The next chapter in the US-Iranian confrontation will undoubtedly fall upon Europe. Angered by US sanctions on its foreign minister Mohammad Javad Zarif and by what it perceives to be failed promises from Europe, Iran intends to issue an ultimatum to countries signed up to Instex, the special purpose vehicle for trade. The ultimatum is likely to give the Europeans until mid-August to activate Instex for oil revenues, or Iran will swiftly withdraw from the nuclear deal. Tehran’s goal is to push the Europeans into compelling Washington to agree to its demands, even if through a partial side deal that would allow Iran to sell its oil through the European trade mechanism. The risk, however, is that the Trump administration might refuse to bow down to what it will likely see as blackmail of its partners and a clear attempt to drive a wedge between the US and its European allies. In that case, this would increase the likelihood of military action – something that Tehran is preparing for.
Yadullah Jawani, political deputy to the Islamic Revolutionary Guard Corps commander, vowed that if Washington made any miscalculation against Iran, Tehran would be at the forefront of a regionwide response, involving proxies “from the Eastern Mediterranean to the Red Sea, the Arabian Sea and the Gulf of Aden”. Israel seems to have expanded its operations against Iranian deployments to Iraq in addition to Syria. Israel has also threatened Lebanon from the halls of the UN Security Council, insinuating that it would target Beirut’s seaport amid claims Hezbollah is using it to smuggle Iranian arms, which is denied by Hezbollah leader Hassan Nasrallah. In Iraq, reports this week suggested Israel had attacked Iranian positions with a view to undercut the Iranian project to establish a land corridor to the Mediterranean via Syria and Iraq.
Israel and Iran are already engaged in wars by proxy in Syria and Lebanon. Should a war between the US and Iran erupt, this equation could change in a radical way, with Israel in direct confrontation with Iran. Yet even if a US-Iranian deal is struck, Israel seems intent on aborting the Iranian project in Lebanon, Iraq and Syria, whether through accords or military operations. On the other side of the trenches, Iran continues to issue threats and mobilise its armed proxies from the Mediterranean to the Gulf. Despite operating irregular armies and militias in sovereign Arab countries, Iran’s actions are met with few protests from the UN, the EU, Russia, China or India from the perspective of violating international law.
US sources familiar with the workings of Instex say there is a big gap between how Iranians understand the mechanism and how Europeans see it. The EU, they say, has tried repeatedly to make it clear to the Iranian side that it has too many expectations of the mechanism and that its goal is not to circumvent US sanctions but to facilitate legitimate trade in relation to humanitarian goods.
The US Treasury has been clear that any attempt to skirt sanctions by any entity will be faced with penalties. This position has prompted European banks and businesses, especially in Germany, to pull the brakes on any possible push by their governments to comply with Iranian demands.
The US position on relaxing restrictions on Iran, meanwhile, are almost always accompanied by tough positions. US National Security Adviser John Bolton, commenting on Washington’s decision on Wednesday to exempt three Iranian civilian nuclear facilities from sanctions, said this was a “short 90-day extension only”.
US President Donald Trump’s policy is proceeding on parallel tracks: sanctions and maximum pressure on one hand, and on the other, giving the Europeans some time to convince the Iranians to negotiate by granting such exemptions. However, any exemptions within the Instex framework will not touch on core sanctions and will be based on humanitarian goods, according to sources.
Mr Zarif, whose signature smiling diplomacy charmed Americans and Europeans during Barack Obama’s tenure, seems to have now exhausted the patience of the US. Indeed, he has switched from diplomacy to threats, showing his true colours. Some have described him as a loose cannon. But this does not mean that the Europeans are on board with the US sanctions on Mr Zarif, with many expressing concerns about the very principle of sanctioning a chief diplomat.
However, what the Europeans do not accept is Mr Zarif’s warnings against Washington’s interference in Instex and threats to withdraw from the nuclear agreement. Nor do they accept Iran’s censure for their “failure” to convince the Trump administration to relax or lift the sanctions, at a time when Tehran is pressing ahead with its strategy of provoking Washington into military action.
Tehran could push the Europeans into the lap of the US, especially when it comes to protecting maritime navigation in the Strait of Hormuz and the Gulf region. The Europeans, for their part, are anxiously watching the Iranian escalation in the Gulf and statements by IRGC officials threatening to use Iranian proxies from the Mediterranean to the Gulf, from the Houthis in Yemen to Lebanon, but they can do little to influence these developments. European differences over the US leadership of a military taskforce to secure navigation in the Gulf and the Strait of Hormuz could lead Germany to stay out of the alliance. However, it could also trigger a confrontation. Indeed, in the absence of clarity regarding the chain of command, there is a collision waiting to happen. The issue must be quickly resolved and a clear chain of command established for the ships, submarines and other assets that will be deployed to protect tankers.
So far, the divide between the US and its partners, and Iran and its proxies, is too wide to bridge. Tehran has no real allies in this battle, because China does not want to take sides and Russia is trying to play the role of “honest broker” without yet succeeding in convincing either side to make concessions. Yet Iran is mobilising its IRGC-linked proxies, declaring that the theatre of war covers everywhere between the Mediterranean and the Gulf, in complete disregard for the sovereignty of independent Arab states, and the deadlock continues.