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By Christopher Dickey
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Congressman Robert Andrews, a Democrat from New Jersey, and Mark Steven Kirk, a Republican from Illinois, made a proposal on the floor of the House last June that, as far as I can tell, sank without a trace. We've heard nothing about it from the administration since, and when I've raised it with several experts on Iran they say it's potentially counterproductive, possibly very dangerous. But with tensions between the mullahs and the rest of the world continuing to grow because of Iran's nuclear research, maybe it's time to take another look at what these congressmen described as a "surgical sanction."
"I find the current U.S. policy debate on Iran is too simplistic," Kirk, who still serves in the U.S. Navy Reserves, told the House. "It is just two-dimensional: either let Iran have the bomb, putting the Middle East under a nuclear hair trigger, or let Israel do it"--that is, try to blow the hell out of Iran's installations--"and have another war." (For the record, Iran says its intentions are entirely peaceful.) Is there another way to stop the spiral toward Armageddon? Kirk and Andrews think so. "Iran has a unique vulnerability," Kirk told the House, "one that opens a new window of diplomacy that could help us achieve all of our objectives without a shot being fired."
That "Achilles' heel of the Iranian autocrats," said Andrews, picking up the theme across the aisle, is gasoline. The mullahs "have presided over such a dysfunctional country that they are in a situation where they sell crude oil in huge amounts to the rest of the world but import gasoline." As mentioned in this column a couple of weeks ago, the International Energy Agency, which monitors global supply and demand, reported last year that Iran had a 60 percent shortfall in gasoline production while burning up 10 per cent of its GDP subsidizing prices of less than 40 cents a gallon.
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Using a word borrowed from the Cuban missile crisis in 1962, the congressmen proposed a "quarantine" to stop ships taking gasoline to Iran and, in Kirk's phrase, "quickly implode her economy."
The two congressmen say they're thinking outside the box. Some critics of the idea, which has also been floated by Iranian exile groups, think they're just out of their minds. Pierre Terzian, the sage behind the Petrostrategies group of oil-industry analysts in Paris, laughed when I mentioned the possibility of a gasoline embargo on the Iranian regime. "That would help the [Iranian] government a lot," he says. "They've been trying for many years now to increase the price." They know the enormous subsidies on gasoline are ruinous to their economy, but none of the mullahs has had the political guts to address the issue head on. "This way," says Terzian, "they could blame it all on the foreigners."
Enforcement of a boycott, even under the auspices of the United Nations Security Council, would be a problem. For starters, Russia or China could veto such a measure. The Iranians also get much of their gasoline from India, something of a nuclear renegade itself, which might not want to put this kind of pressure on Tehran. The biggest gasoline supplier is Dubai, a little city-state with a large tourist industry that could be very vulnerable to terrorist retaliation.
In the congressmen's view, the notion of the quarantine addresses those problems. It would be a naval blockade, in fact, imposed by the Western fleets in the Persian Gulf. "The United States, Britain and France are all naval powers, and they are all there," Kirk told me over the phone a few days ago. If Lloyds refused to insure ships trying to break through the quarantine, imports would be limited to "the most adventurous, rust-bucket, dark-of-night tankers," Kirk suggested. He believes there aren't nearly enough of those to meet Iran's demand, nor could trucks coming overland from Iran's neighbors fill the gap. (It's also worth remembering most of those neighbors are U.S. allies and, in the case of Iraq and Afghanistan, U.S.-occupied.)
Kirk and Andrews worked for more than a year on these ideas as part of what they called the Bipartisan House Iran Study Group. Spinning their scenario forward, Kirk told me he imagines the gasoline quarantine would have effects "so severe it would cripple the [Iranian] economy in weeks." He imagines "several hundred thousand people going into the streets [of Iran], wondering why an obscure debate over someday having nuclear power means they are out of work right now."
But here's the problem, of course: what happens when the mullahs decide to retaliate by stopping their crude from reaching the world market? In years past--for instance, after the terrorist attacks on the United States in 2001 and during the run-up to the Iraq invasion in 2003--Saudi Arabia alone could boost its exports enough to keep markets stable. But according to the latest report from the International Energy Agency, all of OPEC has less than 1.5 million barrels a day of spare capacity. Take Iran's 4 million barrels a day off the market and you're looking at prices leaping to more than $100 a barrel. Already, the ongoing tensions with Iran have sent the figure twitching toward $70.
So what you'd most likely have if the United States ever managed to cobble together its gasoline quarantine would be a global game of chicken. Could the effects inside Iran come on so quickly and so dramatically that this regime of radical religious zealots would cave on the question of nuclear research? Would they be moved by the plight of their people? Or would the rest of the world crack, at last, as energy prices soared, in real terms, to petro-shock levels not seen since 1973? And if the quarantine failed to take effect--what then? A naval blockade, by most definitions, is an act of war. Would it open the way for other, escalating military action?
The Iranians, who have studied the United States and the world economy for many decades, know their gasoline imports are a vulnerability. But they also know perfectly well that they have the rest of us, as it were, over a barrel. "There are no sanctions on the oil sector in Iran that will not hurt the whole world at the same time," says Terzian.
What the Iranians also know--and this is critical--is that the lock they have on the global market isn't going to last. Saudi Arabia and other countries profiting from the high oil prices of the last two years are investing hundreds of billions of dollars expanding their production. Eventually they will be able to absorb the shock if Iran turns off the tap.
That is why the Iranians are in such a rush. They push ahead with their provocative nuclear program, bending rules, taunting skeptics, playing games with the Security Council. And for now, the force is with them, but that's not going to last. "There's a window of opportunity of two or three years, not more, for this 'oil protection'," says Terzian. The Europeans and Americans know that, too. "The Westerners," says Terzian, "are trying to gain time," pressuring Iran to put a moratorium on its nuclear research, while "the Iranians are in a hurry," trying to get the technology for atom bombs before their real weapon, oil, ceases to be effective.
Does the United States have the patience for this game? Does Europe? Or China? Or Israel--which sees its survival at stake? As frustrations and tensions grow, many in the West will be tempted, I think, by the idea of a gasoline quarantine. "This is diplomacy with teeth," says Kirk. But if we go that route, we'd better be ready for it to come back and bite us.
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