The US drive to isolate Tehran is unrelenting but there is little evidence Iran’s leadership will change its ways

By Simon Tisdall

Source:

October 21, 2010

The US is quietly ratcheting up economic and financial pressure on amid signs that talks about Tehran’s suspect nuclear programme could resume next month. These two developments may be connected. But neither nor diplomacy can wholly obviate the dread possibility of military confrontation unless something fundamental changes soon at the heart of Iran’s fundamentalist regime.

The US squeeze has been gathering force since July, when Congress passed the , which in effect denies foreign banks access to the US financial system if they trade with targeted Iranian banks and businesses or the country’s Revolutionary Guards.

Following the latest round of UN security council sanctions in June, the EU, Japan, Australia and other western allies passed their own measures further restricting investment in Iran’s energy sector. Then, last month, the Obama administration gained the agreement of leading European oil companies to stop investing and trading with Iran.

One dramatic consequence of this steady tightening of the screw is the increasing difficulties encountered by Iran Air, the state airline, in refuelling its planes in Europe. BP and Shell have reportedly cancelled jet fuel deliveries and other companies say they will follow suit when current contracts expire. has meant its direct flights from there to Tehran have effectively ceased. Its other routes also face growing disruption.

The US drive to isolate Tehran is unrelenting, impacting collaborators and competitors alike. An anonymous official recently briefed US media that “a significant list” of Chinese companies and banks were continuing to provide restricted technology and materials to Iran – and that the US had sent a senior envoy to Beijing to protest. The move embarrassed China into publicly reiterating its commitment to upholding the sanctions regime.

Turkey and Azerbaijan, two of Iran’s close neighbours, were on the receiving end this week when Stuart Levey, the US treasury department’s under-secretary for terrorism and financial intelligence, came calling. Levey said he intended to brief private and public sector businesses about Iran’s “illicit conduct” and urge government leaders to ensure sanctions were enforced. US officials have undertaken similar arm-twisting missions in the Gulf and across the Arab and Muslim world.

Reports from Tehran suggest the sanctions are biting, although to what degree is unclear. In addition to the usual complaints about unemployment and inflation, there seems to be growing unhappiness about shortages and pay. The culture ministry issued a warning to print media that they faced closure if they reported opposition criticism. And dozens of reform activists are said to have been jailed in a new round of repression in recent weeks.

There are worries, too, about the public’s response to much-delayed plans by President Mahmoud Ahmadinejad to slash the huge $100bn annual bill for state subsidies for food and other staples. These concerns prompted a leading pro-regime cleric, Ayatollah Ahmad Jannati, .

All the same, Washington’s sanctions enforcement drive faces considerable difficulties. Chinese machinations aside, there is resistance to the measures in Turkey and Iraq, where Iran exerts considerable influence. Turkey, for example, depends on Tehran for about one-third of its energy needs. .

Speaking earlier this month, . But he insisted Iran had large reserves of hard currency and would overcome any obstacles the US and others laid in its path. “The world is big, and the people who are trading [with us] find ways to transfer money,” he said. “When you block the stream of water, it goes another route.”

As if to underscore its determination not to succumb, Iran announced on Wednesday that its . Its stockpile now amounts to 30kg and is steadily rising. Tehran also said it might rejoin the stalled nuclear talks next month. But, as ever, it seems likely to try to limit the scope of the discussions in ways the US and partners may find unacceptable.

Even if the talks do recommence, few people would be rash enough to suggest they will achieve a breakthrough after so many past disappointments. Despite all the pressure and despite some positive signs in recent months, there is little or no evidence so far that Iran’s top leadership is willing, or can be forced, to fundamentally change its ways. Ahmadinejad’s provocative posturing in Lebanon last week made that plain enough. And so the dread juggernaut of direct, physical confrontation rolls ever closer.