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The other side of sanctions

By Felix Imonti - posted Thursday, 16 August 2012


Right now, the bombs are not falling. Sooner or later, though, the risk of war must be resolved. They cannot ignore that Section 1245 is a declaration of war; and must be treated accordingly. The Ayatollah has said, "Threat for threat."  



Ayatollah Khamenei compares the present situation of Iran to Mohammed and his early followers who were besieged for three years in the desert of Saudi Arabia. When there seemed to be no hope, they struck the surrounding superior army and defeated it at Badr and Kheybar.  



He sees Iran is also surrounded by an enemy. They are being confronted by two carrier battle groups with a formidable destructive capacity that Iran cannot hope to stop or to match; the repeated threats from politicians in the United States and Israel to attack Iranian nuclear facilities; the newest sanctions that are slowly strangling the economy; and Khamenei believes that it is all for the sole purpose of regime change. 



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That raises the question. How does a minor military power contend with the forces available to the United States? The leaders in Tehran talk about closing the Straits of Hormuz and developing new missiles. It is all bravado that Khamenei hopes will calm anxieties at home and frighten potential aggressors.

Over the three decades of the Islamic Republic, the Iranians have been careful about pushing Washington to the point that it would retaliate militarily. The Ayatollah is not going to provoke the U.S. to destroy the theocratic regime and his political career. 



"....to defend ourselves we will attack on the same level as the enemies attack us," Khamenei said on television in March. Section 1245 is economic warfare. That is most likely to be the battlefield that Khamenei will choose and it fits perfectly into the strategies employed over the centuries by the persecuted Shia minority.
Where is the United States vulnerable economically? It is the draconian character of the sanctions.



At the end of June, Washington did what was expected. All twenty of Iran's regular buyers were granted six-month wavers that will push the next decision beyond the November election. To find any of the twenty governments to be in violation of the sanction restrictions would have compelled Washington to deny access to the U.S. financial system. That would have sparked an economic war with countries taking sides in support or in opposition to the United States.

It is no secret that many governments object to the sanctions and are willing to deal outside of normal channels for a reduced price. If the Iranians should use the new private traders to dump a few million barrels of oil onto the market at a sharply discounted price, they just might encourage one of these governments to openly defy the United States for a bargain. Should the United States imposes restrictions upon the offender, that could trigger an unwanted trade war, while ignoring the challenge would render the sanctions meaningless and invite everyone else to go bargain hunting.

As a persecuted minority, the Shia has learned that the weaker in a conflict must employ cunning rather than muscle. The philosophy is the core principle of the Iranian Revolutionary Guard that focuses upon the use of asymmetric warfare. Employing economic tactics is just another form of the asymmetric warfare. 



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It is the inherent weakness of the alliance that is Iran's strength. The unwillingness of Washington to pressure supposed allies and the simple fact that there are buyers willing to defy the sanctions secretly reveals the cracks in the system. If the Iranians can break through the weak point in the American siege, they will be able to repeat without firing a shot the triumph of Badr and Kheybar.

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Article edited by Jo Coghlan.
If you'd like to be a volunteer editor too, click here.

This article first appeared at oilprice.com on 6 August 2012.



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About the Author

Felix Imonti is a retired director of a private equity firm and currently lives in Canada. He has recently published the book Violent Justice, and regularly writes articles in the fields of economics and international politics.

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