With U.S. President Donald Trump’s unilateral withdrawal from the nuclear deal signed between Iran and the P5+1 countries in May 2018, Iran’s nuclear activities have moved to the top of the international agenda again. While the two-stage sanctions imposed by the United States began to be implemented in November and targeted the country’s economic infrastructure, some countries were granted a six-month exemption, especially on oil sales. The six-month exemption granted to Iran’s major oil importers such as China, India and Turkey ended in May this year. Negotiations between the countries that were granted exemptions and the U.S. did not reach any conclusion. Thus, these countries subsequently made statements that they had stopped purchasing oil from Iran.

Trump’s unilateral withdrawal from the multilateral agreement, which had a tremendous impact in the international community and had been approved by the UN Security Council, was met with great reactions by many countries. In the statements made after Trump’s withdrawal, EU countries in particular emphasized the importance of the agreement and indicated that they were behind it. However, pressure exerted on different actors by the U.S. in the past year has yielded desirable results for the Trump administration. For instance, the INSTEX mechanism, which was expected to allow European countries to eliminate Iran’s commercial concerns and allow for money transfer without encountering U.S. sanctions, was born dead after one year of effort. On the other hand, in the one year period that passed, almost all large European companies withdrew from Iran and there was a 80% decrease in the trade volume between the continent and Iran. Therefore, even if the aforementioned mechanism had worked, it would not have been functioning effectively since there were not many companies pursuing business with Iran.

In one year, almost all large European companies withdrew from Iran and there was a 80% decrease in the trade volume between the continent and Iran.

Iran sanctions and Turkey

Just like other countries with close political and economic relations with Iran, Turkey stated that the U.S.’ unilateral withdrawal from the Nuclear Deal was not right and that sanctions imposed on Iran were unacceptable. In this respect, it can be indicated that Turkey’s Iran policies in the last year have been overlapping with Ankara’s policies with other important actors such as the EU, Russia and China. This can be summarized as giving theoretical support to Iran but not taking steps against the Trump administration in sanction areas such as oil export or money transfer, which the U.S. is sensitive against. For this reason, Iranian Deputy Foreign Minister Abbas Araghchi, who failed to find the support he expected during his visit to Europe, stated that Tehran expected concrete steps to be taken rather than political support during his visit to Turkey. An important factor that should not be disregarded in Turkey’s cease of oil purchases from Iran is that the country’s biggest client, Tüpraş, is a private company and makes decisions in line with its own strategy rather than the government’s political stance – just like many other European and even Russian companies.

However, there are also other factors to take into account in order to understand Turkey’s frustration on the Iran sanctions. Bilateral relations between Turkey and the U.S. hit bottom low with the failed July 15, 2016, coup attempt, which was implicitly supported by the Obama administration. Relations between the two countries have not yet reached the desired level despite the remedial steps taken. Trump’s own demands such as withdrawing from Syria and minimizing relations with the YPG were stuck in the security bureaucracy around him. These bureaucrats are known to hold negative views on Turkey.

Turkey has many problematic policy areas with the U.S. and the country did not want the issue of Iran sanctions to be added to these.

Crises such as the Halkbank case and the S-400/F35 issue, which have been ongoing since the Obama period, have been the main obstacles in transforming Ankara’s principal attitude towards Iran into practice. To be clearer, Turkey, which has many problematic policy areas with the U.S., did not want the issue of Iran sanctions to be added to these. Considering the disputes on military equipment purchases and the Israeli plan of expansion, also known as “Deal of the Century” will increase current tensions between the U.S. and Turkey, the Turkish government’s pursuit of a flexible policy on the issue of Iran is a very understandable attitude.

The peak in tension between the U.S. and Iran

Hassan Rouhani’s statement in May where he announced Iran’s counter-measures and stated that they would resume sensitive nuclear activities, particularly uranium enrichment, two months later if the economic expectations of Iran were not met, increased tension in relations between the two countries. However, the real alarming development was the attacks on the important oil facilities and tankers in Saudi Arabia and the UAE, in a way that reminded of the threats made by Iranian officials on the lines of “If we cannot sell oil from the Gulf, nobody can.” These attacks on the most important supporters of Trump’s anti-Iran policies and the simultaneous mortar attacks near the U.S. embassy in the secure Green Zone in Baghdad showed that the political tension could turn into a military conflict.

As a result of the regional visits made by U.S. officials, sending additional troops to the region and mediation attempts made by Iraqi officials, the tension has been settled to a great extent. More, criticisms made against National Security Advisor John Bolton, who is known as the architect of the hawkish anti-Iran policies, before the cameras, eased tension for now. Yet, there is still curiosity regarding whether Japanese Prime Minister Shinzo Abe’s visit to Tehran (who had been visited by Trump recently), will lead to a conciliation. If a positive result does not find ground from the prospective visit, and if Iran resumes nuclear activities in July, tension may escalate again.

