Sunday, March 25, 2012

Is The West Shooting Itself In The Foot With Iran Oil Sanctions?

Juan Cole describes a translation from a questionable web source, Javan, of the Iranian Revolutionary Guards, who claim there was a summit of intel analysts from the US (CIA), Israel (Mossad), UK (MI6), Germany (BND), and France (DSGE) on March 20 in Stockholm in which they supposedly discussed how Iran has gained $3 billion in revenues from the higher oil prices due to the sanctions against Iran, which supposedly have failed to reduce Iran's oil sales all that much, and of course are hurting the western oil-importing countries, .

One must suspect that even if the reported meeting took place and that the claims about what has been reported are at least somewhat accurate, that this may be a report intended to understate damage to the Iranian economy and an effort to discourage the sanctions. The issue seems to be Iranian inflation, which has almost certainly accelerated due to the substantial devaluation of the Iranian rial that has happened since the sanctions began being imposed. Indeed, the translation does not deny that this is the case. Rather it says that this does not matter politically or stategically in that the March 2 Majlis election has already passed with pro-Khamenei supporters winning solidly and with the Iranian public supposedly convinced that the increased inflation is strictly due to domestic causes. Even if they are not so convinced, there is reason to believe that the response of the Iranian public, even those critical of the government, is to be angry at outsiders for imposing the sanctions, with much past evidence to support such a view.

Another matter in the translation is that there was reportedly a split at the meeting, with the European nations criticizing the US and Israel, with the German BND being particularly incensed over the negative impact of rising oil prices induced by the sanctions. Supposedly it was decided that the UK should engage in an expanded propaganda effort in Iran to convince their public that the higher inflation there is caused by the sanctions (as if this will do much).

What should be noted here is that even if the report is seriously flawed, this fits in with an ongong theme of intel agencies in western countries being far less enamored of and supportive of the vigorous anti-nuclear-Iran efforts being pushed by most of the media and politicians. In the US, a solid majority believes Iran is actively pursuing a nuclear weapons program, even though all 16 US intel agencies in the latest NIE on this subject agree that Iran is not actively pursuing nuclear weapons (although it may be pursuing a potential capability to pursue them). Less reported than the NIE report is the fact that Israeli Mossad completely agrees with this assessment as well, even though the disjuncture with Israeli politicians is much greater than is the case currently in the US, with the Israeli leaders pushing for an attack, even against public opinion in Israel, which may be more negative on that than public opinion in the US.

Although it is possible that this report is simply bogus propaganda from the Iranians (and that no such meeting in Stockholm occurred or had very different results than reported), it remains that like most sanctions programs this one is probably not as damaging as many think and certainly does have a damaging feedback on the oil-importing countries still struggling to come out of the depths of the past recession, with these sanctions basically pointlessly directed at a nonexistent nuclear weapons program (and Iran's actual nuclear activities completely legal under the Nuclear Non-Proliferation Treaty of which it is a party).

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