (with a current stake of 30%) to purchase Total’s investment (currently 50.1%) to become the dominant shareholder.

Finally, transatlantic relations are likely to pay a heavy price for Donald Trump’s decision on Iran. Withdrawal from the Iranian nuclear deal speaks volumes about the current administration’s position on its traditional alliances. As Vittorio Emanuele Parsi, professor of International Relations at the Catholic University of Milan, has noted in his latest book Titanic. Il naufragio dell’ordine liberale (Il Mulino, 2018), in Trump’s neo-isolationist strategy, which rejects multilateralism, “allies and rivals do not exist but only, indistinctly, foreigners (aliens) and disloyal competitors” (p.149, author’s translation).

 

Despite the Trump administration’s “America first” rhetoric, withdrawal from the JCPOA could paradoxically see the US drawn much more into the risky environment of Middle Eastern security, in an escalation of tensions with Iran. This would be the direct consequence of political choices that maximize geopolitical conflict, draw a new divide with traditional European allies and offer unexpected gifts to international rivals.

AFP PHOTO / ATTA KENARE