In fact, the main problem in bilateral relations was the gap between the expectations of the parties rather than the lack of mediation attempts. After Trump left the deal, Secretary of State Mike Pompeo’s setting out of the “conditions for normalization,” which targeted Iran’s regional and defense policies, tools and non-state allies, the designation of the Revolutionary Guard Corps – Iran’s most important security agency – as a foreign terrorist organization, and sanctions imposed on several state officials were effective in terms of Iranians reaching to a consensus about who the real target was. As a matter of fact, even President Rouhani, who is known as a moderate in Iran and who has made his willingness to negotiate with the U.S. explicit on various occasions albeit indirectly within the last process, has emphasized in his statements that the ultimate goal of the Trump administration has been a regime change in Iran.

The political tension between Iran and the U.S. can turn into a military conflict.

Accordingly, statements made by Trump, such as, “We just don’t want them to have nuclear weapons; it’s not too much to ask” or “Iran has a chance to be a great country with the same leadership” did not have much reflection in Iran. On the other hand, if Trump is serious in his statements, Iranian officials demand practical steps to be taken – such as extending exemptions in oil sales, the U.S. to return to the nuclear deal, or Bolton’s dismissal from office. In the absence of such a concrete step, it can be predicted that Iranians will maintain the risky strategy that they call “maximum resistance.”

In case the differences of expectation between the parties cannot be overcome in a short time by the influence of mediators, it can be predicted that the tension will escalate quickly. One of the main steps that Iran will take before an economic destruction like Venezuela is to put pressure on the U.S. by rapidly resuming its nuclear activities and secondly, by increasing its retaliatory attacks against the U.S. or, more likely, against its regional partners, in order to show that it does not refrain from the escalation of regional tensions. In this respect, the months ahead will be decisive. Yet, according to the commonly accepted view that is shared by many analysts, the Iranian economy is in a state that cannot resist in the face of zero oil exports. The financial crisis has already begun to influence the fighting capacity of its regional proxies. As a matter of fact, according to some Iranian commentators, Trump’s statement, “I don’t want war,” or his attitude of ignoring the sabotages in the Gulf is a tactical approach that aims to save time and prevent a military loss by making Iran kneel down on its knees.

Turkey’s stance towards Iran

Turkey maintains its stance that prioritizes Iran’s political and economic stability and keeps its distance from the regional polarization against Iran. Ankara has argued that the problems between Iran and the United States should be resolved through diplomatic negotiations and that heavy economic sanctions will not only affect the people of the country, but will also have an effect on regional peace and stability. As a matter of fact, suffering from great economic loss in the energy, tourism and export sectors, there has been an increase in the wave of migrants coming to Turkey from Afghanistan and Iran. 

Turkey maintains its stance that prioritizes Iran’s political and economic stability and keeps its distance from the regional polarization against Iran.

Turkey, which has experienced how the Iraq and Syria crisis opened space for the PKK terrorist organization, continues dialogue with all parties in order to prevent the Iran crisis from reaching a similar stage. It is therefore trying to closely watch the mobility in the field. The statement made by the Iranian branch of the PKK, PJAK, “We are ready to fight with Iran,” and the attack on the IRGC forces where one Iranian soldier was killed in the Chaldoran region and on the zero-point of the border, shows that the organization has an intention to maintain its legionary status regarding Iran. Due to this, it wants to turn itself into a more important position and permanent partner in the eyes of the U.S. and its regional allies. The organization has started to disrupt balance in U.S.-Iran relations, which until now, has been to the detriment of Iran. This is clearly an act of positioning.

Whether the Trump administration continues its policies of dragging Iran into economic bankruptcy or whether the tension between the two countries turns into a military encounter, it will undoubtedly become of the most important points on the agenda concerning all of the Middle East region. It is fair to state that this issue will also remain as a high priority foreign policy concern for Turkey.

Since the beginning of Trump’s presidency, the U.S. has put enormous effort to contain Iran in both political and economic terms. During his election campaign, Trump pledged to tear the nuclear deal (JCPOA) and his anti-Iran tone was pretty harsh. After his election, he started to realize his election promises one-by-one. His attitude towards international acts and agreements was uncompromising. The U.S. withdrew from the Paris Climate Agreement, Trans-Pacific Partnership (TPP), and UNESCO in 2017. JCPOA, which was formalized in 2015 by P5+1 countries and which began to be implemented in early 2016, was a target too. JCPOA was also binding in terms of international law since it was ratified as a UN Security Council resolution.

