Will Oil Impose US-Iranian Reconciliation?

Following the recent war in Lebanon, there was much hype that a war with Iran would be next. Claims of a grand conspiracy have been circulating about a new Middle East composed of fractious ethno-states subservient to an all-powerful Israel. The prospect for war has become more palpable due to recent rumors that Israel's attack in Lebanon was a mere dress rehearsal for the real war with Tehran.

Despite Washington's cold reception of Iran's August 22 response to the nuclear offer from the Permanent Five and Germany, the White House's best move remains to engage Iran. Many high-level experts in the United States and Europe have been urging the Bush administration to talk to Tehran, including former Secretary of State Henry Kissinger. US-Iran relations are at a "turning point," he has argued in the media, where Iran can become "a pillar of stability and progress in the region" if it is willing to forgo its revolutionary ethos.

Dialogue with Iran would address Iran's increasing regional responsibility, including its nuclear ambitions, its role in pacifying Iraq, and in disarming Hizbullah. Making progress on all these fronts serves larger American strategic goals for regional stability, especially Washington's imperative to secure the free flow of energy across Eurasia. The US must therefore carefully consider the following strategic concerns before deciding on any course of action.

First, on the Caspian Sea the US needs Iran to counter Russia, Washington's main rival on the world stage of energy marketing and transportation. The US is interested in the Caspian primarily because Azerbaijan and Kazakhstan are major hydrocarbon producers. If the US attacks Iran, it will lose its leverage against Russia, bringing Moscow even closer to Tehran, seriously threatening US interests in Central Asia and the Caspian. Also, Iran can foment trouble inside Azerbaijan, which is three-quarters Shiite, by exploiting a simmering territorial dispute to weaken Baku's US-friendly government and disrupt American regional operations.

Second, China already imports about 15 percent of its energy from Iran, with which it has had friendly ties for decades. China continues to invest billions of dollars in Iran's energy sector, including developing vast oil concessions and a pipeline network linking the Caspian, the Gulf, and China. Recently, Iran joined the Shanghai Cooperation Organization, a strategic alliance that brings together China, Russia, and key Central Asian states in limiting US influence in the region. Any US threat to Iran may compel Beijing to send troops to protect its energy assets, laying the groundwork for the establishment of permanent Chinese bases in the heart of the US energy compound and raising the specter of an eventual military confrontation between the US and China.

Third, Iran's main political rival in the Gulf, Saudi Arabia, is also the world's largest energy provider. Iran could - if provoked - severely disrupt energy production and export routes with a few missiles, sunken ships, blocked seaways, damaged infrastructure, and, in the long term, Shiite uprisings in US-friendly states like Bahrain, Kuwait, Qatar, and even Saudi Arabia. Moreover, any attack would be seriously destabilizing, undermining instruments and confidence-building measures the US has quietly nurtured over many years, such as the Saudi-Iranian security cooperation agreement of 2001, which was crafted precisely to reduce tensions in the Gulf region.

Fourth, the shortest route from the Caspian to the Gulf is through Iran. The US has no outlet to sell its substantial Caspian production to China, Japan, and other Asian markets besides the long-awaited pipeline under construction through western Afghanistan. Iran's position as a transit state is the only viable alternative if the US is serious about diversifying its energy supply network - a tenet of the Bush energy security strategy.

Fifth, the sooner the US engages Iran the sooner it will stabilize Iraq, which has the world's second largest proven oil reserves and an extensive export network between the Gulf and the Mediterranean. According to Vali Nasr of the Council on Foreign Relations, Iran was the main beneficiary of Saddam Hussein's ouster. It provided Tehran with inroads into the core of Iraqi social, military, and religious politics. In the end, American and Iranian interests converge on the desire for lasting stability in Iraq. This is critical for Washington because its large military presence is not sustainable, and for Tehran because a viable Iraq "would secure its position at home and its influence throughout the region," Nasr wrote.

Sixth, Lebanon's stability is also important to US energy security. The Tapline, the only Saudi land-link to the Mediterranean, passes through Southern Lebanon and the Golan. Disarming Hizbullah and placing a robust force in the South are important for the US not only to bolster the Lebanese government and to create a wedge between Iran and Syria, but also to protect a vital oil artery. In its dialogue with Iran, only the US can provide the right climate, incentives and guarantees to implement Lebanese Prime Minister Fouad Siniora's seven-point plan and United Nations Security Council Resolution 1701, agreements that Hizbullah and Iran have in general accepted, leading to a lasting solution that meets Shiite security aspirations in the South. Sincere and tangible efforts by the international community to resolve all territorial and resource grievances among Lebanon, Syria and Israel in a Madrid-like conference require a constructive relationship between the US and Iran.

The larger context presented by the geopolitics of energy marketing and transportation indicates that it is in the best interest for the US to engage Iran. The challenge for the Bush administration is to ensure that its threats against Tehran do not strengthen extremists on both sides. Iran and the US have hard choices to make in the coming months to avert a collision detrimental to regional stability. Iran realizes it has much to gain from a serious detente with the US, and the US may have to accept Iran's right to nuclear power in order to achieve its global aims.

As Kissinger pointed out, accepting a "modern, strong, peaceful" Iran may in the end be Washington's best bet to attain the free flow of energy it needs.