Could the U.S. sanctions on Iran bring a regime change?

By  Hans Izaak Kriek,*

Donald Trump’s reintroduction of sanctions on Iran, overwhelming deplored by the international community except for Israel and a Saudi-led-bloc, has now come into force making the world, in many ways, a more uncertain and dangerous place, Tehran marked the fateful day with air defence drills and military manoeuvres with President Hassan Rouhani saying, “We are in a war situation.” 

An armed conflict is not about to break out, but the punitive US measures can certainly be seen as a declaration of economic war against his country.

“We are confronting a bullying enemy. We have to stand to win,” Rouhani stated. Trump has been called a bully and far worse many times. It is, however, unclear who will emerge as the winner from this bitter confrontation. There is the possibility that in Iran President Rouhani and his reformist government are among the casualties, with the hardliners and conservative clerics emerging as winners.

Regime change in Iran?

The constant charge those of us covering the last parliamentary and presidential elections in Iran heard from the hardliners was that the west, and especially the US, could not be trusted. The Rouhani administration, ran the accusatory narrative, betrayed national security by curtailing the nuclear programme in return for empty promises.

 As the economic situation in Iran continues to deteriorate, there is every chance that popular unrest, which has already been in evidence, will grow, strengthening the hand of the reactionary factions as the next elections come.

 Some of Trump’s close allies, such as national security adviser John Bolton and personal lawyer Rudi Giuliani, have talked of wanting regime change in Iran. There is a possibility they will achieve this – ushering in a leadership that will sweep back reforms and be implacably hostile to the west. Trump has vowed to “hurt” Iran “badly” with the sanctions and they will certainly damage the economy. 

More than 700 banks, shipping companies, oil exporters, transport firms and individuals are now on the sanctions list. Despite US claims that the measures are aimed at Iran’s government rather than the people, it is ordinary citizens who are likely to suffer first with vital necessities being affected.

Europe has no power to do something

Western European governments have so far failed to persuade the Trump administration to offer specific exemptions for food and medicine from the new punitive measures. Humanitarian supplies are supposed to be exempt, but foreign companies and banks were so apprehensive of American financial penalties during the sanctions imposed before the 2015 nuclear deal that supplies dried up, causing severe shortages. 

A European initiative aimed at bypassing U.S. sanctions on Iran is unlikely to meaningfully help the Islamic Republic, according to John Bolton. “We think the government is under real pressure and it’s our intention to squeeze them very hard,” Bolton told media, expressing confidence that Washington’s latest measures against Iran would put significantly pressure on its economy. “As the British say, squeeze them until the pipes squeak. 

The position of some European governments is different from the position of their businesses," he said, suggesting that European firms were unlikely to do business with the Islamic state even if the initiative was introduced. The initiative, known as a "special purpose vehicle", aims to facilitate payments related to Iran's exports and imports despite sanctions by the U.S. The bulk of European companies have more commercial links with the U.S. than with Iran, and it remains unclear how much impact the special purpose vehicle would have.

Gerard Araud, the French ambassador to the US, who has been to the state department along with his British and German colleagues to ask for exemptions, said: “The fact is that banks are so terrified of sanctions that they don’t want to do anything with Iran. It means that in a few months there will be a shortage of medicine in Iran if we don’t do something positive.”

What will happen after Iran’s elections 2019?

The Trump administration’s aim is reduce Iran’s oil sales, the main source of revenue, to zero. But that will mean a global increase in the price of oil which will hurt American industry and hit American drivers at the petrol pumps. Washington has asked other oil-producing states, principally Saudi Arabia – one of the instigators behind the reimposition of sanctions – to increase production.

 At the same time, it has agreed to a waiver from penalties of around six months for some of its allies that import Iranian oil including India, Turkey, South Korea and Japan, as well as China. These states are among the top eight consumers of Iranian oil, so there is unlikely to be an immediate dramatic dip in sales. 

The other signatories to the nuclear deal, the JGPOA, Joint Comprehensive Plan of Action), Britain, France Germany, Russia and China, have repeatedly stressed that Tehran was fulfilling its obligations, as has the UN’s International Atomic Energy Authority. 

But there was a little illusion in Iran that sanctions weren’t coming. The malign shadow of Trump has loomed large over the country in recent years. The parliamentary elections in 2016, with overwhelming victory for the reformists, began to shine light into a closed society, with people looking forward to rejoining the outside world.

 This continued with the election of President Rouhani the next year. He already has warned Iranians they face hard times when new U.S. sanctions take effect but said the government would do its best to alleviate them. It’s interesting to see what will happen next year, how hard will renewed U.S. sanctions on Iran hits the Iranian people?

* international political commentator for European Business Review and editor-in-chief of Kriek Media