Trump’s general policy choice reflects a radical rupture from the priorities of the Obama era, and this is not an exception in the case of the Middle East. The president’s Middle East policy centers around various crucial themes. The most significant of them is containing Iran. For Trump, Iran has expanded its regional influenced during the Obama era thanks to the “worst deal ever made,” also known as the nuclear deal. According to Trump, by giving Iran lifeline support, JCPOA has paved the way for Iran’s “terrorist activities” along the region. Therefore, this should be stopped.

With the Trump administration, the U.S. government has launched a regime change discourse against Iran. The president has employed numerous anti-Iran figures in his team such as Mike Pompeo, John Bolton, Rudy Giuliani, and others.

The U.S. President’s policy is a pillar for other policies related to the Middle East. Saudi Arabia and other anti-Iran Gulf countries desperately seek Trump’s support in their endeavor to confront Iran. In this direction, the U.S. makes billion dollar arms deals with Saudi Arabia and supports every action against Iran in the region. Saudi Arabia’s Qatar move, which was directly against Iran and Turkey, also received U.S. support. The coordinated efforts of Israel and the U.S. function to undermine Iran’s political and economic power. Accordingly, I argue that Trump’s Iran policy has two dimensions – both politic and economic.

The nuclear deal and economic war against Iran

On May 8, Donald Trump announced that the United States has pulled out of the nuclear deal. He also announced that sanctions will be re-imposed by the U.S. soon. The first round of U.S. sanctions came into effect on July 7. These sanctions were primarily targeting Iran’s trade with precious metals, its import of auto parts, and commercial passenger aircrafts. But the most striking sanctions were imposed on November 5. The aim of these sanctions was to cut all oil exports from Iran and devastate the country’s economy. In addition to that, 700 individuals and companies were put on the sanctions list. In order to avoid serious backlash, the U.S. granted waivers to 8 countries, including Turkey. However, these countries will also be expected to cut their oil trade with Iran in a short period of time.

Trump was not alone in his campaign against Iran. Benjamin Netanyahu, the Prime Minister of Israel, also fully supported his decision of exiting the JCPOA. More, prior to Trump’s decision, he tried to persuade the international community that “Iran has lied” about its nuclear activities and that it “cheated.” Netanyahu, in his televised public performance a week before Trump’s announcement of U.S. withdrawal from the deal, claimed that Iran had lied when it said that it never chased after a nuclear weapon. He added that, “Even after the deal was made, Iran continued to preserve and expand its nuclear know-how for use at a later date.” His claim was based on an alleged secret operation conducted by MOSSAD to acquire “atomic archive documents” in a secret warehouse in Tehran. Netanyahu’s efforts were not limited to this performance. Again in September, when he stepped to address the UN General Assembly, he claimed that Israel had discovered another secret nuclear facility in Tehran and that he had proof of it. According to Netanyahu, Iran had equipment for developing a nuclear bomb in this facility.

Regime change discourse, Arab NATO, and the Warsaw Summit

With the Trump administration, the U.S. government has launched a regime change discourse against Iran. The president has employed numerous anti-Iran figures in his team, such as Mike Pompeo, John Bolton, Rudy Giuliani, and others. The State Department’s and Secretary Pompeo’s Twitter accounts work vigorously to disseminate regime change discourse among Iranians, be it diaspora or those living in the homeland. In addition to that, in 2011, the U.S. had launched its first Farsi language Twitter account in order to address Farsi-speaking Iranians directly. Pompeo and his team began to use this account to promulgate their position against Iran. All these efforts are signs of a public relation campaign to create a dominant discourse, which would produce an intended change in the Iranian government’s behavior.

Iranian women took off their hijabs and hang them on a stick during their protests in Tehran. Some Iranian diaspora, however, questioned the authenticity of these protests and the integrity of Masih Alinejad for having ties with U.S. neo-cons.

In this endeavor, the U.S. government takes any opportunity it can. U.S. Secretary of State Mike Pompeo met with Masih Alinejad, a famous Iranian-American social media activist. Alinejad runs the #whitewednesday campaign, which encourages women to take off their hijabs in Iran on Wednesdays and record it with a camera. Women share these videos on social media and Alinejad also promotes them on her own Twitter account. These videos go viral and show how Iranian women resist imposed dress codes. During the protests in January 2018, the Iranian women that took off their hijabs and hang them on a stick began to be called the “daughters of Revolution Street,” since their protests occurred on the revolution street of Tehran. However, some of the Iranian diaspora have questioned the authenticity of these protests and the integrity of Masih Alinejad for having ties with U.S. neo-cons. Pompeo’s meeting with Alinejad empowered the arguments of their critics. This move apparently shows how Alinejad’s campaign functions in a certain way in the regime change rhetoric of the U.S. administration.

