During the G7 summit in Biarritz, U.S. President Donald Trump told French President Emmanuel Macron that the U.S. is not looking for leadership change in Iran. “This country has been through that many times before; that doesn’t work,” he said. This is a hopeful sign for the proposed dialogue between Washington and Tehran, after months of increasing tensions. The U.S. President, who had once sought to cut Iran’s exports to zero, even suggested that the U.S. and its allies could offer Iran loans or some credit as incentive for reaching a new nuclear deal.
These overtures signal a marked departure from Mr. Trump’s position on Iran in the past. In May 2018, the U.S. withdrew from the 2015 nuclear agreement reached between the P5+1 countries, the European Union, and Iran, which Mr. Trump once derided as the “the worst ever deal”. That move was in disregard of the opinions of the International Atomic Energy Agency and Mr. Trump’s own top advisers that the Joint Comprehensive Plan of Action had proved effective. If followed through with action, Mr. Trump’s recent comments could strengthen the efforts of the U.K., France and Germany to secure relief for Iran from U.S. sanctions and prevail upon Tehran to desist from its recently revived uranium enrichment activity.
Iranian President Hassan Rouhani was not impressed by Mr. Trump’s remarks. He ruled out talks with the U.S. until all sanctions were lifted, though he has immense stakes in rebuilding the agreement and reasserting his moderate position at home. He added that he was not interested in photo opportunities, an apparent swipe at Mr. Trump’s high-profile summits with North Korean leader Kim Jong-un, which yielded few concrete outcomes.
His condition for talks is understandable, however. Iran has had no relief on the sanctions front, despite opposition from the European Union, Russia and China to the punitive measures. The European payments channel, Instex, launched after much delay to circumvent U.S. sanctions, serves a limited purpose, as the system does not include oil sales, a major source of Iran’s foreign exchange earnings. Tehran’s crude exports are said to have plummeted to 300,000 barrels per day (bpd) or less since April 2018 levels (more than 2.5 million bpd), according to estimates. Corporations that continue to do business with Iran face the risk of being cut off from the dollar system.
There has not been any let-up from the U.S. strategy of exerting “maximum pressure” on Iran so far. Earlier this month, the administration imposed sanctions against Iranian Foreign Minister Mohammad Javad Zarif. In June, Iran reacted to sanctions against Ayatollah Ali Khamenei, Tehran’s Supreme Leader, as “outrageous and idiotic”. And in April, the country’s Islamic Revolutionary Guard Corps was designated a terrorist organisation.
In retaliation to these measures, Iran demonstrated its ability to paralyse Western maritime operations by seizing oil tankers off the Gulf of Hormuz. While Mr. Trump held back from a counter-offensive following the downing of a U.S. drone, the missile attack amplified the risk of conflict in the region.
Neither Secretary of State Mike Pompeo nor National Security Adviser John Bolton would easily reconcile to Mr. Trump’s remark that regime change in Iran is off the table. But Mr. Trump, not for the first time, has come close to pushing back against the hardliners in his administration. Following through on his proposal, France has confirmed the finalisation of a $15 billion credit line backed by France, Germany and the U.K., subject to Washington’s approval. While this initiative will boost Iran’s confidence in the West’s intentions, the ultimate goal must be to revive the 2015 nuclear deal. President Rouhani’s position has weakened in Iran as hard-liners have become more assertive in the country. Unless he is also able to isolate them, moving forward on the deal will not possible.
Garimella Subramaniam is a Deputy Editor with The Hindu