Of course, the feasibility of these plans depends upon adequate capital investment to keep up with the promised development projects, as well as the ability of the Islamic Republic to reach foreign markets that are interested in purchasing the excess oil. In the nearly three months since the full implementation of last summer’s nuclear agreement with six world powers, Iran has had mixed results in both of these areas. Some foreign markets and companies have been eager to resume transactions while others have held back out of fear of an unstable relationship between Iran and the West.
This situation has prevented Iran from living up to the entirety of its expectations for a rapid and dramatic increase in oil exports. Nevertheless, Iranian oil has steadily seeped into various European markets, as well as moving more quickly into regional markets like India. On Tuesday, World Maritime News pointed to one of the latest indicators of the former trend, reporting that Islamic Republic of Iran Shipping Lines had reopened its transit with Antwerp, which had received the largest volume of Iranian merchandise in all of Europe prior to 2010.
The report notes that Antwerp is “home to the continent’s largest integrated petrochemical cluster,” meaning that it is ideally suited to the receipt of Iranian oil, although other commodities will certainly be exchanged via IRISL as well.
This is far from the first European transit line that has been reopened by Iran, which has been expanding globally not only over water but also through land and rail transportation. On this point, The Economist reported that railway transit originating in Iran has recently expanded throughout China, Turkey, and Europe. Furthermore, Iran has plans both to continue this trend and to double the size of its domestic rail network.
Of course, these efforts will require foreign investment, as the rail projects alone are set to cost 28 billion dollars. The Economist is quick to note that such foreign investment has been difficult for Iran to obtain. This is in large part because, even though trade with foreign entities is on the upswing, the Islamic Republic still maintains notably poor relations with many of its neighbors, as well as plainly antagonizing its traditional adversaries in the West, as by testing ballistic missiles in defiance of United Nations Security Council Resolutions.
Some believe there is an effort to expand Iranian influence in the region. As evidenced by the recent decision by the Gulf Cooperation Council to declare the Iran-backed Hezbollah paramilitary a terrorist organization, some of this influence may manifest itself through foreign terrorist operations.
Last year, the US Congress passed legislation preventing visa waivers from being applied to travelers from Iran or other states associated with a high risk of terrorism. The bill highlighted the concern that visa-free travel could increase the risk of operatives of Hezbollah or the Iranian Revolutionary Guard Corps finding their way into other countries.
But for the very same reason, visa-free travel is an asset to Iranian allies like Syrian dictator Bashar al-Assad, who remains mired in a five-year civil war. Even in the midst of a tentative cease-fire between most of the combatants in that conflict, Iran has vowed to maintain its full support for Assad, thus stoking concerns about growing Iranian influence in the broader Middle East. This in turn threatens to undercut the friendly relations that sources like The Economist regard as necessary to the completion of many of Iran’s desire projects.
Indeed, Iran and its main regional rival Saudi Arabia have clashed with seemingly increasing violence over the issue of Iran’s imperial ambitions. Gulf News reported on Tuesday that Saudi Deputy Foreign Minister Khalid al-Jarallah had echoed the lead foreign minister’s remarks in calling for Iran to change its aggressive behavior among neighboring countries.
Both men’s statements came in response to Iranian President Hassan Rouhani’s suggestion that Iran was prepared to repair its relationship with Saudi Arabia. This claim and the subsequent responses highlight the apparent propaganda war that is ongoing as the two countries compete to portray each other as the aggressor in conflicts that include a proxy war in Yemen.
The Saudis and Iranians have both shown some willingness to communicate directly over regional issues, but no actual compromise seems to have resulted. At a time when Saudi Arabia is leading fellow OPEC countries in talks with Russia over the possibility of an oil production freeze, Iran is now scheduled to participate in discussions among these parties in Doha next month. But this show of civility comes in spite of the fact that Iran has already rejected the prospect of participating in any such agreement.
Doha may thus prove to be a sounding board for the seemingly worsening discord between Iran and Saudi Arabia – a trend that has been widely recognized since the January burning of the Saudi embassy and consulate by Iranian mobs following Riyadh’s execution of a Shiite dissident cleric. Yet despite this worsening conflict, some of Saudi Arabia’s partners in OPEC and the Gulf Cooperation Council appear to have been enticed into expanding relations with Iran as a result of the financial incentives associated with sanctions relief and the growth of development projects in the Islamic Republic.
President Rouhani visited Pakistan over the weekend, and Wingate Wire reports that Pakistani officials described the incident as proof positive that Islamabad could maintain its traditionally cooperative relationship with Saudi Arabia while also reaching out to Iran and preparing to act upon a number of newly-signed memoranda of understanding.
Furthermore, Al Bawaba reported on Tuesday that Iran had received similar overtures from Oman, which signed a memorandum of understanding concerning Iranian automotive sales in January and is now preparing to host production of 10,000 cars by Iranian car company Iran Khodro in 2017. Such cooperative endeavors give Iran an economic foothold on the Arabian Peninsula, alongside the military and political foothold that it has already established in Yemen.
Both these situations may further exacerbate Saudi concerns, but it remains to be seen whether those concerns will lead to measures that are capable of counteracting the steady expansion of Iran’s influence and transactions in the Middle East region and beyond.