Another policy that the Trump administration has adopted is trying to pull other countries on their sides against Iran. In that vein, the U.S. and Israel organized an anti-Iran summit in Warsaw on February 14. 60 countries were represented at the Summit. However, EU states sent their low-level diplomats and it disrupted the summit’s intended anti-Iran character. Robert Giuliani, former New York Mayor and one of Trump’s lawyers, said that he was representing Mujahedin-e Khalq Organization (MEK) at the summit. MEK is designated as a terrorist organization by Iran. It was once listed as a terrorist organization by the U.S. in 1997, but was then de-listed in 2012. In the recent years, Trump’s team has been coordinating with MEK members and their presence was so visible in so many occasions, including during the Warsaw Summit.

Robert Giuliani, former New York Mayor and one of Trump’s lawyers, said that he was representing Mujahedin-e Khalq Organization (MEK) at the anti-Iran summit in February in Warsaw. MEK is designated as a terrorist organization by Iran.

One of the functions of the Warsaw Summit was to create a base for a new regional security alliance against Iran. This has been articulated as the “Arab NATO” by some U.S. officials. Officially known as the Middle East Strategic Alliance (MESA), this planned organization would contain Iran militarily through six Gulf countries plus Egypt and Jordan. Netanyahu especially took the chance to bolster his anti-Iran position and convince other Arab countries “to advance the common interest of the war with Iran.” According to Mike Pence, along with Netanyahu, they “broke bread with leaders from Bahrain and Saudi Arabia.” Given the diplomatic gap between Israel and other Arab countries (it only has formal diplomatic ties with Egypt and Jordan), Netanyahu’s efforts were reflecting a significant re-orientation towards Arab countries in order to confront Iran.

Turkey’s stance

Turkey’s approach to the U.S. policy on Iran has not been changed from the very beginning. President Erdogan repetitively emphasized that Turkey needs Iranian oil and gas and that there are no alternatives for Turkey. Erdogan also condemned the re-imposed sanctions on the ground that they are against international law. The president’s remarks have been reiterated by a number of senior figures in the government. Despite the fact that the U.S. and Israel will increase their pressure on Iran, Turkey is likely to preserve its position.

Oman has long been known for its efforts to pursue a politically neutral position in the Gulf region. Close cooperation between Iran and Oman dates back to the pre-1979 Revolution period. The uprising that took place in Dofar in the early 1970s and targeted Sultan Qaboos was suppressed with the help of the Iranian Shah. The friendly relationship between the two countries has continued since then. Due to this close cooperation, the Omani leadership has tried to stay out of the existing political formation against Tehran.

This situation has been endangered in recent years due to the increasing competition between Saudi Arabia, the most powerful member of the Gulf Cooperation Council of which Oman is a member, and Iran. Tehran’s continuing expansionist policies in the region are considered as a threat for Saudi Arabia and its allies in the Gulf. In this regard, Riyadh has also put pressure on Oman to reconsider its relations with Tehran. Oman, however, is disturbed by this attitude of Saudi Arabia and did not want to be a party to political conflicts between these actors.

One recent aspect of Saudi Arabia’s pressure on Iran is the support of the Trump administration in the U.S. Recently, Trump announced his new package of sanctions, which are intended to further pressure Tehran. Washington is expecting Muscat to support these policies. It is important to mention that due to its strategic position in the Strait of Hormuz, Washington has attached importance to establish strong relations with Oman. The U.S. administration has signed a military cooperation and a free trade agreement with Muscat in order to deepen its relationship with this country.

Tehran’s continuing expansionist policies in the region are considered as a threat for Saudi Arabia and its allies in the Gulf. In this regard, Riyadh has also put pressure on Oman to reconsider its relations with Tehran.

The relationship between the two countries were so close that Oman played a role in mediating the crisis between the U.S. and Iran during the past decade. The Muscat administration has also taken action recently to find a solution to the crisis between Tehran and Washington. Omani Foreign Minister Yusuf bin Alavi bin Abdullah met with U.S. officials during his visit to Washington in July, where he made some efforts to prevent the deepening of the crisis between Washington and Tehran.

The recent visit of Israeli Prime Minister Benyamin Netanyahu to Oman is another sign of pressure that the anti-Iran alliance has been putting on Muscat. Israel is also one of the most eager supporters of the sanctions on Iran. When Netanyahu’s unscheduled visit to Oman is considered in this regard, it can be argued that Tel-Aviv also put pressure on the Omani leadership to comply with the U.S. sanctions.

However, the close cooperation between Oman and Iran leaves the Muscat administration in a dilemma for taking a serious stand against Tehran. One of the main reasons for this is the positive conclusion of the negotiations, which lasted about 10 years, for the natural gas pipeline project that is planned to be built between Iran and Oman through the Strait of Hormuz. The pipeline, which is planned to start from the port of Kuhmobarak in southern Iran and costs 1.2 billion dollars, will enable the transfer of 28 million cubic meters of natural gas per day from Iran to Oman. While Oman plans to use natural gas from Iran for its own needs, it aims to become an LNG exporter as well. Muscat also aims to diversify its economic activities and therefore the gas pipeline is of crucial important for this long-term projection.

