The administration justified its withdrawal from the accord partly on the assertion that the lifting of sanctions required by the 2015 nuclear agreement was enhancing Irans ability to exert influence in the region. Leaving the deal and re-imposing sanctions would, according to President Donald Trump and other officials, apply maximum pressure on Irandenying it the revenue to fund, arm, and train a wide network of regional allies and proxies, including the Lebanese Hezbollah, Iraqi Shia militias, Houthi rebels in Yemen, Hamas in the Gaza Strip, militant groups in Bahrain, and factions of the Taliban in Afghanistan.
Trump has asserted that the re-imposition of sanctions has made Iran a much different country. He and other US officials state that the sanctions, including the May termination of sanctions exceptions under a 2011 law penalizing the banks of countries that do not reduce their purchases of Iranian crude oil, have devastated Irans economy and caused Iran to retrench in the region.
A wide range of observations and data support the former assertion, but not the lattersuggesting that the economic effects of sanctions do not necessarily translate into strategic gains for US policy.
The re-imposition of sanctions has, without question, harmed Irans economy. The International Monetary Fund estimates that Irans GDP will shrink by at least 6 percent for the March 2019-March 2020 perioda severe recession, although not a collapse. Prior to the US withdrawal from the JCPOA, Irans economy had been expected to continue to rebound from the depressed, pre-nuclear accord levels experienced during 2011-2016.
The termination of oil purchase sanctions exceptions has driven Irans vital oil exports to lows not seen since the eight-year Iran-Iraq War, when Iraqi jets bombed Irans oil export terminals constantly. Absent any oil-related sanctions, Irans baseline crude oil exports are about 2.5 million barrels per day. But, for June 2019, the first full month after sanctions exceptions were terminated, Iran only exported about 300,000 barrels per dayfar below what most analysts estimate Iran requires to avoid significant financial austerity. Furthermore, the availability of key medicines, particularly expensive chemotherapy and other drugs, has been reduced substantially because of Irans inability to secure trade credits to buy large quantities of these items. These effects are similar to those of 2011-2016, when the Obama administration escalated sanctions in order to persuade Iran to negotiate limits to its nuclear programlimits that were encapsulated by the JCPOA.
If sanctions translated into changes in Irans regional behavior, it would be expected that Irans regional influence would have suffered setbacks during 2011-2016. Yet, events and trends demonstrated just the opposite or, at best, suggest that sanctions and Irans regional influence are independent of each other. In 2013, during a period of maximum economic effect of sanctions on Irans economy, Iran was able to intervene in the Syria civil war, taking decisive action to maintain the Bashar al-Assad regimes grip on power. Iran not only sent its own Islamic Revolutionary Guard Corps Quds Force (IRGC QF) advisers to help organize the Assad regimes defenses, but it also facilitated the armed intervention of Lebanese Hezbollah in Syria on Assads behalf. Iran furthermore was able to financially entice and organize thousands of Afghan and Pakistani Shias into new unitsthe Fatimiyoun and Zaynabiyoun divisionsto fight in Syria. Nor did sanctions prevent Iran from providing Assad with at least $1 billion in credits each year during 2012-2016, including the provision of gratis oil.
In 2014, with international sanctions still applying severe pressure to Irans economy, Iran was easily able to intervene in Iraq to help halt the advance of the Islamic State of Iraq and al-Sham (ISIS) toward the Iran-Iraq border. Tehran sent IRGC QF advisers to organize and field a variety of Iran-backed Shia militias, and to recruit additional Shia fighters, to fight alongside an Iraqi military that had largely collapsed in the face of the ISIS onslaught. In parallel, the United States sent forces to help reorganize the Iraqi Army to face the severe challenge.
Sanctions also did not stop Iran from taking advantage of the battlefield success of the Houthi movement in Yemen. Iran helped them not only confront a Saudi-led Arab coalition that was assembled with the express purpose of rolling back Irans regional influence by defeating the Houthis, but has also armed the Houthis to the point where they are able to launch missiles into Saudi Arabia and threaten shipping in the vital Bab el-Mandeb. More than four years later, the Arab coalition is bogged down, fracturing, and looking for ways to exit the conflict.
In 2019, Trump administration officials assert that the US maximum pressure campaign is already working to roll back Irans regional influence. In particular, they cite reports that Irans chief proxy, Hezbollah, has acknowledged financial constraints by appealing for public donations. However, there are no indications that either Irans nor Hezbollahs capabilities or intent to continue helping Assad have changed. Both remain significantly engaged in Syria, and Irans posture in Iraq, Yemen, and elsewhere remains virtually unchanged.
Administration policy might potentially induce Iran into negotiations on a revised JCPOA that might involve Iranian concessions on issues not explicitly restricted in the 2015 agreement, such as Irans development of ballistic missiles. But, because Irans regional activities are at the core of its ideology and its strategy for defending the revolutionary regime, it is virtually certain that there will be no alteration of its regional policy that is either compelled by sanctions or demanded in negotiations.
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