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Despite Oil Price Drop, US Relinquishing Leverage over Iran

 The original budget proposal optimistically anticipated the reversal of the 60 percent drop in global oil prices that took place between June and January. But amidst Saudi refusals to cut production, this expectation quickly proved unsustainable. The administration of Iranian President Hassan Rouhani then revised the figure lower, albeit without any announced changes to existing spending plans, including a one-third increase in the budget for the Iranian Revolutionary Guard Corps.

Now the revised figure, totaling 27.5 billion dollars and based on an average oil price of 72 dollars per barrel, has been further diminished by about 25 percent, to a total of 24 billion dollars. This means that oil may comprise less than half of the national budget for the coming year – an unusual situation for a heavily sanctioned country with the fourth largest confirmed oil reserves in the world.

The change – and the apparent hesitancy of the regime to make that change – points to the amount of economic pressure that the Islamic Republic is under from the oil market at a time when it is working to convince the US and its allies to relinquish strict restraints on the Iranian economy. But as has been made clear by recent disputes between US President Barack Obama and his own Congress, the Obama administration is not eager to exploit such pressures, for fear of alienating Tehran in discussions over its nuclear program.

The administration has been roundly criticized for this approach, not just with respect to depressed oil prices and the sanctions relief that has largely compensated for them, but also with respect to Iran’s role in conflicts and internal affairs of other Middle Eastern countries. That role has not been much challenged, and indeed President Obama has written at least three letters to Iranian Supreme Leader Ali Khamenei advocating for cooperation between the two countries in conflict against the Islamic State of Iraq and the Levant.

An article published at FrontPage Mag on Monday specifically criticized the Obama administration for its apparent refusal to arm or otherwise cooperate with moderate Sunnis in Iraq’s Anbar province. In Iraq more generally, the fighting against ISIL is increasingly led by Iran and carried out by Iran-supported Shiite militias, which are beginning to assimilate the remaining Iraqi armed forces, by some accounts. The Shiite-dominated government in Baghdad has avoided channeling weapons into the hands of non-Shiite opponents to ISIL, such as those at Anbar.

The Obama administration has reportedly allowed this situation to persist, and FrontPage Mag references some of Obama’s opponents in Washington as saying that the president has made this decision out of fear that bypassing the Iraqi government would offend Tehran and endanger the nuclear talks. The FrontPage Mag article concludes by saying that Obama’s policies are thus “selling out” both Israel and the Iraqi Sunnis.

In an interview with Fox News Radio, retired US General Jack Keane also referenced the Anbar Sunnis and drew much the same conclusion as FrontPage Mag, arguing that partnership with the Anbar Sunnis is a fairly obvious strategic move, which the president has eschewed because he “does not want to do anything that would endanger this bankrupt deal” that is currently in the making between the US and Iran.

With this commentary, Keane effectively endorsed the view that the Obama administration is giving away American leverage in both key dimensions of its dealings with Iran – allowing the regime to retain the capability to breakout to a nuclear weapon and also allowing it to expand its influence in the Middle Eastern region and beyond.

As an example of that broader influence, The Tower reported on Monday that there is evidence showing that Iran is continuing to funnel light machine guns, RPG launchers, mortar tubes, landmines, and other arms to Sudan in violation of international law. Sudan has long been a channel for Iran to arm Hamas and other Islamic militant groups.

Furthermore, and especially in light of the Iranian-backed Shiite takeover of Yemen, Tehran’s relationship with Sudan helps to strengthen its naval presence in the Red Sea, in turn giving it as-yet unchallenged leverage over Egypt, currently an anti-Islamist ally of the West. This is grounds for concern among opponents of the Iranian regime, because that regime’s influence on conflicts in the Middle East has served to deepen their sectarian aspects and has been supplemented by rhetoric against the Western contribution to the conflict against ISIL, which has thus far been limited to air support.

On Monday, the National Council of Resistance of Iran condemned the killing of 21 Egyptian Christian migrant workers in Libya by ISIL-affiliated militants. The NCRI’s statement notes that Tehran is the modern prototype of such violently repressive Islamism in the region, and that Tehran’s influence in the region is helping to grow that trend, in both its Sunni and Shiite forms.

“The first and foremost essential step in countering this ominous phenomenon that threatens the Middle East and the world is to evict the Iranian regime from the region,” the NCRI statement concludes.