The close cooperation between Oman and Iran leaves the Muscat administration in a dilemma for taking a serious stand against Tehran. 

All in all, there are three major dynamics that the Omani leadership had to consider when it comes to responding to the U.S. sanctions on Iran. First of all, the commercial, historical, and cultural relations between Oman and Iran are deeply rooted. Secondly, Oman’s close relationship with Saudi Arabia is of crucial importance and should not be damaged. Finally, Oman’s international allies such as the U.S. and Israel want Muscat to join them in their policies against Tehran. Considering these dynamics, the Omani leadership had to find a way to successfully respond to the rising tension between Iran and other regional and international actors. With its years of experience in neutral policies, one would consider that Oman would find a way to respond to this crisis with minimum damage to its existing priorities.

The Trump administration’s unilateral withdrawal from the nuclear deal signed between Iran and the P5+ countries last May, as well as its simultaneous announcement that it will be re-imposing sanctions in two stages in August and November, has carried tensions stemming from Tehran’s nuclear activities back to the top of the international agenda. While there are some technical details regarding the nuclear deal among Trump’s objections, “normalization requirements” announced later by Secretary of State Mike Pompeo show that the U.S. actually intends to achieve a new and extensive deal regarding all of Iran’s regional policies.

Trump is a “deal breaker.” The Trump administration has withdrawn from old agreements not only with countries traditionally regarded as rivals, such as China and Russia, but also with countries such as Germany and Canada, long-time close allies of the U.S.

The fact that on the global stage the Trump administration has withdrawn from old agreements and abolished old practices not only with countries traditionally regarded as rivals, such as China and Russia, but also with countries such as Germany and Canada, which the U.S. previously had maintained very close political relations with, illustrates the fact that Trump’s “deal breaker” attitude and tendencies to make attempts towards “changing the rules of the game” are not exclusive to the Iran nuclear deal. Moreover, according to many observers, these “rules of the new era” are not simply due to Trump. The state apparatus in the U.S. as a whole wants to shape the grounds on which a global system that will last until the second half of the 21st century will be built before it is too late.

Trump Administration’s actions and their consequences

An important portion of the sanctions Trump described as “toughest ever” were imposed in August and concern topics such as oil trade, insurance processes, and the use of sea ports. The more severe sanctions had been left to November to give any third-party countries with important trade relations with Iran time to adapt. The fact that the sanctions will be imposed on the 40th anniversary of the beginning of the Iran Hostage Crisis, where supporters of the Iranian Revolution took over the U.S. Embassy in Tehran, reminds us of the saying “actions have their consequences.”

With the warning that sanctions will take place in November, countries such as South Korea, Japan, and France stopped importing oil from Iran by September and even countries opposed to single-sided sanctions on principle, such as India and Turkey, have significantly reduced the volume of their trade with Iran. As the severe sanctions take effect it is seen as a certainty that Iran’s oil exports will fall from their level of 2.5 million barrels per day in May to below 1 million barrels. Due to this reason, the Iranian Rial has lost 65% of its value versus the dollar in a few months with labor strikes and other forms of protest already becoming commonplace in the country.

As the severe sanctions take effect, Iran’s oil exports will fall from their level of 2.5 million barrels per day in May to below 1 million barrels. Considering that the Iranian Rial has already lost 65% of its value versus the dollar in a few months, a serious economic breakdown is not unlikely.

Iran does not have many options to resist against the policy of severe economic sanctions the Trump administration has inherited from the Obama administration and continued in a harsher manner. Even though many countries support Iran politically on this matter, with some EU members even trying to build alternative payment methods to bypass threats of sanction violation penalties from the U.S., it will not be easy for any such action and measure to help Iran access the global financial system.

Especially considering U.S. National Security Advisor John Bolton’s announcement that if the sanctions of November do not have the expected effect unspecified measures may be employed, means that the Trump administration wants to resolve the Iranian matter as quickly as possible. Thus, Iran – as the Iranian Minister of Foreign Affairs Zarif has expressed – keeps employing backdoor diplomacy channels in the hope of reaching to a point of agreement with the U.S., despite its persistent tough public stance. On the other hand, the Rouhani government has been implementing monetary transparency laws and measures such as FATF despite the internal opposition to render the excuses of the U.S. ineffective.

Iran sanctions and regional policies

Moreover, the heavy economic sanctions aiming to reduce Iranian oil exports to zero are not the only tool that can put pressure on Iran. On September 22, an Iranian military parade held in the city of Ahvaz, which has an Arab majority and is rich in petrol reserves, was attacked and two different organizations claimed responsibility for the attack. Prior to this event, there were heavy clashes along the Iraqi border between separatist Kurdish organizations and Iranian security forces.

