Brian Hook, U.S. special representative for Iran, walks past fragments of Iranian short range ballistic missiles (Qiam) at the Iranian Materiel Display (IMD) at Joint Base Anacostia-Bolling, in Washington, Thursday Nov. 29, 2018.

Brian Hook, U.S. special representative for Iran, walks past fragments of Iranian short range ballistic missiles (Qiam) at the Iranian Materiel Display (IMD) at Joint Base Anacostia-Bolling, in Washington, Thursday Nov. 29, 2018. AP Photo/Carolyn Kaster

Trying to Kill the Iran Deal Could End Up Saving It

Trump administration officials are publicly united on their policy of punishing the Islamic Republic. But cracks are showing over just how far to go.

The Trump administration has made a priority of punishing and pressuring Iran. But the same administration that withdrew from the nuclear deal that President Donald Trump dubbed “a great embarrassment” may actually end up preserving it.

Iran and all the other signatories are still observing the deal’s terms for now. The U.S. reimposed sanctions on the Islamic Republic last fall, driving down its oil exports and further stressing its weak economy. But even as the administration pursues what it calls a “maximum pressure” campaign against the country, it has also made exceptions through sanctions waivers that have helped keep Iranian oil flowing and even preserved some international nuclear cooperation with the country.

Now, ahead of a key deadline in May, the administration is sending conflicting signals about just how far it plans to go to confront the regime. At issue, in part, is the stated intent to choke off Iran’s oil exports entirely and throttle its oil-dependent economy. Following through could mean fights with allies that import Iranian oil, or even a higher risk that Iran ditches the deal altogether and starts racing to a nuclear weapon. Backing off the promise could leave the deal limping along for a potential new president to reenter it, as the Democratic Party has called for.

While Trump-administration officials are all singing from the same hawkish hymnal about the march to zero exports, cracks are beginning to show. State Department officials say they are not “looking to grant” new waivers when the current round expires around May 4, but won’t comment on renewing existing ones; they hedge about getting to zero “as soon as possible” and the need to avoid disrupting oil markets. Representatives from the Department of Energy and the National Security Council (NSC) have meanwhile pointed to data showing that oil markets are well supplied enough to keep prices stable, even with the loss of Iranian crude. “We’re not very worried about it,” a Department of Energy spokesperson told me. “We think the market will balance itself out.”

Related: ‘Chaos Serves Putin’s Interest’: A Veteran Diplomat Takes Stock

Related: The Slender Path Back to the Iran Nuke Deal — and Away from War

Hawks in Congress seem to agree. “If our policy objective is zero, our policy should be doing its damnedest to get to zero,” one Republican congressional staffer familiar with the interagency discussions told me. “My sense is we’re not. There is hedging.” This person and another source familiar with the discussions said the disconnect is fueling an interagency argument between members of the State Department and the NSC as the deadline approaches. Asked for comment on the purported disagreement, a spokesperson for the NSC said, “The National Security Council coordinates closely across the interagency to apply maximum economic pressure against Iran.” A State Department spokesman also did not comment directly on the interagency disconnect, but offered a statement from Brian Hook, the U.S. special envoy for Iran, reiterating the policy to get to zero and noting that “we have already achieved significant reductions in Iran’s exports.”

There’s public unity, at any rate, about forcing change in Iran. Trump has directly threatened Iranian President Hassan Rouhani via tweet, vowing “CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE” should Rouhani threaten the United States. Secretary of State Mike Pompeo has vowed “unprecedented financial pressure on the Iranian regime.” National Security Adviser John Bolton has dubbed Iran the “central banker of terrorism” and noted, “That’s not behavior we should tolerate.” Hook said in his statement to The Atlantic that sanctions on Iran are “draining their resources to fund terrorism.”

Yet there’s also discord beneath the surface. Hook spent months negotiating with the Europeans to preserve a version of a deal that Trump would accept, only to have the president announce his withdrawal last May. At a recent conference in Warsaw, Vice President Mike Pence publicly demanded that the Europeans leave the deal, reportedly infuriating Pompeo, who has made no such demands.

Hook has consistently reiterated the zero-exports goal, but he also told a conference this week that Trump “doesn’t want to shock oil markets,” even as he acknowledged market surpluses. In a sign of the interagency disconnect, Richard Goldberg, director for countering Iranian weapons of mass destruction at the NSC, said, “The oil market is well supplied and can absorb the loss of Iranian crude,” speaking at the Foundation for Defense of Democracies last month. Projections from the Energy Information Administration released this week show the same thing, even accounting for losses of Venezuelan oil exports due to additional U.S. sanctions.

Trump’s exit from the Iran deal last year came with some caveats. The basic framework of the Joint Comprehensive Plan of Action (JCPOA), as the pact is formally known, was an exchange of economic incentives, including a suspension of past sanctions, for Iranian nuclear restraint. Ahead of reimposing sanctions on Iranian oil exports, though, Trump gave Iran’s trading partners about six months to make other arrangements, and bargained with Saudi Arabia to increase oil production to keep prices stable. But the idea was that any country still importing Iranian oil by that November would be sanctioned.

