On Nov. 5, the United States is set to impose crippling sanctions against Iranian oil exports—the country’s most important source of hard currency. Very quickly, Iran’s revenues could be slashed in half or even worse—a body blow to an economy already reeling from runaway inflation and rising unemployment. Popular discontent, manifest in widespread protests and labor strikes throughout much of 2018, is almost certain to deepen. As a result, the clerical regime is likely to come under greater economic and political stress in the coming months than at any time since rising to power in the 1979 revolution. As the Trump administration prepares to crank up the pressure even further and the walls continue to close in on Iran’s theocrats, U.S. officials would be well advised to consider how Iran might respond—and the steps they should take to deter, and if necessary defeat, any Iranian escalation.
Escalation is not inevitable. Since President Donald Trump’s May 8 announcement that the United States would pull out of the nuclear deal and reimpose sanctions, Iran has in fact demonstrated considerable restraint. It made a point of staying in the accord and maintaining its key restrictions on centrifuges and enriched uranium. Its strategy has been to exploit visceral European opposition to Trump’s Iran policy, posing as the victim of a lawless U.S. president who has flagrantly and unilaterally violated international commitments and norms.
However, it’s important to note that this initial Iranian response to Trump’s withdrawal was explicitly conditioned on the ability of the European Union to ensure that the deal’s economic benefits would continue to flow—with a special stress on Iran’s oil sales. In late May, Iran’s supreme leader, Ayatollah Ali Khamenei, warned that “European banks should safeguard trade with the Islamic Republic.”
“Europe should fully guarantee Iran’s oil sales. In case Americans can damage our oil sales,” he said. “Europeans should make up for that and buy Iranian oil.”
Despite the EU’s best efforts to foil U.S. sanctions, it has become increasingly clear over the past five months that it won’t succeed.
From an enhanced blocking statute to discussion of a special payments vehicle for maintaining Iranian trade, none of it appears likely to do much to blunt the force of the blow that is about to hit the Iranian economy. European companies have already abandoned the Iranian market in droves. And Iranian oil exports have recently begun to plummet—according to reports, by at least several hundred thousand barrels per day—even before U.S. sanctions have gone back into effect.
It’s still possible, of course, that despite the EU’s failure to satisfy Tehran, the Iranians will nevertheless decide that the better part of wisdom is to hold their fire. Lashing out certainly carries risks. It could alienate European governments and push them closer to Trump’s anti-Iran position. Even more dangerously, it could invite a painful, disproportionate military response from a highly unpredictable and volatile U.S. president. Under strong counsel from the Europeans, it’s possible that the Iranians could calculate that their best course is simply to sit tight, endure the sanctions while exploiting whatever loopholes exist, and wait out Trump’s presidency in hopes that he’ll be impeached by a Democratic Congress in 2019 or voted out of office come 2020.
In many ways, the United States has had the best of both worlds in recent months. Trump has withdrawn from the nuclear deal with Iran and is systematically going about the business of building a maximum pressure campaign to strangle the Iranian economy—all without Tehran ramping up its nuclear program or significantly escalating its persistent efforts to undermine and attack U.S. interests. Let’s hope this continues.
But, as the saying goes, hope is not a strategy. The administration should prepare for all contingencies—especially the bad ones. There certainly appears to be a deepening perception among Iran’s leaders that, despite protestations to the contrary, the Trump administration’s true agenda is regime change. With the U.S. economic noose set to tighten around their necks come November, it would be foolish not to plan for the possibility that, at some point, the hardened men charged with defending the Islamic revolution will not find a way to hit back.
If you’ve looked around in recent months, it’s certainly not hard to find an accumulation of worrying data points—in the form of both threatening statements and actions—that taken together suggest an escalation could be in the cards. In early July, Iranian President Hassan Rouhani, a supposed moderate, made several veiled threats against any U.S. attempt to stop Iran’s oil sales. “The Americans have claimed they want to completely stop Iran’s oil exports,” he said. “They don’t understand the meaning of this statement, because it has no meaning for Iranian oil not to be exported while the region’s oil is exported.” Weeks later, he was even more explicit, raising the prospect that Iran could retaliate by disrupting all oil flows through the Strait of Hormuz. “We have always guaranteed the security of this strait,” Rouhani warned. “Do not play with the lion’s tail—you will regret it forever.”