The fact that influential people close to the Trump administration are often actively participating in meetings of organizations such as the People’s Mujahedin of Iran shows that the siege on Iran may continue via different manners. Similarly, we must take note of the proliferation of organizations opposed to the Iranian regime founded abroad as well as international news stations being broadcast in Persian and aimed at the Iranian public, along with the efforts to make Reza Pahlavi, the eldest son of the last Shah of Iran, a more prominent public figure.

It can be seen that the U.S., while officially telling Iran that it has no plans of regime change, intends to signal that it has a limit to its patience and in case that Tehran does not comply with an important portion of the demands put forward then regime change will not be off the table. Hassan Rouhani pointed out this fact in a speech held on October 13, the beginning of the academic year, at Tehran University, and stated that the ultimate goal of the U.S. in Iran is regime change and it will not succeed in this goal.

It will not be wrong to claim that in terms of regional policies some of the U.S.’ regional allies have found courage due to the Trump administration’s policies. Especially Saudi Arabia and Israel seem to want to resolve the Iranian threat for good during Trump’s tenure. It also seems possible that Trump, just like with the NAFTA deal that he previously called “very bad” and then renewed, might be open to sign a new agreement that does not entirely exclude Iran from the regional equation with the intention to use it during the U.S. elections. So, not disregarding the possibility that the KSA-Israel-UAE triangle may cause provocations with the hopes of escalating military tensions between Iran and the U.S., the Tehran administration refrains from making any moves that may cause unrest in the region in practice despite its high-pitched threats.

This is why despite Tehran’s threats after the Ahvaz attack, it did not take any action against Saudi Arabia or the UAE, and in contrast to its response to the evacuation of Aleppo in 2016, it did not object to the agreement between Turkey and Russia regarding Idlib and stated that it will respect the agreement despite not being part of it. Similarly, in its meetings with European countries, Iran signals that it is ready to stop the conflict in Yemen and use its influence on Houthis in case a mechanism that will ease the pressure of sanctions and allow the continuation of international trade is put into place.

Again, Iran’s support for the creation of the Iraqi government with names that are more in line with the U.S. and the West rather than names under its control such as Maliki and Amiri is another important point. All these moves indicate that Iran intends to ease regional tensions in the short term and focus on the ongoing economic crisis in the country.

Iran’s intentions to ease regional tensions and get along with its neighbors will reflect positively on Ankara-Tehran relations despite being due to external pressure.

Iran’s intentions to ease regional tensions and get along with its neighbors will reflect positively on Ankara-Tehran relations despite being due to external pressure. Especially the reduction of disputes regarding Iraq and Syria, as well as a potential economic role Ankara might play in a time when economic sanctions weigh heavy on Tehran, along with the rising price of maintaining a relationship of cooperation with Saudi Arabia, which has proved itself as an unpredictable actor first due to its blockade on Qatar and later an even bigger scandal despite Turkey’s patient show of good will, will lead to a relative improvement in Turkey-Iran relations even though relations have historically been constrained to a narrow trend with little change.

Negative scenarios regarding Iran sanctions

Possible consequences of the sanctions imposed are not all positive scenarios for regional politics. If private talks between the U.S. and Iran do not yield any results and the hopes of a political resolution are ditched and/or European countries, in the announcement they are expected to make in the following days regarding the new financial mechanism, fail to satisfy Tehran’s expectations, tension in the region can continue to rise. In this case, as discussed above, the countries that constitute the regional leg of Trump’s strategy regarding Tehran can make unexpected moves to provoke Iran.

The possibility that Tehran might give up hope of a political resolution for reasons such as the crippling economy due to sanctions, increasing pressure from regional rivals and internal opposition provoking street protests, may cause U.S.-Iran tensions to rise to their highest level of the last 40 years.

Tensions with Iran can be directly caused by the U.S. intervention. For example, the military operation the U.S. is expected to conduct against Al-Hashd Al-Sha’abi (Popular Mobilization Units – PMU) in Iraq, which was postponed due to Iraq being in the process of forming a government can begin. Israel, which claims that Iran has begun to move missiles to Iraq like Syria, can conduct direct operations against Tehran’s proxies in Iraq like it does in Syria. This situation can result in a severe and bloody period in Iraq similar to that of 2005-2007. In this case, Iran and its allies can take concrete action against U.S. troops stationed on the east of Euphrates, which is an issue Iran has been extremely vocal about.

The possibility that Tehran might give up hope of a political resolution for reasons such as the crippling economy due to sanctions, increasing pressure from regional rivals and internal opposition provoking street protests, may cause U.S.-Iran tensions to rise to their highest level of the last 40 years, and this situation would have severe consequences for the entire region, including Turkey.

