Thirteen month ago the United States launched a total economic war against Iran. It demands its capitulation. Now Iran decided to respond in kind. It will wage a maximum pressure campaign on U.S. economic interests until the Trump administration concedes its defeat. Shipping in the Middle East will soon become very hazardous. Oil prices will go through the roof. Trump will be trapped between two choices neither of which he will like.
In early May 2018 U.S. President Trump broke the nuclear deal with Iran and sanctioned all trade with that country. Iran reacted cautiously. It hoped that the other signatories of the nuclear deal would stick to their promises and continue to trade with it. The year since proved that such expectations were wrong.
Under threat of U.S. sanctions the European partners stopped buying Iranian oil and also ended their exports to it. The new financial instrument that was supposed to allow payments between European countries and Iran has still not been implemented. It is also a weak construct and will have too little capacity to make significant trade possible. Russia and China each have their own problems with the United States. They do not support trade with Iran when it endangers their other interests.
Meanwhile the Trump administration increased the pressure on Iran. It removed waivers it had given to some countries to buy Iranian oil. It designated a part of the Iranian armed forces, the Revolutionary Guard Corp (ICRG), as a terrorist entity. On Friday it sanctioned Iran's biggest producer of petrochemical products because that company is alleged to have relations with the ICRG.
The strategic patience Iran demonstrated throughout the year since Trump killed the deal brought no result. Trump will stay in power, probably for another five and a half years, while Iran's economic situation continuous to get worse. The situation requires a strategic reorientation and the adoption of a new plan to counter U.S. pressure.
On the strategic side a long term reorientation in four different fields will counter the effects the economic war on Iran. Foreign imports to Iran will be reduced to a minimum level by increasing production at home. Iran will ally with no one, not even China and Russia, as it recognizes that relying on partners has no value when those partners have their own higher interests. The third step is to loosen interior pressure on the 'reformist' who argued for a more 'western' orientation. Trump, and the cowardice of the Europeans, have proven that their arguments are false. The last measure is to reorientate exports from global oil trade to other products, probably derived from oil, and to neighboring countries.
All four steps will take some time. They are at large a reorientation from a globalization strategy to a more isolationist national one. Some first steps of this new plan are already visible. A common bank will be set up by Syria, Iraq and Iran to facilitate trade between those countries.
The economic reorientation is not sufficient. To directly counter Trump's maximum pressure campaign requires a tactical reorientation.
Trump continues to call for negotiations with Iran but he can accept nothing but a total capitulation. Trump also proved that the U.S. does not stick to the agreements it makes. There is therefore no hope for Iran to achieve anything through negotiations. There is only one way to counter Trump's maximum pressure campaign and that is by putting maximum pressure on him.
Neither Washington, nor the anti-Iranian countries in the Middle East, nor the other nuclear deal signers have so far paid a price for their hostile acts against Iran. That will now change.
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