Iran’s exports began declining even before then, as countries fled the possibility of financial punishment. And even as Trump worried about prices, Energy Secretary Rick Perry was sanguine about the issue on the op-ed page of The Wall Street Journal: “The U.S. Energy Information Administration expects global oil supply to meet demand in 2019 even without Iranian oil.” So it was a surprise that the deadline came and Trump handed out some sanctions exceptions, including to China, Taiwan, India, and South Korea, granting them access to Iranian oil for another six months without penalty. The markets didn’t see it coming; oversupply resulted; prices dropped.

Over the period since Trump announced he was leaving the Iran deal, though, Iran’s oil exports have fallen by more than half, from more than 2.5 million barrels per day to about a million barrels per day. But neither Hook nor Pompeo will specify over what time period they hope to get to zero. Asked at an energy conference this week whether it was even possible to get there, Pompeo would only say, “I’m not going to get ahead of myself or ahead of the president, but make no mistake about it, that’s the direction of travel.”

Meanwhile, Reuters has reported that the United States is leaving the door open for waivers, even if at a reduced number. Japanese and South Korean officials have stated publicly that they’re seeking them; outside analysts have also suggested that China is a likely candidate, given how much Iranian oil it currently imports and its ongoing trade negotiations with the United States. Sources in India have told reporters that that country, too, is engaged in waiver negotiations with the U.S.

Hook is adamant that “maximum pressure” means just that. “The United States is not looking to grant any exceptions or waivers to our campaign of maximum economic pressure on the Iranian regime,” his statement said. “Our policy is to get to zero imports of Iranian crude as quickly as possible.”

But Hook’s comments about oil markets leave room for maneuver, and they echo concerns that Trump raised before granting oil-sanctions waivers last time. Leaving aside possible geopolitical or diplomatic reasons to grant waivers—say, to avoid having to sanction an ally such as South Korea, or to sweeten trade negotiations with China—the oil-prices rationale conflicts with the analyses of other agencies. Energy Department projections say the market has 2 million barrels per day of spare production capacity—more than enough to replace a million lost barrels of Iranian oil per day if needed. The price spike feared last fall has not come to pass. When the Energy Information Administration published its latest projections this past week, the price of oil was $64 a barrel—right about where it was this time last year, though oil prices fluctuate.  

“If you know the oil markets right now, you know that price is not a factor,” said Amos Hochstein, President Barack Obama’s international-energy special envoy, who managed Iran sanctions. By contrast, in the first two years of Iranian oil sanctions under Obama, he said oil prices were more than $100 a barrel.

Still, technical problems will complicate the push to zero Iranian exports. China, for example, is still importing roughly half a million barrels of Iranian oil per day. “It is difficult to sanction China on this issue,” Hochstein said. “They have financial institutions that can facilitate the oil trade that are not engaged in the U.S. financial market, and therefore [are] immune to sanctions.”

Separately, however, the administration has used sanctions waivers in other ways. At a conference in December, Christopher Ford, the assistant secretary of state for international security and nonproliferation, noted that even as the administration sought to sanction Iran to drive it to negotiate a better deal, they were seeking to preserve some international cooperation with Iran on things such as civil nuclear research and energy projects. The waivers basically prevent the Europeans from facing sanctions for participating in projects allowed under the deal. There, too, the effect, if not the intent, of the waivers could be to keep in place parts of the basic framework of the deal Trump vowed to eliminate.

“We don’t agree that we should have maximum pressure right now, considering that we want the Iranians to stay in the nuclear deal,” said a Democratic congressional aide. “But if you’re going to have maximum pressure, then waivers don’t work.”

Even if a Democrat won the White House in 2020, though, he or she might not think it wise to reenter the JCPOA as it currently stands. Robert Einhorn, who helped negotiate the nuclear deal in the Obama administration, noted that some key provisions would expire not long after a hypothetical Democrat took office in 2021. Besides, Iran is, according to the public assessment of the U.S. intelligence community, still abiding by the terms of the deal under current U.S. sanctions—what’s the political benefit of giving up sanctions leverage right off the bat?

Richard Nephew, who was the sanctions expert for Obama’s negotiating team with Iran, told me that even if a Democrat made a tactical decision to reenter the deal, “we’ve got to figure out a way to deal with the lost time.” The current terms of the JCPOA, he said, are “rapidly becoming not worth it.”

Administration officials have repeatedly said that they seek not regime change but behavior change, and that their goal is to drive the Iranians to the table to strike a better deal. But critics of the “maximum pressure” policy I spoke to, whether or not they supported the Iran deal initially, all agree on one thing: Iran is prepared to wait out the next two years of the Trump administration. “Absent an unforeseen U.S. sweetener, I believe Iran is willing to wait,” Hochstein said. “They’re willing to take the pain. They’ve demonstrated that. They’ve had bad times before.”

NEXT STORY: Trump Picks New Top NATO Commander

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.