on geopolitics

May 20, 2019 | 05:30 GMT

11 mins read

Where Does Iran Fit in a World Defined by Great Power Competition?

VP of Global Analysis, Stratfor
Reva Goujon
VP of Global Analysis, Stratfor
Iranian Foreign Minister Javad Zarif and Chinese Foreign Minister Wang Yi meet in Beijing on May 17, 2019.
(THOMAS PETER/AFP/Getty Images)
Highlights
  • A U.S. strategy to either coerce Iran to the negotiating table or trigger an uprising against the Iranian government is not only fraught with faulty assumptions, but it also threatens to undermine the United States in an escalating great power competition with China and Russia and tip the global economy into recession.
  • The prospect of another Mideast war that bogs down the United States and drives up energy prices is a net benefit to Russia, which will find multiple ways to leverage a U.S.-Iran conflict.
  • North Korea could also choose to more aggressively pursue its nuclear program, raising the specter of twin crises to try and break the impasse in its own negotiation with the United States.
  • China, already in an intensifying tariff and tech battle with the United States, and Europe, where the Continent's major economies are facing significant headwinds, can ill afford the economic shock that would come with a disruption to the world's most vital oil artery.

In the course of just two weeks, the White House broke a tariff cease-fire and escalated its tech war with China, North Korea conducted a pair of short-range ballistic missile tests, the United States seized a North Korean vessel, Tehran announced it would stop complying with parts of the Iran nuclear deal, four oil tankers were allegedly attacked near the energy-vital Strait of Hormuz, a major Saudi pipeline was hit by a drone flown by Yemen's Houthi rebels and the United States evacuated nonessential personnel from Iraq in reaction to intelligence threats of Iranian attacks against U.S. targets.

When things are moving this fast, it becomes all the more important to take pause and reevaluate the intent of the main players on the world stage to figure out where we're heading.

The Big Picture

Iranian countermoves to U.S. sanctions pressure are setting up multiple triggers for a potential military conflict between the United States and Iran. But another Mideast war, which could easily eclipse the destruction that came with the (still active) Iraq war, threatens to cloud the United States' focus and monopolize U.S. military bandwidth at a time when great power competition is already demanding Washington's full attention.

The Iran Spiral

The White House strategy for Iran is fairly straightforward: Discredit the Iran nuclear deal, expand and enforce sanctions to cripple the Iranian economy, lay the groundwork for widespread unrest and apply economic and military pressure to coerce the Iranian government to the negotiating table. If the regime topples under internal pressure, consider it a bonus prize.

The strategy is laden with problematic assumptions.

Tehran is facing serious economic duress, but, to use Iranian Foreign Minister Javad Zarif's phrase, Iran has a Ph.D. in evading sanctions. The Iranian security apparatus has a strong track record in quashing protests, and sanctions-driven unrest may have a better chance at whipping up nationalist fervor than it does at triggering a countrywide uprising. And while there's a chance that Iran will try to keep a back channel to the United States open to mitigate war tensions, Iran will plan on riding out the economic storm and await the results of the U.S. 2020 presidential election in hopes of negotiating with a less hawkish administration.

Iran is also not going to sit on its hands while getting pummeled with sanctions. In fact, the recent oil tanker incident and drone strikes on Saudi oil pumping stations may reveal a concerted effort by Tehran to telegraph a potent message that any war with Iran will come at the cost of disrupting energy shipping traffic through the most vital oil artery in the world. (There is also the possibility that the Houthis are operating more autonomously or that there is a disconnect in command and control between Iran's more moderate presidency and hard-line elements of the Islamic Revolutionary Guard Corps, though so far there has not been any credible signs of deep strain within the Iranian establishment.)

If an Iranian hand in these attacks is proved, it's an incredibly bold move: Rather than more subtle and covert means of incrementally pushing back against the United States, these actions not only are just enough to raise the specter of wider devastation but for some members of the White House they may be just enough to qualify as a trigger for military strikes.