Each of these statements by Rouhani came alongside an even more bellicose threat from the two top generals of Iran’s most powerful military force, the Islamic Revolutionary Guard Corps (IRGC). The head of the IRGC, Mohammad Ali Jafari, sought to make clear that if the United States stopped Iran from selling its oil, no other Gulf country would be allowed to do so either. “We will make the enemy understand that either all can use the Strait of Hormuz or no one,” Jafari said.
Even more alarming were the statements of Qassem Suleimani, the terrorist mastermind who heads the IRGC’s most lethal unit, the expeditionary Quds Force. After Rouhani’s second warning triggered a blistering all-caps tweet from Trump to “never, ever threaten the United States again or you will suffer consequences the likes of which few throughout history ever suffered before,” Suleimani threatened the United States again. Addressing Trump directly, he said in a speech, “It is beneath the dignity of our president to respond to you. I, as a soldier, respond to you.” He derided U.S. military failures in Afghanistan, Iraq, and elsewhere in the Middle East and ominously warned Trump, “We are near you, where you can’t even imagine. … We are ready. We are the man of this arena.” He declared, “Trump should know that we are the nation of martyrdom and that we await him.” Suleimani concluded, “You know this war will destroy all that you possess. You will start this war, but we will be the ones to impose its end. … You know our power in the region and our capabilities in asymmetric warfare.”
This might be empty bluster. But when issued by professional killers responsible for the deaths of U.S. soldiers in Iraq and Afghanistan, no one should take it lightly. Especially when Iran has also engaged in a number of provocative actions in recent months against U.S. interests, in what could be interpreted as an effort to probe U.S. responses and vulnerabilities.
Even a short list, when compiled in one place, is very concerning. In early July, an Iranian diplomat was arrested in Europe for plotting to attack an opposition conference in Paris attended by prominent Americans, including Trump confidants Rudy Giuliani and Newt Gingrich. The next month, two Iranians were arrested in the United States on charges of spying for Iran, including surveilling Jewish centers in Chicago as well as Iranian opposition figures. In late July, Houthi rebels in Yemen, armed and trained by the IRGC, attacked a loaded Saudi oil tanker near the Bab el-Mandeb strait at the mouth of the Red Sea, resulting in a temporary suspension of the kingdom’s oil shipments through the world’s third-most critical shipping lane for oil.
Iranian provocations have appeared to accelerate over the past several weeks. In early September, a day after Iraqi protesters in the southern city of Basra torched the Iranian Consulate, rockets struck near the U.S. Consulate in Basra as well as the U.S. Embassy in Baghdad, missing both. The U.S. government quickly accused Iraqi Shiite militias commanded by the IRGC of being responsible. A day later, the IRGC conducted a precision missile strike on a building in U.S.-allied Iraqi Kurdistan where leaders of an Iranian Kurdish opposition group—that Iran claims is backed by the United States and Saudi Arabia—were holding a meeting, killing 11. At the end of September, there were more rocket attacks against the U.S. Consulate in Basra that the Trump administration immediately blamed on Iraqi militias “under the control and direction of the Quds Force leader Qasem Soleimani.” And on Oct. 1, in retaliation for an attack on an IRGC parade in Ahvaz, Iran, the Revolutionary Guards fired six medium-range ballistic missiles into eastern Syria near the Iraqi border, allegedly targeting fighters of the Islamic State but striking perilously close (within three miles) of U.S. troops.
In the event that Iran does decide on a major escalation, it’s hard to predict where it would choose to strike. Despite all the bluster about the Strait of Hormuz, it’s difficult to believe that the Iranians would attempt a head-on confrontation with the U.S. military. All of Iran’s leaders surely remember Operation Praying Mantis, when the United States responded to attacks on its ships in the Gulf by sinking a significant portion of the Iranian navy in 1988.
Far more likely is that Iran would respond indirectly. As Suleimani said, Iran’s money game is asymmetric warfare: the exploitation of proxies, terrorists, unwitting jihadis, and disaffected Middle Eastern Shiite populations. Covert actions to destabilize weak U.S. allies. Cyberattacks. Operating just beneath the threshold that would trigger a violent U.S. military response. Plausible deniability. That’s Iran’s real wheelhouse.
