June 09, 2019

Trump Waffling on Iran

Timothy Birdnow

Trump's caving on Iran.

First, the President issued a list of demands for meeting with the Iranians, and now Sec. of State Mike Pompeo is offering to meet with them without any preconditions.

Regime change also seems to be off the table.

And then there is this:

Trump also seems to be softening the policy on Iranian oil exports. In April, the administration announced that it would not extend any waivers on countries buying Iranian oil, a move intended to take Iran’s exports down to zero, as long promised. "The policy of zero Iranian imports originated with Secretary Pompeo,” a senior State Department official told the Washington Post in April. "He has executed this policy in tight coordination with the president every step of the way. Because the conditions to not grant any more [waivers] have now been met, we can now announce zero imports.”

However, there are some cracks forming in that policy. According to the Wall Street Journal, the U.S. will allow some countries to continue to import oil from Iran, essentially under their old waiver allotments. As long as they do not breach the ceiling they were granted under the original waivers, the U.S. won’t crack down, the WSJ said.

"So once people have reached that cap of what was negotiated….that then would be the limit of the oil that we would permit to move through that would not be sanctioned,” Brian Hook, the U.S. Special Representative for Iran, said in a telephone briefing on Thursday with reporters. "We will sanction any efforts to import Iranian crude oil beyond the limits that were negotiated in the period that ran from November through May.”

Trump officials said no to an extension of waivers in April, but the comments from Hook sounds a lot like a waiver extension—even if the administration does not want to call it as such. Hook’s comments to the press raised more questions than answers. Later, he clarified, saying that any oil that was purchased and/or in transit before the expiration of waivers on May 2 would be allowed. Anything after, would not. So, maybe no extension after all?

The oil embargo is everything here; without it we have absolutely no leverage against Iran, a country we have never traded with in any major capacity since the 1979 revolution that kicked the Shah out and imposed the Islamic Regime. It has been oil profits that have allowed the Mullahs to underwrite terrorism against Irsael (and us) for decades. We've let them do this for a long time out of fear of rising oil prices. But America is now a net exporter of oil, and holds larger reserves than Saudi Arabia thanks to hydraulic fracturing, and the balance of power has shifted; we no longer need Iranian oil so desperately America can ramp up oil production to cover what is lacking. Trump is the first President to really have a handle on this tool, but he's waffling now. Why?

The confusing strategy from the White House notwithstanding, the U.S. has pulled back from the brink in the last two weeks. Trump does not seem to want a military conflict, even if he is in favor of the "maximum pressure” campaign. If there is any discernible foreign policy strategy from Trump, it is the pursuit of some high-profile "deal,” however vaguely defined. His image of a deal does not always conform to that of the U.S. foreign policy establishment, which leads to confusion and mixed signals.

Still, as he has with North Korea, he tends to allow conflict to escalate to the brink of war, then he abruptly calls for a deal. It’s too soon to say whether or not that will occur this time around, but Trump is now highlighting his desire for negotiation, whereas up until recently he allowed John Bolton to pursue a more aggressive tact. "I really believe that Iran would like to make a deal, and I think that’s very smart of them, and I think that’s a possibility to happen,” Trump said in Japan last week. In early May, Trump told reporters "What I’d like to see with Iran, I’d like to see them call me.”

Iran isn’t simply going to pick up the phone because Trump wants to chat, not after getting hammered by crippling sanctions. And certainly not after inking a sweeping deal with Trump’s predecessor, only to see it torn up. Anyone at all familiar with the history of U.S.-Iran relations would not bet on Iran rolling over. Instead, most political factions in Tehran tend to close ranks in the face of American pressure.

End excerpt

That is basic negotiations; carrot and stick. Foggy Bottom doesn't understand the business way of negotiating, and they are not doing a good job of it. (When have they ever?) But one must ask what Trump is accomplishing by backing off the sanctions right now.

Iran has two cards; oil and Russia. Russia is an ally mainly because of the oil, which has been Putin's tool to squeeze Europe. I suspect that is what has Trump waffling now; European allies have been looking to Russia to get oil and gas, and Trump realizes he's losing support from them, a support that has always been tepid.

Frankly, Trump needs a major foreign policy success at this point. Iran, North Korea, and Venezuela are all trying to wait Trump out, to see if he loses in 2020 or is rendered impotent by Democratic control of Congress. EVERYTHING hinges on the next election.

Which means the future of our world hinges on it. Iran is moving inexorably to a nuclear weapon, and they'll have one soon enough if we can't stop them. That will change the balance of power in the Middle East and mortally imperil our ally, Israel. It will mean that Venezuela's future depends on the election the Venezuelan military is going to decide who to support depending on what happens here. It means North Korea will have a decision to make. And of course it mean everything to America.

I hope and pray Trump knows what he is doing here. He needs an overarching strategy, one that will give him a victory, a big one. A major foreign relations victory will do wonders in helping to push him over the top next year.

The article concludes:

The irony is that Trump’s trade war with China (and soon, Mexico) is cratering the oil market as demand could take a hit. That actually gives Trump more room to tighten the screws on Iranian oil exports. Oil market tightness—and high prices—forced the U.S. to repeatedly back off in the past year. With recession fears setting in, there could be plenty of slack in the market, allowing Trump to pursue the zero-export policy. It’s just not clear how far his administration wants to go.
The peace and security of the whole world depends on the next twelve months.

Posted by: Timothy Birdnow at 10:35 AM | Comments (2) | Add Comment
Post contains 1157 words, total size 8 kb.

1 Trump is not caving in to Iran regarding oil, and our oil resources have nothing to do with it. We have not imported oil from Iran since 1979. Trump is caving in to the EU on Iranian oil, since the EU is not about to submit to Trump's demand that they stop importing Iranian oil.

Posted by: Bill H at June 09, 2019 11:07 AM (vMiSr)

2 Bill, you are correct, in that we don't and haven't imported Iranian oil since the revolution. I was not saying we did. But the oil market is influenced by all sources and certainly the world price of oil rises when we boycott a major oil producer. You are absolutely correct as this is a sop to the Euroweenies.

Our oil matters insofar as we can now ramp up production to minimize the shock to oil prices.

Thanks for a thoughtful and informative comment. I should probably have been clearer in my original piece.

Posted by: Timothy Birdnow at June 09, 2019 11:19 AM (5wBMc)

Hide Comments | Add Comment

What colour is a green orange?

22kb generated in CPU 0.06, elapsed 0.2705 seconds.
37 queries taking 0.2515 seconds, 105 records returned.
Powered by Minx 1.1.6c-pink.