Tensions are rising in the Middle East generally and especially in the Gulf. The Trump Administration decision to end the waivers for eight countries permitted to buy Iranian oil is, not surprisingly, having a dramatic effect on the Iranian economy. With Iranian exports of oil expected to drop to 500,000 barrels a day, the government will be losing a significant source of its revenue and the Iranian economy is now in free fall. Given how much pressure the Administration is now putting on the Islamic Republic, the Iranians were bound to react and attempt to show that it was not only the Americans who could impose costs: they, too, could impose a price on America and its interests and friends in the region.
Of course, the modus operandi of the Iranians is to use proxies and conduct deniable attacks—not to provoke directly. They have always understood that directly attacking the United States could unleash a powerful military response. So instead they focus on indirection, developing plans and options to carry out sabotage and proxy operations against US forces, interests and friends.
In the aftermath of the Trump decision to end the waivers, such planning clearly began—and American intelligence picked it up. The Administration’s decision to publicize the intelligence and to move a carrier strike group to the region was shaped by the belief that if they exposed what the Iranians were planning, it would put the Iranians on notice that we knew what they were doing and that would enhance deterrence of them. National Security Advisor John Bolton’s declaration that Iran would face “unrelenting force” if it acted against our forces, our interests and our regional allies was clearly made with this in mind.
But by seeking to cover so many threats, Bolton left the Iranians plenty of room both to test the limits of what the US would do while also exposing what threats to our friends and our interests we would not be responding to. We clearly do not want oil terminals, tankers, and infrastructure attacked in the region, and yet that is precisely what happened with no US response after the Bolton assertion. Note, for example, that the day after the Bolton declaration, there was an explosion in the Saudi port of Yanbu of a petroleum shipping terminal. Two days later, four oil tankers—two Saudi, one Emirate and one Norwegian--were sabotaged with explosives blowing holes in their hulls. And, after another two days, Houthi drones bombed two Saudi pumping stations.
Yes, Shia militias signaled what they could do to American personnel and forces in Iraq by firing a missile roughly 300 meters from the US embassy in the “Green Zone” in Baghdad. But this was designed to be a reminder; the attacks on the tankers and related oil targets were different. They were designed to drive the price of oil and insurance up—not only with an eye toward intimidation of its neighbors but also perhaps hoping to affect Trump’s calculus. (After all, when he granted the oil waivers last November, he explained them in terms of keeping the oil price low).
Moreover, as the rhetoric escalated and fears of miscalculation were being openly discussed in Western capitals, President Trump was quick to say he did not want a war with Iran. The Supreme Leader, Ali Khamenei, seemed to echo that sentiment when he rather uncharacteristically also said that “neither we nor they want a war…” But tensions have not subsided, because the Iranians seem to believe that as long as they or their proxies can carry out deniable attacks, the US and others won’t respond.
The fact that there is no direct communication between the two also increases the potential for missed signals and misunderstanding. So what might be done? President Trump says if the Iranians call, he will talk and the two “can do a deal.” Ali Khamenei may have said neither side wants a war but speaking to the Americans now would look like a surrender and he is not going to do it. Indeed, at the same time, he was saying in televised remarks that neither side wanted a war, he was also describing talking with the Americans was like “poison.”
Still, the historical record shows that the Iranians have been willing to talk to the US when they were under pressure or were fearful. No doubt, Khamenei prefers to try to outlast Trump and then come to his successor (and the Europeans) and say “you owe us.” But the decline of the Iranian economy may increase the Iranian need to find a way to reduce the external pressure being applied by the US. And, that might yet produce a negotiation; true, it will probably be indirect given the Iranian desire to avoid looking like they caved to American pressure, but even an indirect negotiation probably through the Russians could produce an agreement with the Trump Administration.
Knowing the Iranians, they will want to increase their leverage prior to any such talks—and that may come not only from ongoing acts of sabotage on others’ oil infrastructure—but also by breaching the limits of the JCPOA, the Iran nuclear deal. This would pressure on Trump as well as the Europeans. The Iranians understand the Europeans badly want them to stay in the JCPOA and that is at least one reason why Hassan Rouhani, the Iranian president, is playing on European fears, giving them until July 7th to show they will produce economic benefits to Iran to circumvent the American-led sanctions or Iran may no longer respect the nuclear deal. Can European fears build pressure on the Trump Administration? Unlikely, but Trump already is saying he is ready to talk and his interest in talking is likely to go up if the Iranians start producing enriched uranium either at higher levels of enrichment or simply by accumulating more than the 300 kilograms they are permitted under the terms of the JCPOA.
Now is a good time for the Administration and its Gulf Allies to talk about their respective policies toward Iran now. The Gulf states might ask the president and his senior aides, what are they striving to achieve? What are the prospects of escalation? What is the US prepared to do to support its allies in practical terms as they face sabotage or proxy attacks? What should the US that our partners are prepared to do? If the Iranians actually took the president up on his offer to talk and his willingness to do a deal, what might that look like?
This is a time of uncertainty, and it is precisely for these times that allies should talk and make sure they are either on the same page or at least know the areas of convergence and divergence. At least between the US and its partners in the region, this is not a time for surprises.