On Wednesday, the highest court of the United Nations ordered for the U.S. to lift some of its sanctions that might hurt the import of humanitarian goods or services or adversely affect the safety of civil aviation on Iran.

In the Hague, the International Court of Justice ruled in favor of Iran, ordering for the U.S. to “remove by means of its choosing, any impediments arising from” the re-imposition of sanctions on medicine and medical devices, food and agricultural commodities, and spare parts, equipment, and associated services needed for the safety of civil aviation.

While the ruling is legally binding on the U.S., the Trump administration has increasingly publicly questioned the authority of such international institutions. Therefore, there is no clear distinction as to whether the U.S. will follow the ruling.

Iranian Foreign Minister Javad Zarif hailed the court ruling.

He tweeted, “Another failure for sanctions-addicted USG and victory for rule of law. Imperative for int’l community to collectively counter malign US unilateralism.”

In May this year, President Trump withdrew the U.S. from the nuclear deal reached with Iran and the permanent members of the UN Security Council during the Obama era.

Following this withdrawal, he reinstated U.S. sanctions on Tehran, which had initially been lifted under the terms of agreement in exchange for restrictions on Iran’s nuclear energy program.

Many countries, including leaders of the European Union (Germany and France) and other countries such as Turkey have criticized the U.S. insistence on sanctions on Iran.

While Trump insists on his sanctions on Iran, he has also imposed high-levy tariffs on China and Turkey, which have given birth to new global trade wars.

On August 6, 2018, U.S. President Donald Trump signed a new Executive Order named “New Iran E.O.” in order to re-impose sanctions. On the day the U.S. announced its withdrawal from the JCPOA, the U.S. Department of the Treasury determined two different ‘wind-down’ periods to indicate that the sanctions will gradually enter into force. Offering only one piece of the sanctions, the Executive Order aims to target companies that do business in different sectors that are central for Iranian business, such as the automotive sector. The other portion of the sanctions will come into effect on November 4, 2018 – the end of the 180-day wind-down period.

It is fair to state that the Trump administration is desirous of punishing the Iranian regime. However, the administration’s tough stance is, in fact, twofold. By framing a ‘zero’ policy, the U.S. administration not only intends to strain the financial capacity of the Iranian government, but also demands other countries to reduce their exports from Iran to zero. At this point, it is significant to differentiate sanctions as primary and secondary, of which the latter will indirectly and potentially treat U.S. allies as suspects of violating the sanctions.

When U.S. National Security Adviser John Bolton said that the administration intends to “say no waivers” in order to go beyond “where the sanctions were in 2015,” the administration apparently set the bar relatively higher than previous international sanctions. However, this zero policy can bring certain paradoxical consequences. If this policy will be a genuinely zero policy in the sense that the goal of the U.S. administration is to give irreparable economic harm to the regime, it needs to avoid using waivers to specific countries. Otherwise, the financial structure of the regime will be able to take a breath through the payments made by these countries that are awarded these waivers. In this first scenario, the collapse of the government, if very much desired by the administration, hardly appears in the short term. Therefore, the tough stance on the Iranian administration becomes questionable.

While the zero policy might appear as the only option for Trump, who is keen on bringing the Iranian government empty-handed to the negotiation table, the legal, political, and economic aspects of this policy are troublesome. Especially, in the global trade of crude oil, experts argue that the zero policy can force a significant amount of oil out of the market, leading to a drastic price change because of the high global demand for oil. In order to seek for a plausible way to minimize market disruptions to augment production, President Trump has approached  other allies such as Saudi Arabia. It remains difficult to assess to what extent juggling the production capacities of partners remains an effective plan. On the other hand, President Trump bemoaned the so-called “OPEC Monopoly” for raising oil prices. This implies that he can easily find a way to remove his guilt for the long-term high market price of oil.

When viewed from the legal and political angles of the policy, the picture is the same. The Department of Treasury, working with the Department of State and Department of Energy, will be the ‘guardian’ of the implementation of the sanction law. Transactions in U.S. dollars would suffice for the Department of the Treasury to claim extraterritorial jurisdiction to fine the individuals or entities having business ties with different Iranian sectors, such as energy and automotive sectors. It’s not a big hurdle for the Department of Treasury to impose fines or add individuals to the list of Specifically Designated Nations (SDN) based on evidence collected by intelligence or other means.

The more difficult challenge is related to the political outcomes of the decision to impose sanctions against countries. For instance, many major oil exporters from Iran are EU countries, Turkey, India, China, South Korea, and Japan. Unless they change their oil trade routes, they can be caught by secondary sanctions. The potential effect of the sanctions can be far-reaching, reaching U.S. allies, great powers, or developing countries. Furthermore, Iran’s geopolitical position, integrating the Middle East and Central Asia, will complicate the attempts made by neighboring countries such as Turkey to cut trade with Iran. This might obstruct the implementation of the zero policy if these neighboring countries prioritize their own economic and commercial interests in trading with Iran, rather than following the Trump administration’s demand to cutting all imports of Iranian oil.

