Between Iraq and a Hard Place

Thank goodness the sanctions against Iran are like virtually all sanctions: leaky as a sieve. Seldom is there sufficient unanimity to make even relatively concerted action effective.

Now it seems that some in the Pentagon are itching to redeem themselves – an actual government making indisputable threats. Iran is capable of closing the Straits of Hormuz, at least temporarily. But a "measured response" might not reopen the waterways. Would you write a (large) insurance policy on slow and vulnerable supertankers? (Arithmetic: 2 million barrels at $100 per barrel is $200 million) My guess is NO!

The threat, in other words, is more potent than it might seem. The US and its allies will find their ability to see that oil continues flowing more limited than most imagine.

However, as long as Iran can sell oil, they have multiple reasons – in units of US dollars billion – not to shut off the flow of oil. That is, as long as the sanctions are leaky.

If the sanctions "bite" then this calculus changes: there is no longer a downside for Iran, financially. As to domestic politics? Well, the government is hardly popular, but if they really are under attack… That's not such an incredible story, and it's not just the recent dead physicist, it's also our sponsoring Iraq in their 1980-88 war. (Remember our good ally Saddam Hussein? – whatever happened to him?)

So again, thank goodness the sanctions aren't working. Let's pray that continues.

[PS: if you're an economist, you can reframe this as a "game".]

[Sources: See Economic sanctions reconsidered by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, a two-volume study published in 1990 by the Peter G. Peterson Institute for International Economics. It analyzed roughly 300 examples of international sanctions, essentially all those available at the time. In their judgment less than a handful proved effective in achieving their purported (political) goal. Sanctions thus seem to be aimed at domestic constituents as much as foreign enemies.]
[Addendum of 25 January: I listened to part of the Republican primary candidate in Florida. Ron Paul's argument against involvement in Iraq employs a similar logic. Of course part of what I had in mind was our embargo of Japan in 1941; some in Japan interpreted that as a de facto declaration of war. Paul claims we've already done the same for Iran with the stationing of ships in the Persian Gulf. As far as I know, however, we are not actually forcing oil tankers to stop, and so I stop too from seconding Paul's interpretation.]