Middle East balance of power tilts back in Iran’s favour

Although nothing concrete has happened to lift the sanctions siege that is suffocating the Iranian economy, Iran is on a roll. This is partly a change in atmospherics, but to an important degree also a change in geopolitical fortunes.

The dithering response by the US and its allies to the dizzying dynamics of an Arab world in upheaval has, paradoxically, transformed the August 21 nerve gas attack on rebel suburbs of northeast Damascus into an opportunity for rapprochement with Iran. This is a much bigger deal for Barack Obama than Syria and sits with the US president’s horror of further military entanglement in the broader Middle East after Afghanistan and Iraq.

The Russian-American initiative to audit and destroy the chemical arsenal of Bashar al-Assad’s regime may have been cobbled together. But as a collateral consequence the shadow of US detente with Iran now hovers expectantly over Syria and the region.

In atmospheric terms, attitudes towards the Islamic Republic are starting to change, as the US and Iran start dancing their diplomatic pas de deux. Partly, this is due to the charm offensive of Hassan Rouhani, Iran’s silky and urbane new president, against whom Mahmoud Ahmadi-Nejad, his mercurial and messianic predecessor, was like a pantomime villain out of central casting.

Mr Rouhani’s job is to break the US-led siege crippling Iran, by negotiating a compromise on Tehran’s nuclear programme that would, at the very least, allow Iran to continue enriching uranium while offering verifiable proof that it is not seeking an atomic bomb. In this he has the support of Ayatollah Ali Khamenei, the Supreme Leader. But if Mr Rouhani cannot show tangible gains relatively soon, the vested interests of Iran’s theocracy will overwhelm him. Already, this week, the reformist Bahar newspaper was closed for an article on the Imam Ali, the seventh century founder of Shiism and son-in-law of the Prophet Mohammed, which was interpreted as a metaphorical critique of the Supreme Leader’s powers.

Yet, Iran is in confident mood. Sanctions have cut oil exports to far below potential capacity. But the government is drawing up what it says will be attractive new contractual terms to lure top flight US and European oil companies, to invest a desperately needed $100bn over the next three years. The balance of power in the Middle East, moreover, has tilted back in Iran’s favour.
"The Iranians have also consolidated their position in Lebanon through Hizbollah and in Iraq through the beleaguered Shia Islamist government of Nouri al-Maliki"

The west’s hesitation on Syria, subcontracting arming the rebels to allies in the Gulf, has drained credibility from America and its friends and built a platform for the revival of Sunni jihadism from Lebanon to Iraq.

The Sunni Islamist government of the Muslim Brotherhood in Egypt crashed and burned. Shia Iran, whose prestige among Arabs collapsed after the suppression of its own Green Movement in 2009 and its sectarian response to the Arab spring, is a net beneficiary. The Iranians have also consolidated their position in Lebanon through Hizbollah and in Iraq through the beleaguered Shia Islamist government of Nouri al-Maliki, in need of help to hold back the now cross-border Sunni jihadi threat. In Syria, as a top western diplomat puts it, “everybody accepts now that Bashar al-Assad is completely dependent on Iran”.

The surest sign of this turn in Iran’s fortunes is the near apoplexy with which Saudi Arabia and Israel, Washington’s closest allies in the Middle East, greeted Mr Obama’s decision not to punish the Assad regime for the chemical attack and to pursue detente with Tehran.

Diplomats say talks in Geneva have so far been more substantive than ever before, but the Israeli government of Benjamin Netanyahu clearly sees any western deal with Iran, even one that places uranium enrichment under close international supervision, as a threat. Yuval Steinitz, Israel’s minister of international relations, said Israel “does not want Geneva 2013 to turn into Munich 1938” – a crude attempt to tar Mr Obama with the brush of appeasement.

Iran for its part demands the right to technology and at least the implicit deterrence that comes with control of the nuclear fuel cycle – the currency of the regional power it wants to be recognised as. “To us, mastering the atomic fuel cycle,” Mr Rouhani wrote recently in the Washington Post, “is about who Iranians are as a nation, our demand for dignity and respect and our consequent place in the world. Without comprehending the role of identity, many issues we all face will remain unresolved.”

Copyright The Financial Times Limited 2013.