If the United States lifted sanctions on Iran, the world price of oil could fall by 10 percent. We in the U.S. are foregoing billions of dollars in savings when we have so much need for infrastructure and worry about funding Social Security and Medicare as well.
Roughly 35% of all seaborne oil goes through the Strait of Hormuz (largest dot). If blocked for even one week, the global economy would be devastated. Map: oilprice.com
From a talk by Soraya Sepahpour-Ulrich, synopsis by Newsletter Staff
Soraya Sepahpour-Ulrich is an Iranian-American independent foreign policy analyst and peace activist who was visiting Iran, her country of origin, on May 8 when Trump announced that the U.S. was pulling out of the Iran nuclear deal. In the Joint Comprehensive Plan of Action (JCPOA) of 2015, between and the P5 + 1 (the U.S., Britain, France, China, Russia, plus Germany) and the European Union, Iran agreed to limit enriching uranium. In exchange, Iran was given relief from the sanctions that had been imposed on it. Now that the U.S. no longer accepts the agreement, Iran is again being placed under sanctions. On June 20, 2018, Soraya spoke about the change in U.S. foreign policy, how it affects relations between the U.S. and the world, and what she heard people say about it in Iran. Here is a synopsis of her talk, which was delivered via Skype at an event sponsored by the Middle East Committee of Women Against Military Madness:
The Iran deal was not a deal between the United States and Iran, but an agreement between the United States and five other parties – Britain, France, Germany, China, Russia, and the EU –and Iran. So, pulling out of the deal was a much harder slap across the face of the allies and international order than it was of Iran and Iranians. Not only was the message sent that the U.S. has zero regard for its partners and holds them in very low esteem, but that it has no respect for international institutions and multilateral agreements. And it pushed Iran, which is a very powerful country, into the arms of Russia and China, not the desired result one would expect for U.S. foreign policy.
Israeli Prime Minister Netanyahu, a very close U.S. ally, with his April 30 performance alleging proof that Iran had lied and violated the nuclear agreement, confirmed that clearly the plan for the U.S. to pull out had been in the making for a while. [Iran had passed multiple scrupulous International Atomic Energy Agency inspections. The proof of its violations was debunked by experts and diplomats alike.]
Netanyahu and Trump’s statements leading up to the actual pullout and possible reimposition of sanctions created uncertainty in Iran and had a huge impact on the currency exchange rate. One could not find foreign currency such as the dollar or the euro, even if one could afford to buy it. Trade came to a halt.
A serious concern was what would happen to the import of medical goods and medication. This alarmed many, as they all knew people who need life-saving medication such as chemotherapy. Restricted in its ability to enrich uranium, Iran may be unable to supply what it needs; a percent of its enriched uranium is used for medical purposes: Isotopes are used for nuclear medicine, radiology, MRIs, etc.
Sanctions are terrorism under U.S./UN laws. (See “Sanctioned Terrorism” by Soraya Sepahpour-Ulrich in Foreign Policy Journal.) Yet even though they were forced on Iran, there had been a benefit to Iran during the 40 years it was under sanctions. Prior to the sanctions period, modern colonialism had created dependency (referred to as dependencia in international relations theory): Foreign governments sell equipment, machinery, and other needed supplies to target countries while holding back on information how to use the items, thus ensuring a continuous market for these consumer goods and for the personnel with the know-how. The imposition of sanctions, and attended isolation, provided Iran with the opportunity to develop self-sufficiency in place of dependency.
So after the Shah was deposed in the Iranian Revolution, Iranians began to invent and innovate and the country began to thrive. Iran excelled in its medical research program. It developed research on AIDS and on treating chemical burns which had resulted from the Iran-Iraq War in the 1980s. [The chemicals used against Iranians were provided to Iraq by the U.S.] Iran made great strides in cancer research and nuclear medicine using nuclear isotopes. The nation became a major exporter of cars, agricultural goods, and more. Iran even created a space program.
The sanctions from 2012 to 2015 were particularly punitive. When they were lifted on Iran in January of 2016, as a result of the Iran Nuclear Deal, President Rohani’s administration believed that if Western companies made profits in Iran and those profits were maximized, sanctions would not be reimposed on the country. Iran opened up to foreign investment and foreign goods. But much of what was imported into Iran was what Iran could already create. The influx of foreign goods hurt manufacturing, farming, and many factions of Iran’s economy. Iran imported more than it was able to export, which resulted in a trade deficit. But it wasn’t just the suppliers of goods that were hurt.