The new Executive Order leaves many questions unanswered. The prime one is whether the U.S. would issue waivers from the sanctions if requested by its allies, which are unwilling to jeopardize or deteriorate their bilateral relationships with the U.S. Brian Hook, a senior State Department official, told reporters that the administration would consider waivers based on “case-by-case.” While this revives the hopes for many countries, it also brings to question the intended harsh effect on the Iranian regime.

The paradoxical situation is unlikely to be clarified in the future due to the fact that, just like the process in 2015, the current process is not clear. Unlike the current procedure, during the 2015 process, P5+1 countries sat at a table with Iran and the sanctions that were to be lifted were predictable. Nevertheless, receiving a waiver will be contingent on the negotiations to be held between the U.S. and its allies such as Turkey. For this reason, it would be beneficial for the two countries to solve existing problems rapidly and expediently in order to condense all of their focus on the future of sanctions that will come into full effect as of November 4.

The U.S. withdrawal of the Iran nuclear deal and the fresh round of sanctions imposed on Monday present a test to U.S. allies including Europe and Turkey. President Trump campaigned on getting rid of the “worst deal” ever, pulled out of the agreement, imposed sanctions on Iran and promised to isolate the country despite warnings by European allies as well as Turkey. Although President Trump made a rhetorical gesture to Iran’s President Rouhani about meeting face-to-face without preconditions, the U.S. is set to ratchet up the pressure and seek to isolate Iran ahead of the November elections. If anything is clear, Europe is less than thrilled about having to cooperate with the U.S. and states like Russia, China, and India will most likely continue to do business with Iran. Under these conditions, a renewed U.S.-Iran standoff in the coming months might have serious consequences not only for the region but for U.S. allies as well.

In the absence of a leadership, Europe will likely limit itself to protecting the financial interests of European companies but will not be able to produce a comprehensive deal.

European leaders have already expressed their dismay with the Trump administration’s decision to re-impose sanctions underlining that the deal had been working. Furthermore, they are working on providing legislative cover for those businesses adversely affected by U.S. action. The U.S. leadership has been touting Iran’s growing economic problems as part of the success of their pressure campaign but the Iranian regime survived heavy international pressure before. When it finally came to the negotiating table to make the 2015 deal, there was a broad unity among the P5+1 powers and others. The Trump administration’s unilateralist approach will, in all likelihood, be even less effective in isolating Iran and more punishing against U.S. allies.

The Trump administration says it is open to making a more comprehensive deal but declines to take the lead on forging a framework and doing the diplomatic heavy lifting. In the absence of such leadership, Europe will likely limit itself to protecting the financial interests of European companies but will not be able to produce a comprehensive deal. It is doubtful if it can save the Iran deal in any meaningful way. The element of surprise is a signature feature of the Trump presidency as we have seen the President declare his willingness to work toward no trade barriers with the EU. Yet, on Iran, he will most likely pursue a hardline policy until he can declare some sort of “victory.” This dynamic in the wake of November elections makes it almost certain that we will witness increased pressure on Iran and heightened regional tensions.

The Trump administration’s unprecedented sanctions and additional penalties imposed on Turkish entities for facilitating trade with Iran would deepen the divide, potentially setting the bilateral ties on a course of complete breakdown.

If the U.S. makes good on its promise to actually start penalizing companies doing business with Iran, Europe, as well as Turkey, will find themselves in a difficult position. Turkey relies on Russia and Iran for most of its energy needs and it cannot easily give up on especially Iranian natural gas. The Obama administration provided Turkey with waivers but doing business with Iran continued to be a significant source of tension in the bilateral relationship. It is not clear whether the White House will be willing to provide exemptions to Turkey but President Erdogan already indicated Turkey’s energy needs as his first priority on this issue. The Trump administration’s unprecedented sanctions on a NATO ally have already severely strained the Turkey-U.S. relationship and additional penalties imposed on Turkish entities for facilitating trade with Iran would deepen the divide, potentially setting the bilateral ties on a course of complete breakdown. Let us hope that the most recent talks between the two sides on the Iran sanctions produce tangible results and that they are not reversed by hasty decisions.

Finding a comprehensive solution to the standoff with Iran would remove a significant source of tension from the region but it will probably not be possible in the short and medium terms, barring a major reversal by President Trump or the Iranian regime. In the meantime, both Europe and Turkey will have to figure out a way to work with a unilateralist U.S. administration in order to protect their economic interests as well as energy needs. The already troubled Turkey-U.S. ties, however, will almost certainly experience the most duress as a result.