May 30, 2026
Juan Cole
Ann Arbor (Informed Comment) – The Iranian government continues to dicker with the Trump administration about the final form of a Memorandum of Understanding (MOU) that would bring an end to the current standoff at the Strait of Hormuz, which threatens the world’s energy.
Juan Cole
Ann Arbor (Informed Comment) – The Iranian government continues to dicker with the Trump administration about the final form of a Memorandum of Understanding (MOU) that would bring an end to the current standoff at the Strait of Hormuz, which threatens the world’s energy.
The US has long been
banking on its counter-blockade of Iranian traffic through the Strait to
bankrupt Iran and throw the country into chaos.
While the Iranian economy has certainly been badly hurt by the US blockade, it is unlikely that the government will collapse as a result.
Farsnews, which is close to the Iranian government, reports that not only have Iranian shipments of petroleum to China by rail tripled during the past nearly two months, but Tehran just sent a shipment of liquefied petroleum products to Pakistan by train, as well. Iran is hoping that it can be transshipped from Pakistan to Central Asia, as well. In the meantime, Iraq appears to have dropped customs on Iranian trade. Pro-Iran militias are important to the stability of the Iraq government.
Of course, these train and truck shipments of petroleum products overland come to only a fraction of Iran’s pre-war exports by ship. But any income goes into the state coffers and strengthens it vis-a-vis everyone else.
Some observers also believe that Iranian tankers are slipping by the US navy by hugging the Pakistani coast and staying in Islamabad’s waters.
We saw this movie already in the 1990s when the US and the UN placed Draconian sanctions on the government of Iraq, then ruled by the iron fist of dictator Saddam Hussein and his one-party Baath government. The sanctions devastated the Iraqi middle classes, leaving the cities teeming with urban slum dwellers and street toughs. They did not have the wherewithal effectively to oppose the Baath Party and its extensive secret police enforcers. Iraq was only supposedly allowed to export enough oil to pay for food imports. But petroleum is fungible; once it is refined into gasoline or kerosene, it is easily sold. Iraqis put it in barrels on the back of trucks and shipped it to Jordan, Syria and Turkiye. They had to sell it at a discount, but they still got an income. Maybe some was mixed in with Iranian exports.
When the Bush administration invaded Iraq in 2003, they found that the government had a surplus of $30 billion (over $100 billion in today’s dollars). So all those harsh sanctions did not erase their rainy day fund, and the Baath Party factotums and secret police were still very well paid. They had resources with which to put down the 1999 riots in East Baghdad over the murder of Ayatollah Muhammad Muhammad Sadiq al-Sadr. Because East Baghdad had become a slum under the sanctions, whereas it could have developed (as happened to slums in Istanbul) into a unionized, working class set of neighborhood with political clout. They were just disorganized rioters.
In fact, in 2004 I was asked by one government official in Washington who wanted to build democracy where the Iraqi middle classes were, and I had a sad duty to inform him that the US had destroyed them. Another, who wanted to offset the religious parties with leftists, asked me about the Communist Party of Iraq, and sadly, I had to inform him that the US had helped destroy it in the 1960s.
So if ten years of really strict sanctions did not result in the fall of the Iraqi Baath government, a few months of leaky sanctions are unlikely make the Iranian government collapse. They will, however, bring pain to ordinary Iranians and deprive them of the money they need if they want to pressure the government to change.
While the Iranian economy has certainly been badly hurt by the US blockade, it is unlikely that the government will collapse as a result.
Farsnews, which is close to the Iranian government, reports that not only have Iranian shipments of petroleum to China by rail tripled during the past nearly two months, but Tehran just sent a shipment of liquefied petroleum products to Pakistan by train, as well. Iran is hoping that it can be transshipped from Pakistan to Central Asia, as well. In the meantime, Iraq appears to have dropped customs on Iranian trade. Pro-Iran militias are important to the stability of the Iraq government.
Of course, these train and truck shipments of petroleum products overland come to only a fraction of Iran’s pre-war exports by ship. But any income goes into the state coffers and strengthens it vis-a-vis everyone else.
Some observers also believe that Iranian tankers are slipping by the US navy by hugging the Pakistani coast and staying in Islamabad’s waters.
We saw this movie already in the 1990s when the US and the UN placed Draconian sanctions on the government of Iraq, then ruled by the iron fist of dictator Saddam Hussein and his one-party Baath government. The sanctions devastated the Iraqi middle classes, leaving the cities teeming with urban slum dwellers and street toughs. They did not have the wherewithal effectively to oppose the Baath Party and its extensive secret police enforcers. Iraq was only supposedly allowed to export enough oil to pay for food imports. But petroleum is fungible; once it is refined into gasoline or kerosene, it is easily sold. Iraqis put it in barrels on the back of trucks and shipped it to Jordan, Syria and Turkiye. They had to sell it at a discount, but they still got an income. Maybe some was mixed in with Iranian exports.
When the Bush administration invaded Iraq in 2003, they found that the government had a surplus of $30 billion (over $100 billion in today’s dollars). So all those harsh sanctions did not erase their rainy day fund, and the Baath Party factotums and secret police were still very well paid. They had resources with which to put down the 1999 riots in East Baghdad over the murder of Ayatollah Muhammad Muhammad Sadiq al-Sadr. Because East Baghdad had become a slum under the sanctions, whereas it could have developed (as happened to slums in Istanbul) into a unionized, working class set of neighborhood with political clout. They were just disorganized rioters.
In fact, in 2004 I was asked by one government official in Washington who wanted to build democracy where the Iraqi middle classes were, and I had a sad duty to inform him that the US had destroyed them. Another, who wanted to offset the religious parties with leftists, asked me about the Communist Party of Iraq, and sadly, I had to inform him that the US had helped destroy it in the 1960s.
So if ten years of really strict sanctions did not result in the fall of the Iraqi Baath government, a few months of leaky sanctions are unlikely make the Iranian government collapse. They will, however, bring pain to ordinary Iranians and deprive them of the money they need if they want to pressure the government to change.
No comments:
Post a Comment