Economist Paul Craig Roberts, a former U.S. Treasury official, has described how neoliberal economics operate in relation to Russia, but what he described applies equally to Iran post-JCPOA. A country is flooded with foreign capital, driving up the value of its currency. Then, at an opportune time, the capital is pulled out, and the value of the country’s currency drops. Domestic inflation results. Imports cost more. Living standards decline. Wrote Roberts, “Washington has always used these kind of manipulations to destabilize governments.”
Last year, Trump was ridiculed, yet there were still many pro-Western Iranians, and many who sought better relations with the United States. But the pulling out of the deal actually united the people in their contempt for the U.S., in their mistrust of it. It also shifted the blame from any Iranian internal mismanagement to blame outside – to the U.S. In May, anger shifted from the current U.S. administration to the U.S. itself. Just one example: Iranians were insulted and angry when the American company Nike refused to provide shoes to Iranian players in the FIFA World Cup.
Trump’s withdrawal from the nuclear deal will unite political forces inside Iran and encourage them to follow a different path for running its economy and solving its current problems.
There is not only a loss of credibility but also a financial loss to the U.S. If the United States lifted sanctions on Iran, the world price of oil could fall by 10 percent. We in the U.S. are foregoing billions of dollars in savings when we have so much need for infrastructure and worry about funding Social Security and Medicare as well.
This spring, among some in Iran, a fear of potential war began to loom on the horizon. Many had looked forward to peace and prosperity and had put aside any thought of war, but it seemed to have found its way back into Iranian thoughts. Soraya said, “I was asked repeatedly if there was going to be a war. At one point I would have said a definite no, but I was not so sure with this administration.”
Why does she fear war? There are several issues that made her inclined to think this way:
An increase in U.S. weapon sales to regional allies.
Unless the sanctions and violation of the deal can be resolved, Iran will resume its enrichment activities. This would be its legal right under international law. With this to use as an excuse, the U.S. could start a war or Netanyahu’s supporters will drag the U.S. into a war. The U.S. – or the neoconservatives formulating American foreign policy – have not given up on changing Iran, one way or another.
The Strait of Hormuz is the most vital chokepoint for the passage of oil and only about 21 miles long. The strait is Iran’s territorial water as defined under international law. Although Iran’s navy is no match for U.S. warships, its smaller, more nimble watercraft have the ability to maneuver in this waterway whereas the massive U.S. ships don’t. In the case of an attack, Iran would block this narrow passageway – and that would be legal.
Roughly 35 percent of all seaborne oil goes through the Strait of Hormuz. Most of this oil goes to Asian markets – China, South Korea, India, Japan – with the remainder going to Europe.
As it is, with hostilities and withdrawal of the deal, and the sanctions against Venezuela, oil prices are skyrocketing. Even if the Strait of Hormuz were blocked for one week, the global economy would be devastated. Yet it is not clear how insane U.S. policy can get under Trump’s leadership, or that of his warhawk advisors. (Another very important chokepoint in the region is Yemen’s Bab el Mandeb, which is why the Arab countries, at the behest of America, are attempting to capture it.)
Iran has been prepared for an American attack for decades. Although Iran is no match for America’s firepower, but because of the sheer number of Iran’s population and its size, if attacked, it would be able to inflict a great deal of harm on America and America’s personnel and interests, as there are many U.S. bases in the region.
Iran is fully aware that America is using regional rivals to weaken it. And Israel has been goading Iran into war and retaliation, especially in Syria. So far Iran has shown restraint, but for how long? Iranians also believe not a single country in the region would dare attack it without the blessings of America. So any assault on Iran would be seen as one conducted by America.
Soraya concluded: “I have no doubt that Iran would retaliate accordingly. We need to be truly sober about the possibility of a military confrontation. And a war with Iran will drag in or affect many countries one way or another. It would make the Iraq invasion look like a cake walk.”
Soraya Sepahpour-Ulrich holds advanced degrees in Middle East studies, public diplomacy, and international relations. Her writings have been published by various national and international websites, and she is often a guest political commentator on radio and television.
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