A nuclear armed Iran could be the price of the Libya campaign

From The Commentator, 7 June 2011, by Emanuele Ottolenghi*:

Iran is emerging as the great beneficiary of a bombing campaign over Libya with little strategic benefit to the West...

Say what you will about the wisdom of NATO’s Libya bombing campaign but nearly three months since it started, its unintended consequences have seriously damaged American-led efforts to stymie Tehran’s nuclear ambitions.

It has done so in three ways:

• the Libya operation has distracted Western diplomacy from the Iran file, despite the fact that Iran’s nuclear program continues to advance unimpeded by external pressure or internal threats to regime survival;
• it has driven up Iranian oil sales and revenues; and, crucially,
• it has driven down incentives for Iran to negotiate.

...Regardless of its outcome, Libya’s regional impact will be negligible for Arab democratisation. But Western intervention has already doomed Western policy vis-à-vis Iran to failure.

At the simplest level, the diplomatic energy and political attention devoted to Libya by NATO, the EU and the United States mean there is less time available to discuss and think about Iran.

Yet, Iran’s nuclear program has not stalled because of mass protests in Cairo or F-16’s over Tripoli. As the latest International Atomic Energy Agency (IAEA) report shows, Iran has now accumulated over four tonnes of Low Enriched Uranium (enough for four small nuclear devices), it has successfully tested military components of nuclear weapons, and it continues to reduce the ability of IAEA inspectors to monitor its nuclear activities.

Recently enacted sanctions were meant to slow down Iran’s nuclear clock because of the strain they would put on Iran’s economy and the added impediments to the country’s procurement efforts.

Though the impediments remain, the Libya crisis has eased up economic pressure by making oil prices soar due to the removal of Libyan oil from the market and the attendant supply uncertainty.

For Iran, this is a blessing – Iran’s budget is pegged to an $81.50 a barrel price tag. Anything above that benchmark is a bonus for Iran and a setback in the U.S. sanctions architecture since, quite simply, Tehran is able to dilute the financial damage caused by sanctions thanks to increased oil revenues. (At the time of writing Brent Crude was hovering around $114 a barrel.)

The disruption of supply from Libya has had another unintended consequence: increased European oil dependence on Iranian crude and stronger Iranian-Turkish bilateral relations at a time when Turkey’s government is already hesitant to comply with the international sanctions’ regime.

Several European consumers of Libyan oil are now buying more Iranian crude in order to offset sudden shortages caused by the Libya operation. So is Turkey – whose national oil company was hugely invested in Libya’s energy sector. More sales and higher prices, then, mean more revenue for Tehran, less political leverage for Iran’s customers and less bite for sanctions.

Beyond disruption to the oil markets, the Libya crisis has had another unwanted effect on the current nuclear standoff with Iran. Until March 17, 2011, when NATO strikes began, Libya offered conclusive evidence that even an erratic dictator like Gaddafi, who in 2004 was on the brink of nuclear weapons’ capability, could perform a sound cost-benefit analysis on his predicament and renounce nuclear weapons in exchange for international rehabilitation.

For those unwilling to recognise that the ouster of Saddam Hussein played a significant part in Gaddafi’s calculus to renounce his sponsorship of terrorism and turn over his nuclear program to the West in exchange for political and economic rehabilitation, Libya was proof of the greatest non-proliferation coup that diplomacy could envision.

Moreover, the Libya precedent vindicated policy on Iran. If Gaddafi, who appeared even more erratic and irrational than Iran’s Supreme Leader, Ali Khamenei, or his puppet president, Mahmoud Ahmadinejad, could do cost-benefit analysis, so could Iranian leaders.

Now, Libya can only serve as a precedent to bury that notion since Gaddafi’s calculus rested on the assumption that renouncing his nukes would save his regime. By turning on Gaddafi as soon as Gaddafi turned against his people, the West is now giving Iran an incentive to keep its nuclear programme, and not to trade it in for unreliable guarantees.

By looking at Gaddafi’s fate they will surely conclude that keeping the programme alive might offer a better shield than the kind of nuclear quid-pro-quo that, as in Gaddafi’s case, might ultimately be undone.

Why would Iran think its own fate would be different?

None of this means that Gaddafi should stay. But it does mean that the West now has no option but to go after Iran’s rulers.

As with Libya, Western policy towards Iran’s ruthless dictators has been a futile quest for compromise.

This is not to say that NATO should immediately initiate a bombing campaign over Iranian skies too. But, in President Obama’s words, that “cannot be an argument for never acting on behalf of what’s right”.

Simply expecting the Iranian regime to change its behaviour is doomed to fail. Western leaders should now be looking to change the regime itself.

*Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies and the author of Iran: The Looming Crisis (Profile Books, 2010)