Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19
Phase 1 of Stock Market Correction - 11th Mar 19
Long Awaited Stock Market Pullback has Finally Arrived - 11th Mar 19
US Presidential Cycle and the Stock Market - Video - 11th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - 11th Mar 19
Chinese Economic Data Shakes the Global Stock Markets - 11th Mar 19
The Fed Is Playing a Dangerous Game - 11th Mar 19
The Stock Market Has Called the Fed’s Bluff, What’s Next? - 11th Mar 19
Turkey Holiday Bazaar Extreme Jewelry Price Haggling - Fethiye Market - 11th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

U.S. Iran Nuclear Deal Regional Reverberations

Politics / Middle East Nov 28, 2013 - 12:13 PM GMT

By: STRATFOR

Politics

What was unthinkable for many people over many years happened in the early hours of Nov. 24 in Geneva: The United States and the Islamic Republic of Iran struck a deal. After a decadelong struggle, the two reached an accord that seeks to ensure that Iran's nuclear program remains a civilian one. It is a preliminary deal, and both sides face months of work to batten down domestic opposition, build convincing mechanisms to assure compliance and unthread complicated global sanctions.


That is the easy part. More difficult will be the process to reshape bilateral relations while virtually every regional player in the Middle East seeks ways to cope with an Iran that is no longer geopolitically encumbered.

Analysis
The foreign ministers of Iran and the six Western powers that constitute the so-called P-5+1 Group clinched a six-month deal that begins the curtailment of Iran's nuclear program while relaxing as much as $6 billion in sanctions -- basically those embargoes that do not require U.S. President Barack Obama to secure approval from Congress. Allowing Iran to enrich uranium to "civilian" levels while making sure the know-how is not diverted to military purposes will be complex.

There will be disruptive events along the way, but the normalization process is unlikely to derail. Both sides need it. The real stakes are the balance of power in the Middle East.

Iran is far more concerned with enhancing its geopolitical prowess through conventional means. Meanwhile, the United States wants to leverage relations with Iran in order to better manage the region in an age of turmoil. Contrary to much of the public discourse, the Obama administration is not facilitating a nuclear Iran.

Washington and the Middle East
The United States is prepared to accept that Iran will consolidate much of the influence it has accumulated over the 12 years since the Sept. 11 attacks. From the point of view of the Iranians, they had reached the limits of how far they could go in enhancing their geopolitical footprint in the U.S. war against Sunni Islamist militancy. The tightening sanctions threatened to undermine the gains the Islamic republic had made. Thus the time had come for Iran to achieve through geopolitical moderation what was no longer possible through a radical foreign policy.

Though the United States is prepared to accept an internationally rehabilitated Iran as a major stakeholder in the Greater Middle East region, it does not wish for Tehran to exploit the opportunity in order to gain disproportionate power. The strategic focus must now shift from nuclear politics to the imperative that the United States balance Iran with other regional powers, especially the Sunni Arab states.

The post-Arab Spring turmoil in the region has plunged U.S.-Arab relations into a state of uncertainty for two reasons: First, the autocratic regimes have become unreliable partners; second, the region is seeing the rise of radical Sunni Islamist forces.

A rehabilitated Iran, along with its Shiite radical agenda, serves as a counter to the growing bandwidth of Sunni radicalism. All strategies have unintended consequences. A geopolitically unchained Iran, to varying degrees, undermines the position of decades-old American alliances in the region. These include Turkey, Israel and the Arab states (the ones that have survived the regional chaos defined by anti-autocratic popular agitation, such as Saudi Arabia, Egypt and others).

