Iran’s supreme leader Ayatollah Ali Khamenei has just issued six demands to Britain, France, and Germany if they wish Iran to remain in the 2015 nuclear agreement. Those demands make it likely that Iran will leave the agreement and recommence its enrichment of uranium.
Europeans will not react well to Iran’s demands, which include a European condemnation of the U.S. withdrawal, a European commitment to preserve banking interactions with Iran, to confront any new U.S. sanctions on Iran, to ensure Iranian oil sales remain at their current level, and a commitment not to complain about Iranian missile and regional activities.
But while the Europeans will attempt to placate Iran on those demands, they cannot do so in a formal sense. It’s not that they don’t want to do so, but because the U.S. won’t allow them to do so.
European companies that do business with Iran will lose access to the U.S. market. Until Iran’s economy is the size of the U.S. economy, no amount of complaining will alter the European calculation.
We’re already seeing this dynamic in action. French energy company Total recently withdrew from a $2 billion contract in Iran and other European companies will likely follow suit in the coming days.
The other story here is how Khamenei’s unreasonable asks will affect the more moderate Iranian faction aligned with President Hassan Rouhani. The crucial point here is that Khamenei’s demands serve as his effective endorsement of the hard-line faction aligned with the Islamic Revolutionary Guard Corps over Rouhani. While Khamenei has always been more sympathetic to the hard-line faction, he had previously supported Rouhani’s efforts to reach the 2015 nuclear accord.
That he has apparently changed his mind is of great consequence.
Khamenei’s blessing matters supremely in that he is supreme leader of the revolution. He thus has the final say on matters of state. But by so publicly issuing demands that the Europeans will not be able to accept, Khamenei has effectively tied Rouhani’s hands as he attempts to renegotiate the deal. Rouhani cannot, unless he is willing to spark a civil war or see himself pulled from power, now go against Khamenei. Of course, perhaps that potential showdown is exactly what the Trump administration wants.
Ultimately this means that we’re likely heading towards Iran’s resumption of its nuclear program and the possibility of a U.S. economic blockade or military action. And in the context of threats from China, Russia and North Korea, the potential of America being forced to simultaneously fight multiple international conflicts is growing.
