Showdown in the Arabian Gulf

Deployment of aircraft carrier battle group and B-52 bombers demonstrates unmistaken U.S. resolve.

During his presidential run, Donald Trump argued that the Joint Comprehensive Plan of Action, colloquially known as the Iran deal, was among the worst deals ever negotiated by the United States with a foreign power and promised to withdraw from the JCPOA if elected. In May 2018, Trump kept his word but granted waivers to eight countries to continue purchasing Iranian oil. In May 2019 those waivers expired, further constricting Iran’s ability to export oil.

Sanctions instantly affected all aspects of the Iranian economy including its banking sector. The U.S. Treasury Department succeeded in disconnecting Iran’s banking industry from the Society for Worldwide Interbank Financial Telecommunication (SWIFT). SWIFT enables banks to communicate with each other and facilitates international transactions. Even if rogue nations, like Turkey, attempted to skirt sanctions and purchase Iranian contraband, it would be nearly impossible for Iran to receive payment given its cutoff from SWIFT.

Iran’s economy is contracting and its currency is in freefall. It is estimated that the ban on oil exports alone is costing the regime some $35 billion a year and that’s before the expiration of the waivers. In April, the U.S. declared the IRGC a Foreign Terrorist Organization (FTO) and this past week, the U.S. Treasury Department slapped sanctions on Iran’s industrial metals industry.

While the Europeans are technically still signatories to the JCPOA, European nations are fleeing Iran like rats from a sinking ship, opting to forgo business in the Islamic Republic rather than face the wrath of U.S. sanctions. Contrary to Democrats’ assertions, the economic pressures imposed by the Trump administration are not meant to effectuate regime change. Rather, they are designed to modify malign Iranian behavior and bring them back to the negotiating table for the purpose of modifying and altering certain deleterious provisions of the JCPOA, including absurd sunset clauses that allow Iran to enrich uranium 10 years post the signing of the JCPOA. The administration would also like curb Iranian ballistic missile development, something the Obama administration failed to adequately address.  

Trump has made diplomatic overtures to the Iranians making clear to them that the U.S. does not seek confrontation and is willing to deal but Iran has adopted an inflexible, hostile-like posture. Last week, four commercial ships – two Saudi, one Norwegian and one United Arab Emirate flagged ship – were sabotaged near the Emirate port of Fujairah, which is located near the Gulf of Oman and the Strait of Hormuz prompting a 2% spike in the price of crude oil. Twenty percent of the world’s traded oil transits the Strait of Hormuz. No one is saying who carried out the sabotage but many are suggesting an Iranian fingerprint.

Iranian-backed Houthi rebels also attacked Saudi state-run Aramco oil installations with drones causing significant damage and disruption. The Saudis retaliated with airstrikes on Houthi-based targets in Yemen.

In a sign of growing tension, the U.S. ordered all non-essential U.S. personnel out of Iraq. The move was prompted by intelligence pointing toward an imminent Iranian attack using proxy groups based in Iraq. Intelligence sources noted that Qassem Suleimani, the head of Iran’s Quds Force, the branch responsible for Iran’s overseas mischief-making, recently held a meeting with various Iraqi Shia militia heads informing them to prepare for hostilities.

In addition, Israeli intelligence informed its counterparts in the U.S that the Iranians were preparing a missile strike. U.S intelligence sources also believe that the Iranians have loaded fully assembled missiles on to small naval craft possibly in anticipation of a direct strike against the U.S. or its Gulf allies or an indirect strike using proxies.

These and other hostile actions taken by the Iranians prompted the U.S. to deploy substantial military assets to the theater of operations including B-52H Stratofortress bombers, an aircraft carrier strike group, Patriot missile batteries and an amphibious transport dock. The B-52s, which are at Al Udeid Air Base in Qatar, have already begun flying deterrence sorties alongside F-35A Lightening IIs and F-15C Eagles.

Iran is sending mixed signals. Its so-called Supreme Leader and dissembler in chief, Ayatollah Khamenei, stated that he is not seeking war with the U.S.  “There won't be any war,” Khamenei was quoted as saying by Iran’s state-run media. “We don't seek a war, and they don't either. They know it’s not in their interests.” But the following day, Iran’s Revolutionary Guard Corps commander, Major General Hossein Salami, stated that Iran was “on the cusp of a full-scale confrontation with the enemy.”

It is unlikely that Iran will attack the U.S. directly though this possibility certainly cannot be discounted. Rather, if Iran does strike, it will likely make use of its proxies, like the Houthis of Yemen, Hezbollah or one of a slew of Iraqi Shia militia groups. Iran has also threatened on numerous occasions to close the Strait of Hormuz to international shipping though they are cognizant that this would provoke an immediate and crushing U.S. response.

Clearly, the Iranians are suffering from devastating sanctions and increasing diplomatic isolation and that partially explains their erratic behavior and inconsistent public pronouncements. If the Iranians mount any aggression, they will surely lose in the face of overwhelming U.S. firepower. Iran has but one option; to return to the negotiating table and work out a new deal.  If they don’t, Iran’s economy will continue to shrink under the yoke of crushing sanctions, and this may ultimately lead to the collapse of the regime.