In the aftermath of the Geneva accord, Iran is set to emerge at the centre of an escalating East-West struggle for influence
The signing of the Geneva agreement between Iran and six global powers in the early hours of November 24 was a kaleidoscopic event, with game-changing implications. Not only does the accord reduce the chances of a war, but it also promises to redraw Iran into the centre of the global economy and politics. The emerging détente between Iran and the West, after 34 years of hostility that followed the 1979 Islamic revolution, also opens a new chapter in geopolitical rivalry between rising economies, chiefly China and Russia, and the West, desperate to forge an economic revival and reassert its flagging dominance over the globe.
All those at Geneva for the marathon talks that lasted four days were fully aware of Iran’s importance as the world’s geostrategic pivot. At the gateway to Central Asia, Southwest Asia, West Asia, Caucasia and Europe, its unique geography has, over centuries, resulted in the extension of the Persian ethno-cultural, linguistic, religious economic and geopolitical influence into the heart of Caucasia, Central Asia and beyond.
No appetite for more war
At least three compelling factors seem to have persuaded the U.S. to pursue détente with Iran, important among them being war fatigue. After the disastrous U.S. intervention in Iraq and Afghanistan, neither the American people nor the U.S. Congress has any appetite for another overseas military misadventure.
The decline in public support for another war became unambiguous after the late August peak in the Syrian crisis, when 60 per cent of Americans opposed a possible war. Neither was the Congress inclined to accept another military engagement, even without American boots on the ground.
Foremost among other strategic reasons that seem to have driven President Obama to reach out to Iran was China, and the challenge it poses to the economic hegemony of the U.S. Although Washington has credited crippling sanctions for forcing Iran to negotiate a deal, economic warfare also had a downside — of bruising the U.S. economy and, in turn, benefiting China substantially.
In trying to combat sanctions, especially on oil exports and the banking sector, the Iranians deployed an array of mechanisms. As financial blockading began to bite, they were denied the opportunity to trade their oil in dollars, and forced out of a pact that Americans had forged with the petro-monarchies of the region, with Saudi Arabia in the lead. Under this arrangement, top suppliers committed themselves to sell their oil only in U.S. currency, thereby artificially driving up the demand and value of the dollar worldwide.
In response, the Iranians first switched to the Euro for their energy transactions. But with successful American pressure mounting on European banks, they decided to pivot towards the East. China, India, Japan and South Korea, along with Turkey, became their focal markets. Instead of the dollar, the Iranians traded oil with Turkey in gold, while most of the sales to India and China were in the rupee and the Yuan. The resourceful Iranians rediscovered the use of barter as a form of trade, thereby insulating a significant part of their commerce from the heavy financial pressures being imposed upon them by the West.
With the Chinese, who have now called for de-Americanising the world, emerging as the chief beneficiaries, the Americans seem to have been persuaded to go ahead with the phased lifting of sanctions in order to draw Iran into the dollar economy again with a view to shoring up the petrodollar standard that is currently under strain.
The Geneva accord also has a significant geopolitical underside. If things go according to plan — that is the Americans give up the “regime change” project, as promised by President Obama, and normalise ties — it would present Washington and its European allies a big opportunity to undermine growing Russian and Chinese political influence over Tehran.
Unfolding energy battle
Many commentators are dubbing the Geneva agreement as Mr. Obama’s “Nixon moment.” The terminology invokes memories of Richard Nixon’s 1972 visit to China, which led to the shoring up of ties between Washington and Beijing, driving a permanent wedge in the communist camp between the former Soviet Union and China during the peak of the Cold War. The Geneva accord also seems to belong to Washington’s geopolitical arsenal, whose aim is to unsettle ties between Iran and the emerging powers, chiefly Russia and China.
It is therefore not surprising that Cold War era veterans, Zbigniew Brzezinski and Brent Scowcroft, have gone out of their way to do their bit to rein in the Congress which, influenced by the Israeli lobby, was opposed to the deal. Their joint letter called upon “all Americans and the U.S. Congress to stand firmly with the President in the difficult but historic negotiations with Iran.”
Post-Geneva, a new turbocharged round of the Great Game is set to unfold over the Eurasian land mass, which will be chiefly fought over the region’s vast reserves of oil and gas. If sanctions begin to lift, Iran is likely to emerge as the centrepiece of a vicious “pipeline war,” in which the western alliance is expected to compete with rising economies for the diversion of Eurasia’s vast energy resources in their direction.
It is likely that the revival of the Nabucco-West pipeline project will emerge as one of its foremost battlegrounds. Work on the Nabucco project — to funnel gas from West Asia and the Caspian littoral into the European Union via Turkey — has virtually stopped because of the non-availability of sufficient gas. Iran, which has the second largest gas reserves in the world, is now well positioned to fill this energy void.
Yet, Iran’s participation in a revived Nabucco scheme — a core western enterprise — is bound to upset Russia, which has exercised extraordinary leverage over Europe by monopolising foreign gas supplies to the continent.
However, Iran holds a trump card, which can retain Moscow’s standing on top of Eurasia’s energy pyramid. Iran is the core participant of the Iran-Iraq-Syria (IIS) pipeline project that was signed in the Iranian port city of Bushehr in June 2011, shortly after the Syrian uprising began. The pipeline is configured to pump around 40 billion cubic meters annually, drawn mainly from Iran’s giant South Pars gasfield, towards Syria’s Mediterranean port of Tartus, and home to a Russian base.
As it develops, there is a proposal that the pipeline can branch along an undersea section into Greece — the country where a node of Russia’s Europe-bound South Stream pipeline is also planned. If Greece becomes the junction for the two pipelines to merge, it will extinguish the western dream of pumping Persian Gulf gas into Europe along an independent route that is outside Moscow’s control.
Iran is also well located to magnify its role as an energy provider to China and India. In a visit to New Delhi within hours of the signing of the Geneva agreement, Iran’s Deputy Minister for International and Commercial Affairs Ali Majedi revived the proposal of the Iran-Pakistan-India (IPI) gas pipeline. Significantly, he recommended IPI’s extension to China, providing a marginalised India an opportunity to lock itself in the Eurasian Great Game.