Washington is not the only actor anticipating a shift in its regional ambitions. France initially challenged earlier attempts at a U.S.-Iranian accord, placing greater pressure on the Iranians -- much to the enjoyment of regional states such as Israel and Saudi Arabia. Though Paris has been eying the Middle East -- specifically the Sunni monarchies of the Persian Gulf -- as a larger potential market for its energy firms and defense exporters, France stands to gain little from unilaterally opposing a U.S.-Iranian deal. Rather, France sought to shape the talks and regional reactions to the benefit of its domestic industries. Germany and the United Kingdom, the other EU powers present at the talks, are hoping to gain greater exposure for their energy firms and exports to Iran's large domestic consumer base. Germany in particular enjoyed one of the largest non-energy trade relationships with Iran before the most recent sanctions program took effect.

Regional Reverberations
The United States and the rest of the P-5+1 are not the only ones attempting to reset their relationship with Iran. Ankara, though initially opposed to Iranian ambitions in Syria and competing for influence in Iraq, has pursued a warming of ties with Tehran over the past several months. Turkey is a rising regional power in its own right, but domestic infighting within Turkey's ruling Justice and Development Party is coinciding with a slump in the national economy. Meanwhile, Ankara is struggling to find a peaceful, political solution to its Kurdish issue. Turkey faces an uphill challenge in moving beyond the ring of Iranian influence on its borders, but a potential normalization of relations between Washington and Iran provides some opportunities for Ankara, even at the risk of empowering Iran's regional ambitions. The two countries face similar challenges from Kurdish separatism in the region, and the Iranian market and potential energy exports could help mitigate Turkey's rising dependence on Russian energy exports and potentially boost its slowing economy.

For all its rhetoric opposing the deal, Israel has very little to worry about in the immediate term. It will have to adjust to operating in an environment where Iran is no longer limited by its pariah status, but Iran remains unable to threaten Israel for the foreseeable future. Iran, constrained by its need to be a mainstream actor, will seek to rebuild its economy and will steer clear of any hawkish moves against Israel. Furthermore, Iran is more interested in gaining ground against the Arab states -- something that Israel can use to its advantage. The report about the Israeli security establishment seeing the deal as a positive development (in contradiction to the position of Israeli Prime Minister Benjamin Netanyahu's government) speaks volumes about the true extent of Israeli apprehension.

That leaves the Arab states, in particular Saudi Arabia and its Gulf allies, for whom a U.S.-Iranian rapprochement is a nightmare scenario. Riyadh and its neighboring monarchies are caught in the middle of the Arab Spring, which challenges them from within, and were long concerned with the rise of Iran. But now that their biggest ally has turned to normalizing ties with their biggest adversary, these countries find themselves bereft of good options with which to manage an Iran that will gain more from normalizing relations with the United States than it did with the American response to the 9/11 attacks.

Iran has played a large and visible role in bolstering the beleaguered al Assad regime during the Syrian civil war. Iran's potential reset in relations will bring no easy or quick resolution to Damascus. The Syrian regime will still face the daunting task of having to rout the rebels and secure large swathes of Syrian territory, a difficult task even in the unlikely scenario of a precipitous drop in Sunni Arab backing for the rebels following a more comprehensive agreement between Tehran and the West. Indeed, the Syrian conflict, Iran's support of Hezbollah and the future of Iranian influence in Iraq will form the more contentious, difficult stages of U.S.-Iranian negotiations ahead.

The Saudis, domestically at a historic crossroads, are trying to assert an independent foreign policy given the shift in American-Iranian ties. But they know that such a move offers limited dividends. Riyadh will try to make most of the fact that it is not in Washington's interest to allow Tehran to operate too freely in the region.

Likewise, the Saudi kingdom will try to work with Turkey to counterbalance Iran. But again, this is not a reliable tool, given that Turkish interests converge with those of Iran more than they do with Saudi Arabia's. Quietly working with Israel is an option, but there are limits to that given the Arab-Israeli conflict and the fact that Iran can exploit any such relationship. In the end, the Saudis and the Arab states will have to adjust most to the reality in which American-Iranian hostility begins to wither.

This analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today! "This report is republished with permission of STRATFOR"

© Copyright 2013 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.

STRATFOR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules