Iran can be stopped through economic regime change

Iran’s threat to close the Strait of Hormuz, the choke-point for Persian Gulf oil shipments, reveals how deeply the latest Western sanctions — and the threat of even tougher measures — have spooked the clerical regime.

Yet, as the U.S. and its allies aim to tighten the noose, they have to consider two new realities. First, given the progress we now know Iran has made on its atomic-weapons programs, there is little reason to think the leadership will voluntarily disarm. (Unfortunately, if a nuclear-armed Iran is truly unacceptable, military action is the most likely route to success — and the window for that option is closing fast.)

Second, if we are going to pursue tougher international sanctions against Iran — and we should — the goal should be regime change in Iran, not stopping proliferation. In fact, regime change would make the idea of an Iranian bomb far more tolerable.

For the first time since Iraq invaded Iran in 1980, Iran’s leadership fears for its oil wealth. Yet the Barack Obama administration, which has justifiably applauded itself for advancing sanctions, appears hesitant to implement aggressively Congressional legislation against Iran’s central bank — the punishment the clerical regime dreads most, as it is the critical financial institution for petroleum sales.

Politics of Oil

The White House’s hesitancy is understandable. Central-bank sanctions would be a redefining moment for the administration, which came into office eager to talk to Iran’s virulently anti- American supreme ruler, Ayatollah Ali Khamenei. Effective central-bank sanctions could shatter Iran’s economy, and would quash any hopes for progress through engagement. And, if imposed rashly, sanctions could also shock the oil markets, possibly causing considerable political trouble for Obama in an election year.

A nasty conjunction has developed in 2012. The International Atomic Energy Agency’s recent revelations about the military dimensions to Iran’s nuclear program have shrunk the timeline for a Persian bomb. Israeli and French calculations that Iran could produce a weapon within 18 months seem increasingly credible; 2012 might not be the year of nuclear- armed theocrats, but it could well turn out to be the last year in which a preventive military strike against Iran’s nuclear sites would possibly still be effective.

Since the death of the Islamic Republic’s founder, Ayatollah Ruhollah Khomeini, in 1989, too many Western politicians have played up any sign of moderation in Iran’s revolutionary politics and ignored the regime’s continuing penchant for violence. However, should the West wake up one morning to find that Iran’s Revolutionary Guard possesses a functional atomic bomb, it would become harder to play down Iran’s longstanding relationship with al-Qaeda and other militant Islamic terrorist groups; the alleged plot to blow up a Saudi ambassador in a Washington restaurant; the killing of U.S. troops in Iraq and Afghanistan; and the entire mind-set that sees embassy-sacking and hostage-taking as statecraft.

There is also the role of the 2012 U.S. presidential election to consider. Let’s face it: Obama is probably more concerned at the moment about sharp oil-price increases, which could occur if American and European sanctions stopped Iranian oil from reaching the market, than a still-theoretical Persian bomb. An Israeli attack on Iran’s nuclear sites, which could also cause the price of oil to soar by $50 per barrel or more, might seem equally worrisome for his re-election chances.
Yet that’s not the case. An Israeli strike (or an American one) would not necessarily be damaging politically, especially since Obama’s likely challenger, Mitt Romney, has said he won’t allow Iran to go nuclear. Depending upon how he responded to an Israeli raid or an Iranian provocation that forced an American military strike, Obama electorally could gut the Republican national-security challenge.

Short-Term Increases

And, as oil analysts at the International Energy Agency in Paris will tell you privately, an Israeli or American military strike against Iran’s nuclear sites would likely cause only short-term price increases, so long as Iranian oil infrastructure wasn’t damaged (an angry clerical regime would still need to sell petroleum). Iran might go on the warpath in the Persian Gulf, which would certainly roil the oil market, but the U.S. Navy’s war-gaming of this scenario — two weeks to knock out the Iranian military — is probably accurate. Western governments could also release emergency reserves; anti-Iranian, oil-rich Arab states might also put more oil into the market.

Read more