Thursday, UPI reported that the Iranian Oil Ministry had extended an invitation to pre-approved foreign companies, in hopes of enticing them to invest in the development of the Azadegan oil field. The announcement arguably reflects increased optimism among Iranian officials about their prospects for foreign investment, following the previous announcement that France’s Total SA had completed a deal to develop the South Pars gas field as part of a consortium with a Chinese energy company and a subsidiary of the National Iranian Oil Company.
The Associated Press report on the Total deal quoted one Iranian Member of Parliament as saying that it would “break the taboo of American sanctions,” thereby opening the way to more Western business deals even as tensions remained fraught between the Iranian regime and the White House under the administration of President Donald Trump. Meanwhile, Iranian Oil Minister Bijan Zanganeh claimed that even American companies would be welcome to do business with the Islamic Republic, and that it was only the US government that was standing in the way of potentially lucrative investments.
However, these narratives were quickly disputed by international business analysts. And it has previously been emphasized that despite Iran’s months-long protests that the US is not doing enough to facilitate an Iranian recovery following implementation of the 2015 nuclear agreement, the Islamic Republic has taken no steps to bring itself into alignment with international standards like those set out for all nations by the Financial Action Task Force on Money Laundering.
It is in part because of disregard for standards such as these that the Iranian economy remains an “unacceptable business risk,” as pointe out on Thursday by The Street. The investment-oriented news source says that regardless of the move by Total SA, the more important decision makers in this situation are banks and lending institutions, and these remain extremely wary of the Iranian market.
The article implies that there was little the US could have done under the previous presidential administration to facilitate international investment in Iran if Iranian officials failed to take action on their own. And the article states outright that “the US doesn’t have to do that much” if it wants to continue frustrating Tehran’s economic ambitions during this period of conflict with the Trump administration.
These observations underscore the claims made by Ray Takeyh of the Council on Foreign Relations, in an editorial published by the Washington Post. Takeyh points out that it is fairly common for Iran to be described as an “island of stability” in the midst of the instability of the broader Middle East. No doubt, this is a factor contributing to the decision by companies like Total SA to explore supposed investment opportunities in the Islamic Republic. But Takeyh pointedly disputes this talking point and insists that far from being stable, the Iranian regime is on the verge of political collapse.
This same point was made last Saturday by National Council of Resistance of Iran President Maryam Rajavi and by supporters of the coalition, at its annual rally in Paris. Although Takeyh did not name the NCRI, he did separately argue that the empowerment of “domestic critics” of the Iranian regime, along with the imposition of economic penalties by the US and its allies, could help to speed the transition of the Iranian government from its current theocratic dictatorship to a popularly-favored democratic system. Takeyh also implied that the prospects for this transition would be even more immediate if the US was prepared for the death of Supreme Leader Ali Khamenei, which may be imminent.
“The planning for all this must start today,” Takeyh argues; “once the crisis breaks out, it will be too late for America to be a player.” But in some ways the US has already made its interest in regime change known. Secretary of State Rex Tillerson told the House Foreign Affairs Committee last month that the US should “work towards support of those elements inside of Iran that would lead to a peaceful transition of that government.” The Trump administration as a whole has been eager to keep international attention focused on Iranian misbehavior, and it has followed up on this with increased sanctions on the country’s ballistic missile program. That cause has also been taken up by Congress, which is working to pass legislation that would extend terrorism-related sanctions to the entirety of the Iranian Revolutionary Guard Corps.
It is generally understood that the threat of US sanctions helps to hold back would-be Western investment, even if it is not the only contributing factor. And at the same time that this helps to encourage the perception of Iranian instability, the same thing is accomplished by the continued expansion of tensions between Iran and its various adversaries. This is something that the White House has also promoted, through its moves to expand relations with Saudi Arabia and other Arab powers. In May, the Arab Islamic-American Summit in Riyadh included collective statements criticizing Iran’s regional intrusions, and it coincided with the signing of a 110 billion dollar arms trade agreement between the US and Saudi Arabia.
However, since then the collective Arab opposition to Iranian influence has hit a snag in the form of a diplomatic crisis between the Saudis and the nation of Qatar, which has expressed relative willingness to coordinate with the Islamic Republic. On Tuesday, following Qatar’s rejection of a series of demands presented by Saudi Arabia and the United Arab Emirates as conditions for lifting their blockade of the fellow Arab country, the New York Times published an article explaining that Tehran “would be happy to see [the crisis] quietly drag on” because it distracts attention from the previous situation, in which “the entire Sunni Arab world seemed lined up against” Iran.
Toward that end, the Iranians have reportedly sent food to Qatar in order to make up for what the country has been deprived of as a result of the blockade. But the Times suggests that Iranian assistance is unlikely to extend further than this, both because it would not be in the interests of the Iranian regime to seriously encourage a resolution and because that regime simply cannot afford a more serious investment in a neighbor with limited strategic significance.
The initial aid to Qatar adds to the financial burden that the Islamic Republic has already incurred from its years-long provision of arms, salaries, and direct military assistance to forces fighting in defense of Syrian dictator Bashar al-Assad. At the same time, Iran maintains similar influence over the civil war in Yemen, where it backs the Houthi. And in recent months the National Council of Resistance of Iran has reported that Iran has substantially expanded the terrorist training programs being run by the Revolutionary Guards.
All of these things arguably contribute to the potential economic instability of the Islamic Republic, at a time when it is boasting of foreign investment prospects that have yet to manifest beyond agreements with a handful of Western companies.