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An interesting angle on the Iran problem: induce high gasoline prices through a worldwide embargo

By See-Dubya  •  June 11, 2008 04:16 PM

This plan laid out in the NY Sun is worth thinking about:

Legislation is circulating in Congress, backed by the American Israel Public Affairs Committee, that would punish oil traders and transporters that sell refined gasoline to Iran. While the Islamic Republic is one of the world’s leading exporters of crude petroleum, the country lacks the refining capacity to turn an estimated 40% of its crude oil into gasoline. Earlier this year, the country saw gas riots after President Ahmadinejad tried to impose gasoline rationing.

Supposedly we could get some international support for this plan, and it looks like Germany is on board. (Good, none of those vast German oil reserves will be headed to Tehran!) It is one of Iran’s weakest spots, and it might give us leverage over their nuclear program if we exploit it. And if they get really persnickety, things could start happening at their few fragile refineries.

How would Iran respond?

Mr. Kirk said that he anticipated the Iranians might respond to his plan by cutting off all petroleum production in protest. “The mullahs have said if you quarantine gasoline sales, they will suspend the sale of oil, but then the Iranian economy implodes even more quickly,” Mr. Kirk said. “The markets would look then to the swing producers, particularly Saudi Arabia, to see if they would make up the difference. I think a lot of countries would make up the difference. Remember there is no love lost between the Arab kingdoms and Iran.”

The Sun suggests that the price of oil would go up even more as a result of Iran’s retaliation. But wouldn’t that be mitigated by lower gasoline prices? Since the world’s refineries could no longer sell gasoline to Iran, it would effectively increase the available supply worldwide and therefore drop the price. Right?

It is an interesting idea and I like to see innovative solutions being proposed, especially peaceful ones. That said, are some flaws in the plan:

I. Sanctions don’t really work all that well against autocracies. (Sanctions helped pressure South Africa to remove apartheid, which though abominably segregated was susceptible to pressure from its white citizens.) There’s a legitimate use for sanctions in international policy–they work to impoverish and cripple adversaries and keep them from getting too powerful–and a moral case can be built for them as well. But they didn’t knock Saddam out of power, and they haven’t brought Castro or Kim Jong Il low.

In countries like those, the leaders are a little more comfortable saying to protesters “Oh, you want gasoline? Here, have some napalm.” Iran’s government is brutal and they have pretty well insulated themselves from the power of protest. The mullahs would increase their power domestically by rationing gasoline out and make a tidy profit. They control the means of distribution.

II. Speaking of Saddam: remember the U.N. Sanctions against Iraq, and how they were killing three bajillion Iraqi children a day? Creeps like George Galloway and their media enablers would be only too happy to stir up opinion against the evil U.S. policy of blockading Iran, and look at the children starving because there is not enough fuel to start the tractors and plow the fields, yadda, yadda…

…at which point humanitarian relief is proposed, and a trickle of gasoline (just to power ambulances, combines, and school buses, mind you, never anything military, perish the thought) is allowed through. If that sounds familiar, that’s exactly what happened with Oil for Food (except that was oil exports instead of gas imports; the sales were supposed to go to humanitarian aid). Saddam began using his allowances of relief oil exports to buy influence around the globe. What guarantee do we have that this won’t turn into Oil-for-Food II: Petrol for Plutonium?

This isn’t a serious objection to the plan as it stands, but it is possibility I’d like to know is being guarded against.

III. There are ways around a sales embargo or even a blockade. Who’s going to police this? Again, Oil-for-Food shows how difficult it is to keep sanctions working effectively. Even if there weren’t a U.N. Bureaucracy to corrupt, what makes us think that, some oilman in the Emirates or some Gazprom heavy or a TotalFinaElf suit isn’t going to try to sneak them some go-juice for a tidy profit? You just raised their incentives to do so. It could end up enriching criminals as well as the mullahs.

I don’t see this working at all without the U.S. Navy enforcing a blockade–which is not part of the plan–and that could get ugly real quick.

IV. I’m afraid this is a fairy-tale substitute for a real plan to change the situation in Iran. It probably won’t hurt things, but it distracts us from actually changing the regime, breaking their sponsorship of worldwide terrorism and ending their nuclear nightmare.

It makes a hell of a lot more sense than subsidizing a nuclear program for Saudi Arabia, but I put this proposal in the same category with the much-vaunted idea of working with domestic opposition groups who will magically overthrow the government some day. (Yeah, engineer a coup. That always works out well for us.) Each may be a useful instrument of policy, but we are deluding ourselves if we think this will clamp the brakes on the mullahs.

As I said last year, in response to the Burmese repression, Iran’s grip is too strong, and their Orwell Machines are too good:

I’m sure the opposition activists are extremely brave, and extremely smart. They may even be well-trained. They will be invaluable in providing intelligence and other support to our efforts to de-fang the mullahs and harass them behind their lines. I wish them well and long-term success, and I believe we may see a democratic Iran in my lifetime. But if the activists start something in Iran today or tomorrow, they’re as doomed as these Burmese monks were.

Burma’s atrocities affect us very little. On the other hand, our own security is at stake as long as the Islamic Republic’s centrifuges turn. We could trust a Bay-of-Pigs type coup attempt to stop them, or we can make sure the job is done right and that Iran’s nuclear program, along with its gasoline refinery, its navy, and its air force are disassembled. And at the same time, just as importantly, the Islamic Republic’s Orwell Machine must be smashed. …

Only then will democracy activists in Iran have any chance to gain a foothold. Even then I’m not optimistic, because of the anti-U.S. resentment that will accompany an attack, but they’re going to have a lot more success in getting their word out while the Pasdaran are busy digging themselves out of their smoldering bunkers.

In other words I no longer see regime change in Iran as a realistic short-term goal. I see regime crippling in Iran as a crucial short-term goal, as a result of which regime change might occur over the long term. But it seems clear to me that regime change can’t happen while the Orwell machine still hums in Tehran.

So: embargo their gas if you think it will buy us time, or weaken Iran’s military. But don’t pretend that this is a policy which, by itself, will make us any safer.


{Post by See-Dub.}

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