The Iranians can get what they want

Yesterday’s Middle East Institute event (above) on prospects for negotiations to end the Iran war was a good one. I’ll add here some footnotes, focused mainly on how people who study international negotiations think about the current standoff. And I’ll take a stab at a possible outcome.

There are basically two conditions for a successful negotiation to end a war:

1. A mutually hurting stalemate that convinces both parties they might do better at the negotiating table than continuing to fight.
2. A mutually enticing way out, which by definition includes guarantees of survival for the warring parties.

Neither of these exists today.

The Americans are hurting enough

The Americans are hurting enough for negotiations. President Trump began begging Iran for talks ten days ago. He is feeling increasing pressure to get out of the war he allowed Netanyahu to con him into.

Trump started the war without majority support and has continued to lose backing. Now no more than 40% approve of his handling of the conflict. That is not much bigger than his usual base and a far cry from domestic support for other recent wars. Any rational president would wonder whether he can expect approval for the $200 billion supplemental he is requesting from Congress.

Another, related factor, is the growing impact on the American and world economies. Oil prices are over $100d/barrel and natural gas prices in Europe up over 60%. Increased prices will slow consumer spending and growth. The effect of the war will be more dramatic in the Middle East than in Europe. And greater in Europe than in the United States. But Americans are notoriously sensitive at election time to gasoline prices, which are now averaging over $4/gallon. That’s up from less than $3. The November midterms are only 7 months in the future. Gasoline prices won’t come down fast.

The Iranians are hurting, but not enough

The Iranians have lost large quantities of military supplies and related industrial infrastructure. So they are hurting. But not enough to convince them that they could do better by negotiating. The Supreme Leader and his minions are insensitive to domestic political pressure and global economic conditions. Their ideology is based on sacrifice and martyrdom, not consumer or voter satisfaction.

The Iranians have not lost what their leadership values most: their sovereign rights and ability to resist. They have held on to their enriched uranium, their nuclear program, and their missiles and rockets. Iran’s Hezbollah allies are attacking Israel from Lebanon. The Houthis have started to attack from Yemen.

The Iranians aren’t going to give in to Trump’s bluster. Even the deployment of tens of thousands of American ground forces won’t have much effect. Iran has a population of more than 90 million and is three times the size of Texas. Anywhere the Americans deploy they will be sitting ducks in a vast sea of Iranian security forces.

The Iranians won’t give what the Americans want

While anxious for talks, the Americans have not been willing to change their demands. Their 15-point plan hasn’t been published, but it reportedly includes all the pre-war demands. Those included an end to the nuclear program and limits on missiles and Iran’s regional allies. That was unrealistic before the war.

Now it is pie in the sky. There is nothing there to entice the Iranians. That’s why the US is doing all it can to increase the military pressure. But the Iranians know how to take a beating. And they know life will not be easier if they give up their missiles and regional allies.

Nor will the Americans give what the Iranians want

As Alan Eyre said in the above event, the Iranians want two things: security and money. They no doubt see as clearly as I do that control over the strait can bring both. Security will come in the future from keeping the option to close the strait. You won’t find Tehran signing any guarantees to keep it open. Nor will they accept paper American guarantees not to renew the war.

Nor will the Americans agree to pay reparations, as Tehran has been demanding. Lifting sanctions, maybe. But Trump is already much criticized for allowing the sale of Iranian oil already loaded on board ships.

Instead Tehran will aim for international validation of a new regime for the strait. They will want to charge tolls, as the Portuguese did in the 16th century when they controlled it. The Iranians have already instituted this system for the few “friendly” ships they have let through. It is going to be very difficult to undo this once the Iranians open to many more, provided they pay.

This is not an enticing system so far as the US is concerned. Past presidents would have been concerned about maintaining the Law of the Sea norm of “transit passage.” That is a well-established international right for which no toll is paid. But Donald Trump couldn’t care less about laws, never mind norms. He likes getting paid for anything he can claim is his. I don’t put it past him to accept Iranian tolls on shipping in the strait of Hormuz. He might even say, “I like it. It’s what I would do.” Or maybe just: “If the Europeans don’t want to pay, the should do something about it.”

Ceasefire maybe, but not much more

Still, I doubt the US would accept this as a formal, written outcome. More likely is a ceasefire, during which the Iranians will experiment with their new regime for the strait. If they don’t charge prohibitive prices, many shippers will pay. The US will have little leverage to get them not to do so. Relatively few US-flagged commercial ships transit the strait. Washington will refuse to pay for US Navy and Coast Guard passage. But the Iranians can be wily and just keep an account for future claims.

A very large crude carrier (VLCC) today would be carrying $200 million worth of oil. Prices aren’t going down much soon. Normally, 15-20 of those go through the strait daily, plus another 100 ships of other sorts. Even at just 1% tolls, that could amount to $50 million per day. Or the equivalent of about 40% of Iran’s pre-war oil export revenue. Not bad from a revenue source that in the past produced zilch. And doesn’t cost much more than that to implement.

The Iranians can get what they want. Without an agreement.