Iran has demonstrated its proxy prowess in Iraq, Syria and Yemen. Imagine the militant force it would bring to bear in defending its own soil.

Even a U.S. plan for limited strikes against Iranian proxy targets in the region or sensitive nuclear and military sites in Iran itself would have to come with a contingency plan for a wider military escalation (hence, the recent hyper-speculation over leaks from a U.S. national security meeting that allegedly discussed a plan to send 120,000 troops to the region). The world has already witnessed Iran's militant proxy prowess in Iraq and the Syrian and Yemen civil wars; just imagine the militant force Iran would bring to bear in defending its own soil. And while Israel, Saudi Arabia and the United Arab Emirates may share an interest in weakening Iran as much as possible while U.S. President Donald Trump is in office, they are also prime targets for Iranian retaliation. The United Arab Emirates, in particular, is unlikely willing to stomach the economic cost of going to war with Iran.

Russia Reviews Its Options

With war tensions ratcheting up over Iran, U.S. Secretary of State Mike Pompeo naturally needed to get some face time with Russian President Vladimir Putin. The U.S. message to Russia is also clear: Stay out of our way. But noninterference does not come easy from Moscow and Russia has options to get the most out of an Iran crisis. Despite a closer connection with the Trump White House, the Kremlin is still caught in a thick U.S. sanctions net and is in the midst of an escalating arms race with the United States. As the only great power security ally of Iran, Russia could beef up Iranian air defenses and perhaps send its own military personnel and nuclear technicians to Iranian facilities. This is a tried-and-true obstruction play from the Russian handbook designed to raise the cost of U.S. military action and build leverage in a negotiation with Washington. The same play is in motion in Venezuela, where Russia has sent a handful of forces and is threatening to send more amid U.S. threats of military intervention. Even if Russian obstructionist acts in Iran fail to deter U.S. military action, Russia is not going to complain if the United States voluntarily embroils itself in another Mideast quagmire that creates another big windfall in oil revenue for Russia. After all, it was during the United States' exhausting wars in Afghanistan and Iraq that Russia gained the geopolitical space to reassert itself in its former Soviet periphery.

The Chinese Game of Chicken

China, too, would derive some strategic benefit from a massive U.S. distraction, but China as a net energy importer is far more vulnerable to the economic shocks that would come with a major disruption to energy transit in the Middle East. After a major relapse in the U.S.-China trade negotiation, the Trump White House has given Beijing a narrow, monthlong window to come back to the table or face tariffs on all Chinese goods entering the United States. At the same time, the White House has chosen to significantly escalate its technological war with China by blacklisting Huawei and severely curtailing its access to U.S. tech suppliers. This is a game of political chicken, as Beijing tries to assess whether the White House will risk the political cost of tariffs and trade retaliation weighing on the average American consumer in an election season and as the Trump White House tries to test its theory that there are limits to Chinese stimulus and that Beijing won't be able to handle the economic pain of an all-out, extended trade war. While there is still room for the two economic giants to return to another tariff cease-fire, the global disruption stemming from the U.S.-China tech competition is only bound to escalate and a potential military escalation in the Persian Gulf would quickly short-circuit an already tepid global economic recovery.

European Paralysis

That economic risk is the last thing Europe wants when prolonged Brexit uncertainty, ballooning Italian debt and an escalating trade battle over U.S. auto tariffs are already sapping eurozone growth. There is also little that Europe can do to deter U.S. actions. The Europeans notably created a new channel to maintain non-dollar trade with Iran, but it is limited to humanitarian trade and does little in the end to assuage major European companies and banks that remain leery of U.S. secondary sanctions. While there is always potential for exasperated European powers to team up with China to put more heft into a sanctions circumvention strategy, aggressive moves by Iran to counter the United States, a shared European interest with the United States to hold China accountable for its trade abuses and deep divisions between U.S.-skeptics in Europe's west and the Euroskeptics of the east in search of American security guarantees will altogether hamper European attempts to stand up to the United States.

