Not likely. So far, it looks like an enfeebled Bush administration will pass into irrelevance, the Security Council will impose additional ineffectual measures, and Tehran’s mullahs will enrich enough uranium for an atomic device that can kill hundreds of thousands.
Of course, history does not always travel in straight lines. Are there any off-ramps in sight? President Mahmoud Ahmadinejad has kept Iran’s nuclear weapons efforts on track by essentially buying support from the populace with his massive program of subsidies for food, fuel, transport, and other items. The government can make these payments thanks to bulging oil and gas revenues—some $70 billion last year—resulting from surging prices. This month, light sweet crude futures hit a record $111.80 a barrel.
No price goes up forever, and oil is about $10 off its high partially due to fears of a mild recession in the United States. If the downturn in America is more severe or goes global, the Iranian government will not be able to maintain its subsidization program. Even today, the economy is fragile. The world’s fourth-largest extractor of crude had to resort to gas rationing last year, and this year inflation is slipping beyond control of Tehran’s technocrats. “Sometimes we have to change the price stickers three times a day because of inflation,” says Ali Daryani, a grocer in the Iranian capital.
Iran, in a buoyant economic environment, can withstand anything the Security Council or the West will throw at it in the way of sanctions. In a global collapse—last Sunday the invariably optimistic Alan Greenspan stated that the current crisis will probably be “the most wrenching since the end of the second world war”—the Iranian nuclear program is a goner.
For the record, I am not arguing that Washington should purposely try to destroy the global economy to get at Iran. But we should remember that the Reagan administration succeeded in depressing commodity prices to undermine the Soviet Union. It’s time, therefore, we started looking at the price of oil and gas as a national security issue of the first order.