The oil and gas industry should know more than has been made public so far about the U.S. government's efforts to isolate Iran. In subsuming trade and investment interests of a global industry to a developing foreign policy, the administration of President Bill Clinton has crossed an important line.
Goals of that foreign policy may be sound. Iran's transgressions may warrant a ban on trade in its oil and on investment within its borders by U.S. companies and their foreign branches. What the government has communicated about those transgressions, however, is vague. For an international industry, the implications are huge.
THREE ALLEGATIONS
The Clinton administration makes three allegations about Iran, all very serious. Iran, it says, is the No. 1 state sponsor of terrorism. It seeks to disrupt the Middle East peace process. And it is trying to acquire nuclear weapons. If all these charges are true then Iran is, as a senior administration official said in a background briefing before Clinton announced the new sanctions, "one of the most serious threats that we face in regional terms and beyond."
To such a threat, however, trade and investment sanctions don't add up to much of a response. As stated by the administration, the problem is military in nature and urgent. Yet the response is commercial in nature and guarded, a fleeting inconvenience to Iran, the burden falling mainly on companies forced to rearrange trading patterns and to withhold investments from Iranian opportunities that may arise.
Either the response is weak, or the U.S. is misstating the problem. A reason to suspect the latter is the administration's continued blaming of "Iran" for international mischief. Well, which Iran, exactly?
Is the administration of President Hashemi Rafsanjani sending money and supplies to terrorist groups as a matter of policy? If so, which groups? Or does the responsibility lie with Ayatollah Khameini, the spiritual leader, and his followers? All authority in Islamic Iran rests with Khameini, but the extent of his political influence is questionable. Maybe support for terrorists comes not from the government but from one or more of the several nearly autonomous "foundations" that have controlled much of Iran's economy since the Islamic revolution.
In such a fractious political system, mischief can come from many sources. And military posturing can have as much to do with internal politics as with aggressive intent. Refusing - at least publicly - to take Iranian complexities into account, the Clinton administration leaves no scope for a detailed assessment of behavior and responsibility. To the administration, there is one Iran, a radical Islamic monolith that misbehaves internationally. It's a policy of demonization, no more sophisticated or proper than Iranian radicals' ludicrous posturing against the U.S. This is partly why it has received so little support from U.S. allies in Europe.
A PERPLEXING NATION
Foreign policy is difficult for any government to get right, especially when it applies to so perplexing a nation as modern Iran. The oil and gas industry usually gains most by leaving it in official hands. This time, though, officials have conscripted U.S.-based companies into service of a policy that may be flawed and that ultimately could cost them much.
Companies deserve a say in any policy to which they must make commercial sacrifice. If they don't demand influence with, or at least a reasonable explanation of, the U.S. stance toward Iran, they can expect to play the commercial pawn again in some future foreign policy dispute.
Copyright 1995 Oil & Gas Journal. All Rights Reserved.