North Korea Hangs Out

The prospect of another U.S. war in the Middle East would be welcomed by Pyongyang. The United States can only seriously entertain a military conflict with Iran if it can be confident that there won't be a need for military options in Northeast Asia. Every Trump tweet downplaying a North Korean short-range missile test confirms to Pyongyang that the American president is intent on claiming North Korea as a diplomatic victory and the living proof that "maximum pressure" will get problematic pariahs to the negotiating table. Ideally, North Korea would like to get the most out of a Trump presidency before a window narrows for sanctions relief and while an anxious South Korea is trying to keep Pyongyang engaged. North Korea's recent missile tests are designed to remind the White House to not take Pyongyang's diplomatic containment for granted. Even if these provocations don't end up breaking the negotiation impasse, it benefits North Korea to drag out talks without fundamentally compromising its nuclear program. And if the United States ends up going to war despite Iran's earlier commitment to curb its nuclear program, that may harden Pyongyang's resolve all the more to hold onto its nukes.

Venezuela Tries to Fly Below the Radar

Depending on the week, Venezuela can climb or fall on the lengthy list of U.S. foreign policy priorities. As recently evidenced by the large number of no-shows by Venezuelan military commanders to opposition leader Juan Guaido's April coup attempt, amnesty promises are (so far) not convincing enough for a number of military leaders facing the threat of U.S. extradition to flip sides. That calculus could shift as Venezuelan oil production — and the government's primary economic engine to maintain military support — is plummeting under sanctions pressure. More recent production estimates range from 175,000 to 550,000 barrels per day, down from a daily average of 770,000 barrels in April. As the White House tries to keep its focus on Iran, there's little reason for it to attempt a military intervention in Venezuela at this stage. The sanctions are working perhaps better than the White House even anticipated and the United States has more economic firepower in reserve in the form of secondary sanctions.

Venezuelan President Nicolas Maduro may try to move quickly to arrest Guaido and handicap a U.S.-led strategy for regime change while the White House is preoccupied with Iran. This is also a good time for Maduro to request Russian reinforcements and open up a channel for negotiations to buy more time. Even if Maduro can manage to hang on for a bit longer, Venezuela is nonetheless facing the prospect of an extraordinarily messy political transition, a physical struggle over economic assets and a refugee crisis with regional ramifications. The United States can try to put its Venezuela strategy on autopilot for now while focusing on Iran, but Venezuela is still a distraction in the United States' own backyard that will continue to vie for the White House's attention.

The economic drive, military focus and diplomatic craft required to compete at the level of great powers do not leave much room for hangovers from the global war on terrorism.

Putting Iran in the Context of Great Power Competition

It makes little strategic or even political sense for the White House to risk a war with Iran at this stage. The United States has already been propelled into a great power competition with its Eurasian rivals, China and Russia. The economic drive, military focus and diplomatic craft required to compete at the level of great powers do not leave much room for hangovers from the global war on terrorism. And while Iran is a big ideological target of the United States, Trump also campaigned on a pledge that he would end costly wars in the Islamic world (including in Afghanistan, now the longest war in American history) and return to focusing on priorities at home. A war that risks spiraling into another costly military endeavor and tips the world into recession would not play well in a 2020 political campaign. Perhaps this is why, interspersed with multiple war signals over the past week, there have also been multiple leaks and quotes by Trump emphatically declaring that he does not want war. But at this stage of the conflict, that's more like throwing a massive arsenal of fireworks at a brushfire and saying, to use the commander-in-chief's favorite phrase, "we'll see what happens."

Reva Goujon is a leading global strategic analyst who keeps her finger on the pulse of emerging trends across the world. Ms. Goujon leads Stratfor's team of analysts and plays an integral role in applying a forward-looking, strategic lens to Stratfor's coverage of global events. She is also a prominent speaker, regularly addressing executives and investors at events across the world in a variety of industries, including energy, finance, commercial real estate and agriculture.

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