When it comes to stopping Iran's nuclear programme, the west has got it all wrongby Matthew Hulbert / March 28, 2012 / Leave a comment
The west is scrambling for energy resources. Above, a view from Rotterdam port. Photo: Clingendael International Energy Programme
The whole purpose of Iranian sanctions was to try and shift Tehran away from nuclear enrichment by applying intense economic pressures. We now find ourselves in a hydrocarbon crisis of our own making. In an attempt to prove the west could dig deeper than the theocratic regime in Tehran, sanctions were put in place to keep Persian oil away from international markets. The resulting oil price rises were considered “frivolous trivia” compared to the overriding political priority—stopping Iran going nuclear.
Alas, this is clearly no longer the case. Forget any fangled arguments about global economic health—the blunt fact is that the US fell at the first hurdle, when US petrol prices rose to $4 per-gallon—a figure unacceptable to American drivers. Instead of letting market forces play out, the US has bottled it, and is now leaning heavily on the Saudis to soften international oil prices; not to mention openly flaunting the International Energy Agency’s (IEA) strategic reserve to alleviate pressures on US consumers. And now, the US, UK, France and Japan are also discussing tapping into their own strategic reserves.
That might be ‘OK’ for short term American electioneering, but it’s absolutely ruinous for a serious containment policy on Iran. If the US were truly serious about preventing Iranian enrichment, it would be pursuing exactly the opposite policies. Prices would be allowed to rise; the IEA would keep reserves firmly under lock and key; and most importantly, the Saudis would be persuaded to withhold oil from global markets, and especially from China and India, to force Asian consumers to sever all Iranian hydrocarbon ties. Until Asian-Persian oil links are cut, Iran will find it very easy to keep counting down the nuclear clock.
Yet none of these policy options are in play, precisely because international priorities have come full circle on Iran. Nuclear containment by curbing Persian petroleum production is out—Washington is increasingly happy to let China and India keep sourcing the bulk of 3.3 million barrels per day (mb/d) of Iranian crude, all in the interest of keeping US oil prices at politically tolerable levels. If anything “homeland economic security” through quick fix measures for cheaper oil, has become Washington’s top priority. Increasing Saudi production is one approach they’re trying; IEA stock releases will be another.
Western policymakers therefore need to…