Whenever I have a little time to kill, I click the tab on my Web browser that takes me to the NYMEX crude oil futures. It’s astounding to think that the same $147 barrel of crude from last July is now, as of Oct. 28, selling for only $54.43 a barrel. But economics aside, I care about this for two reasons: I drive a truck, and this drop in price seems to be the only thing that has effectively put pressure on the oil-revenue-dependent government of Iran.
These days it seems whenever you see a pundit on TV talking about the “real winner” of the war in Iraq, they almost certainly mention Iran. The argument goes: Saddam held Iran in check, and thus, by eliminating Saddam, Iran is now without its biggest rival. There is some truth in this. But Iran and, most notably, President Ahmadinejad have gotten lucky on a few key fronts.
To begin with, Iran has been unfazed by international pressure concerning its highly controversial nuclear program. And in 2006, Israel, in its ill-planned war with Hezbollah, failed to disarm the Iranian-sponsored guerilla group. Even last year’s maritime drama that led to a handful of British sailors being captured was spun as an Iranian victory. It seems that almost every challenge that President Ahmadinejad has faced on the global stage has enhanced his power — well, until now.
Just before the 2005 Iranian presidential election, Ahmadinejad, then the mayor of Tehran, ran his campaign saying that he was the candidate to alleviate Iran’s economic troubles. With unemployment up to 10 percent, and urban real estate that even the flashy Persian elite struggled to afford, it was clear that something had to be done. So Ahmadinejad stole a page from former Russian president Vladimir Putin’s playbook — do anything to keep oil prices high.
This is one reason why Russia sells arms to Syria that eventually work their way down to Hezbollah and Hamas. It’s also why President Ahmadinejad has repeatedly threatened to “erase Israel from the pages of time.” It’s startling how these incendiary tactics spark the speculative oil markets in both New York and London.
But that was what the Middle East looked like last summer or, as the Iranians say, a whole cup of tea ago. President Bush has watched his opportunity dwindle, along with his days in office, to remove Iranian nuclear sites. And his successor — judging from the polls — President-elect Barack Obama favors a diplomatic route with Iran. Israeli Prime Minister Ehud Olmert has resigned under a corruption scandal, leaving Israel without leadership. His would-be successor, Foreign
Affairs Minister Tzipi Livni, has failed to shore up a new coalition and is now calling for general elections. Seeing that we are in the mix of what Alan Greenspan has referred to as an “economic tsunami,” the international community is now more focused on the possibility of a global recession than turning up the heat on Iran.
All this has left the speculative oil markets on their knees. Obama isn’t likely to attack Iran, Israel is without leadership, and the global economy is in shambles. The fear and speculation that were once fueling $147-a-barrel prices have now fallen flat.
Even OPEC’s emergency meeting that announced a 1.5 million-barrel cut, or 5 percent of its global oil production, can’t stop these falling prices. So yes, OPEC has scrambled to try and stabilize price, but some voices of this 13-member oil cartel have been louder than others.
Iran’s economy, says the BBC, could be headed into a “perfect storm.” The numbers are simple. “For every dollar on the price of a barrel of oil,” says BBC analyst Jon Leyne, “Iran earns approximately a billion dollars a year.” In fact, the International Monetary Fund issued a report last August saying that the Iranian regime would face “unsustainable deficits” if the price of crude dropped below $75 a barrel. And remembering the recent Iranian outcry over the government-imposed petrol rations, President Ahmadinejad and his conservative base are starting to feel pressure from within.
All of this amounts to a perfect stalemate.
The U.S. economy, combined with dueling insurgencies in both Iraq and Afghanistan, has nearly silenced those who were beating the war drum for Iran. Leaderless Israel knows that it cannot attack Iran without first addressing Hezbollah’s stockpile of Katyusha rockets. And Iran is facing an economic meltdown because of the recent cheapness of its oil, yet it still charges ahead with its highly controversial nuclear program.
It is imperative that Obama understand that with this perfect stalemate also comes great opportunity. Unlike the quasi-effective Security Council sanctions of the past, the U.S. and its allies finally have good leverage on Iran. It would be a diplomatic misfortune if the next U.S. president could not see that in this time of peril, there could also be a moment of promise for peace in the Middle East.
Jesse Aizenstat is a freelance journalist and a political science major at the University of San Diego.