Imagining Iran Without Sanctions

The Islamic Republic will likely become much stronger, but also more moderate, free, and open.

It seems to me that the history of Iran between 1941 and 1979 was dominated by the drama of the British, Americans, and Russians coveting the nation’s vast and strategically located oil reserves. As I mentioned in an earlier column, I was surprised to learn that Iranian Light is almost as valuable as West Texas Intermediate.

Iran's main oil fields are concentrated in the southwestern province of Khuzestan and the Persian Gulf, with key onshore fields like Ahvaz, Gachsaran, and Marun dominating production. Roughly 90% of Iran's crude exports pass through Kharg Island, the primary export terminal located in the northern Persian Gulf.

It’s hard to quantify the sheer vastness of this prize. IF the Iranians had been allowed to sell this oil on the open market, without the crippling sanctions imposed by the US, Britain, and the EU, it would have become an extremely wealthy country.

The oil fields were why Great Britain and the Soviet Union invaded Iran in 1941 with the handy excuse that they needed the oil to fuel the Red Army’s fight against Germany.

After the war, the oil fields were the prize that the Anglo-Persian oil company wished to keep for itself. The following history of company is very interesting.

• Origin: Founded by William Knox D’Arcy after securing a 60-year concession from Mozaffar al-Din Shah Qajar for exclusive oil exploration rights in Persia.

• The British Shift: In 1914, the British government acquired a 51% stake in the company to secure fuel for the Royal Navy, pushed by Winston Churchill.

• Renaming:

  The company changed its name from Anglo-Persian Oil Company to Anglo-Iranian Oil Company (AIOC) in 1935.

• Exploitation and Tensions: The AIOC paid minimal royalties to Iran while reaping massive profits, causing major tension. In 1950, for example, the company made £170 million but paid Iran less than £16 million.

• Nationalization: In 1951, Iranian Prime Minister Mohammad Mosaddeq nationalized the company, triggering a severe crisis.

• Coup and Transition: Following a 1953 CIA/MI6-backed coup that removed Mosaddeq, the AIOC was replaced by an international consortium, and the company was rebranded as British Petroleum (BP) in 1954.

Naturally the West was badly butt-hurt when Ruhollah Khomeini led a popular revolution to throw out the Shah, who had served as a British-US puppet since the British invaded in 1941.

The Iranian oil fields were also the prize that Iraqi dictator Saddam Hussein sought when he invaded Iran in 1980 with billions of US aid, dual-use technology, and intelligence to Iraq to ensure it could maintain military capacity. I suspect the US plan was to use Saddam as the attack dog and then strike a deal with him to share the loot if he won the war against Iran.

After Saddam withdrew his forces in 1988, in effect losing the war, he complained to George H.W. Bush that Iraq was financially ruined by the war, and he blamed neighboring oil producers—especially Kuwait—for worsening the situation by horizontal drilling into Iraq’s reserves. Saddam’s complaint was the basis for his 1990 invasion of Kuwait. At that point, he outlived his usefulness to the US, and so instead of supporting him, the US reversed its policy and made him the bogeyman.

When evaluating the Iranian regime, it is important to understand that its militarism and repressive policies are actually fostered by the exertion of outside pressure on the country. Sanctions and attacks on the Iranian currency by the US Treasury Department cause economic hardship for moderate people who yearn for a more open society.

My mother’s early American ancestors were members of the Puritan congregation of Plymouth and Massachusetts Bay. With increasing prosperity and trade in the 18th century, they ditched their austere Calvinism and became far more secular and worldly. The same process was evident in Amsterdam and the Hanseatic cities of Germany. Trade and interaction with the rest of the world foster openness and liberality.

The US and Israeli strategy of sanctions, threats, and attacks has apparently only strengthened the position of militant hardliners in Iran while making the middle class anemic.

Currently, it appears that China is making moves to bring Iran out of a state of siege and into the world of trade, unencumbered by sanctions. President Trump has acknowledged that China was instrumental in getting Iran to agree to the cease fire and to meet Kushner, Witkoff, and Vance in Islamabad.

Given that the US and Israel attacked Iran while its Foreign Minister was in Europe to meet with Kushner and Witkoff, one can imagine that the Iranians have zero trust in these guys.

The most pressing question at the moment is whether Iran will agree to drop its demand that Israel stop attacking Lebanon. JD Vance made a fool of himself by claiming that the Iranians had simply misunderstood that Israeli operations in Lebanon weren’t part of the ceasefire. It remains to be seen whether the Iranians will play along with this charade.

It appears that China may be pressuring Iran to drop support of its Hezbollah proxy in Lebanon and to make other concessions to the US in return for the economic sanctions being lifted.

Another obvious sticking point is the 440 kilograms of 60% enriched uranium that Iran still has in its possession. It appears that F-15 shot down on April 3 may have been part of a high-risk special forces operation to seize Iran’s enriched uranium stockpile that went awry.

For his part, Trump recently claimed in Truth Social post that Iran’s uranium remains pulverized and lying under the rubble of last summer’s Operation Midnight Hammer. If this assertion is true, it’s further proof that the threat of “imminent” nuclear attack as the casus belli in February was a lie.

Now that Iran has been attacked simultaneously by two nuclear-armed powers, with President Trump issuing a threat to end Iranian civilization forever, it seems very unlikely that Iran will give up its uranium. On the contrary, it will likely conclude that nuclear weapons are essential for deterring further aggression from the US, just as North Korea long ago concluded.

Since North Korea obtained and successfully tested a nuclear weapon in 2006, its dynastic dictator, Kim Jong Un—widely regarded as aggressive and unpredictable—has repeatedly threatened “shocking and unimaginable disaster,” and “total destruction” of the United States if it takes military action against North Korea. Despite his threats, most military analysts believe he is a rational actor who understands the doctrine of Mutually Assured Destruction (MAD) and therefore maintains nuclear weapons as a means of deterrence rather than suicidal aggression.

The proposition that Iran wishes to acquire nuclear weapons in order to use them in offensive attacks against Israel and the United States has never seemed plausible to me. An offensive attack would result in Iran’s prompt and utter destruction by a US counterstrike and Israeli counterstrike launched from its Dolphin class submarines armed with nuclear missiles.

The assertion that the Iranians are irrational actors who do not recognize and respect the MAD doctrine strikes me as no more credible than George W. Bush’s 2002 proclamation that leaving Saddam Hussein in power would soon result in “a mushroom cloud over Manhattan.”

The Chinese—who strike me as far more calculating and coolheaded than the foul-mouthed clowns in Washington— have made huge investments in Iran, and they appear confident that Iran has no desire or intention to destroy itself by launching nuclear attacks against Israel and the US.

Increasingly, it seems to me that the war against Iran is a classic example of the so-called Thucydides Trap — that is, a war that occurs when a rising power threatens to displace an established ruling power. Derived from ancient Greek historian’s analysis of the Peloponnesian War in which Sparta became increasingly alarmed at the rise of Athens, and ultimately declared war against the city-state.