Nightmare of a US-Iran war, oil prices may soar to US$ 250 a barrel

hen the United States president Donald Trump on Monday said in yet another quirky tweet that he was ready to meet the Iranian leader, the announcement generated hardly any vibe to arouse the excitement of the international community. 

Iran is not averse to Trump’s suggestion for a summit meeting, but it is firm in its insistence that the US should return to the nuclear deal and lift sanctions. 

Trump during a White House media briefing on Monday said he would meet Iranian President Hassan Rouhani without preconditions. “They want to meet, I’ll meet. Anytime they want,” he said, adding, “It’s good for the country, good for them, good for us, and good for the world. No preconditions. If they want to meet, I’ll meet.”

Compare this statement with the one that led to the historic meeting between the US President and the North Korean leader in June this year. A lot of homework had been done, the consequences meticulously assessed and secret contacts established with Pyongyang before Trump’s meeting with Kim Jong-un was made public. And there was much for both sides to gain from the meeting promoted as a win-win summit by Trump supporters. Of course, Trump’s bold move pushed his popularity ratings up by several notches. For North Korean leader Kim, the summit offered a platform to showcase his impoverished but nuclear-armed nation as a world power on par with the US, though the reality is far from that. 

But with regard to Iran, instead of enthusiasm on the part of the US, what is evident is callousness or political dishonesty. For, Trump’s offer amounted to a call for surrender to Iran and it smacked of the United States’ utter contempt for the Persian Gulf nation.  Please note that the offer came just days after the maverick US President held out a threat of an all-out war against Iran, following Iranian President Rouhani’s warning of a ‘mother of all wars’. 

Trump’s tweet in all caps read: “To Iranian President Rouhani: Never, Ever Threaten The United States Again Or You Will Suffer Consequences The Likes Of Which Few Throughout History Have Ever Suffered Before. We Are No Longer A Country That Will Stand For Your Demented Words Of Violence & Death. Be Cautious!”

True, he issued similar threats against North Korea even weeks before the June summit in Singapore. Trump ridiculed Kim as “Little Rocket Man’ and threatened him with the same fate Libya’s Muammar Gaddafi faced if the North Korean leader did not dismantle the nuclear programme.

Unlike North Korea, Iran is not a nuclear power. Iran cannot afford the luxury of upping the ante without the risk of precipitating a war with the US. Unlike North Korea whose nuclear weapons forced the US to set aside its superpower pride and meet Kim, Iran has no such trump cards. But it is not without its options, which, it has said, it will not hesitate to unleash if pushed to a corner.
The present crisis is not Iran’s making. It was triggered by Trump’s announcement in May of the US withdrawal from the 2015 seven-nation nuclear deal.  The agreement, signed by the US, China, Russia, France, Britain, Germany and Iran, during US President’s Barack Obama’s second term in office, sought to curtail Teheran’s ability to develop weapons grade nuclear material. The US pullout from the deal despite pleas from its European allies, paved the way for the re-imposition of tough US sanctions which target Iran’s trade in gold, its energy, shipping and insurance sectors and the transactions of its central bank.  The purpose was to deny Iran the much needed oil revenue to build up the economy after years of crippling United Nations and US sanctions. 

Trump, who cherishes undoing what President Obama has done, wants the agreement renegotiated to curb Iran’s missiles programmes and involvement in regional conflicts. In other words, he wants to see a militarily weakened Iran.

It appears that he is making the demand on behalf of Israel and Saudi Arabia. The two US allies have been uncomfortable with Iran’s increasing influence in the region, especially in Iraq, Syria, Lebanon and Yemen. 

The new US sanctions which will come into effect in November have already put Iran in an economic depression, as a result of which signs of growing unrest are already visible. Therefore, the government is desperate to take all measures necessary to overcome the crisis. 

The other signatories to the Iran deal have said they would honour the agreement, but analysts believe that it is only a matter of time before the European nations and their big companies will crumble under pressure and stop trading with Iran, as they do not want to lose the much bigger US market. 

It was against this backdrop that President Rouhani warned that if the US took measures to destroy Iran’s economy and thereby effect a regime change, it risked unleashing “the mother of all wars.”

In yet another warning, Iran’s leaders have said that if the country was denied its right to sell oil and improve its economy, then it may even impose a blockade of the Straits of Hormuz, through which a third of the world’s sea-borne oil passes every day. If this happens, analysts say world oil prices could shoot up to US$ 250 a barrel -- a nightmarish situation which could ruin world economies and bring about untold hardships to the people in poor countries.

Of course, the US Defence Department has said its navy is capable of ensuring the freedom of navigation in the strait. But when Iran imposed a similar blockade during the nine-year Iran-Iraq war in the 1980s, the US could only take limited military action against Iran. During the blockade, Iranian attacks on tankers carrying Iraqi oil catapulted the oil prices to a new peak since the 1973 Arab oil boycott against the US.

Washington and Teheran, throughout post-World War history, have been friends at times, foes at times, and foes and friends at the same time.  In 1953, the US engineered a coup in Iran to overthrow the democratically elected government of Mohammad Mosaddeq and instal the puppet Shah.  A quarter century later, the 1979 Islamic revolution ousted the pro-American Shah and set up the Islamic Republic.  Since then relations have plummeted to the lowest level following a series of development such as the Iranian students’ siege on the US embassy in Teheran, the Lebanese civil war and the United States’ outright support for Iraq during the nine-year Iran-Iraq war, during which Washington failed to condemn Iraq’s use of chemical weapons. But the highpoint was when a hostile US during the Ronald Reagan Presidency in the late 1980s arranged Iran to buy weapons from Israel and the profits were diverted to the Contra rebels fighting Nicaragua’s socialist government.  The secret programme was called the Iran-Contra affair.

Given Trump’s unpredictability, it won’t be a surprise if he pulls out a surprise by meeting Iran halfway despite his commitments to Israel and Saudi Arabia, so that he could boast of producing an Iran deal much better than what Obama had signed.  Will Iran agree? However, the international community should redouble its efforts to bring about a win-win solution and avert the possibility of a US-Iran military confrontation which could only spell further doom for the world economy in general and poor nations in particular.