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Gold Price Trend Forecast Summer 2019

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.

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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.

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