If Iran wants to cause massive disruption in global oil markets, it doesn’t need to take on the U.S. Navy in the Strait of Hormuz. It could, for example, simply take advantage of the widespread chaos and unrest in southern Iraq to have its militia proxies and their loyalists attack, sabotage, or otherwise paralyze operations at Iraq’s most important oil fields, pipelines, and export terminals. That could remove as much as another 3 million barrels of oil per day from international markets, triggering a potentially recession-inducing spike in world prices. Now multiply that by a factor of 10 if Iran successfully targeted critical oil infrastructure in Saudi Arabia through terrorism, cyberattack, or violent protests among the disgruntled Shiite majority that inhabits the kingdom’s oil-rich Eastern province—a scenario that policymakers have worried about for a long time.
Relatively small pockets of U.S. troops operating in close proximity with local partners in Syria and Iraq also offer ample opportunities—albeit perhaps more risky—for the IRGC to inflict real pain on the United States. Its vast array of proxy militias in both theaters are strong and capable. But it also no doubt has a multitude of other, more covert assets that it could use as cover to slowly bleed the United States and put to the test Trump’s staying power in a Middle East that he almost instinctively longs to abandon—including members of the Syrian and Iraqi security services, agents within the Kurdish communities, or among the Sunni tribes that inhabit the Iraqi-Syrian borderlands. There are no doubt others as well, perhaps even easily manipulated fighters from the Islamic State or al Qaeda.
These contingencies only begin to scratch the service. Many more could eventually be possible—from strikes by Iranian-backed terrorist networks around the world, including North America, to the gradual resumption of Iranian nuclear activities beyond the limits of the 2015 deal. The Trump administration needs to determine which of these scenarios are the most probable and develop strategies for effectively dealing with each of them, including through advance coordination with allies and deploying necessary resources and enhanced capabilities to the region.
Trump, Secretary of State Mike Pompeo, and National Security Advisor John Bolton have all issued recent statements, of varying specificity, putting Iran on notice that it will face severe consequences for any attacks on U.S. interests. The toughest and most all-encompassing came from Bolton in late September when he warned Iran, “If you cross us, our allies, or our partners; if you harm our citizens; if you continue to lie, cheat, and deceive, yes, there will indeed be hell to pay.” Conspicuously missing from this chorus, however, has been Defense Secretary James Mattis. It goes without saying that it would be helpful to have the senior official charged with the command and control of U.S. forces, especially one with Mattis’s military stature, strongly reinforcing the administration’s deterrent message with respect to any Iranian escalation.
Yet of at least equal significance is the need to convince Iran that its failure to heed U.S. deterrent warnings will trigger a swift and disproportionate response—one that imposes costs far higher than any benefit that escalation might achieve. It’s also important that Iran be made to believe that its traditional tactics won’t be allowed to work, that the U.S. evidentiary threshold for attributing blame and retaliatory action won’t be excessively high, and that the sins of the proxies and cutouts will definitely be visited on Iran itself.
Certainly, at a minimum, the United States should make every effort to avoid mixed signals that undercut the clarity of the deterrent message. Two recent incidents were particularly concerning in this regard. First, the decision in late September to evacuate U.S. personnel from the Basra consulate in the face of the rocket attacks attributed to the IRGC. While Pompeo issued a statement threatening harsh punishment for such attacks, the only visible action the United States actually took was to send its diplomats packing under fire. The second incident was the Pentagon’s decision to withdraw several U.S. missile defense systems from the Middle East this month and move them to Asia. Whatever technical sense the announcement may have made, it hardly conveyed to the IRGC the kind of resolve and strength that the United States should be looking to exhibit in the lead-up to the reimposition of harsh sanctions.
The return of crippling sanctions on Iran’s oil exports will almost certainly mark an important moment in the long saga of U.S.-Iranian relations. No one can say for sure how Iran might respond. But anytime you openly set about putting a target on the back of a brutal enemy regime, you need to be ready. The Trump administration has thrown tremendous time and energy into ensuring that its campaign of maximum economic pressure backs Iran into a strategic corner from which there will be no escape (from Iran’s perspective) except capitulation. Given the nature of the Iranian regime, that policy makes considerable sense and has a compelling strategic logic—but only if the administration has in fact done its homework and put equal effort into planning for how to deal with Iran’s revolutionaries should they decide not to stand pat or back down but to escalate and fight instead.