How to Jumpstart U.S. Strategy toward Iran

After an eight-month lull, Iran and the P5+1 states -- Britain, China, France, Germany, Russia, and the United States -- will meet in Almaty, Kazakhstan, for a new round of nuclear talks. The summit comes after Tehran dismissed a prior P5+1 offer of incentives in exchange for caps on the regime's nuclear activities. The long scheduling delay and the now-customary tussling over venue illustrate the stagnation, if not regression, of the process: after eight years of multilateral discussions and more than a decade of military warnings against Iran, the nuclear issue has resisted all attempts at resolution. This in turn has given rise to a search for simple solutions, such as more sanctions or direct U.S.-Iran talks. What is truly required, however, is a disciplined and coordinated approach using multiple levers simultaneously -- the sort of effort that has long eluded Washington and its allies.

U.S. AND P5+1 STRATEGY

Washington's Iran strategy rests on a dual-track approach. For some time, though, only one of these tracks -- sanctions -- has been functional, while the other -- negotiations -- has stalled. In the past, the two tracks operated in parallel, with rounds of talks taking place between increasingly tough sanctions resolutions by the UN Security Council. Today, however, the pressure is no longer international in scope, but dependent on U.S. and EU measures. The process has also become sequential rather than parallel -- as talks are delayed and take on an increasingly pro-forma air, Washington has continued to increase sanctions in the hope of forcing Tehran to become more conciliatory. Yet there are few signs that this approach is succeeding.

To be sure, Iran's economy is under significant stress, with inflation reaching anywhere from 27 to 110 percent (according to widely varying estimates) and the value of the rial dropping sharply. The regime has also reportedly experienced severe difficulties conducting international financial and trade transactions due to sanctions first imposed by Washington in the mid-2000s. Oil exports -- Tehran's main source of revenue and foreign exchange -- have also dropped significantly, from 2.2 million barrels per day before 2012 to around 1.3 million today. These exports will likely be constrained even further by recently imposed U.S. sanctions aimed at blocking oil importers from repatriating revenue to Iran.

Yet not all economic signs are negative for the regime. Although oil exports are depressed, they have been trending upward from their September low point of 900,000 bpd, and average global oil prices hit an all-time high in 2012. Furthermore, Tehran -- like other regimes targeted with sanctions -- has proven adept at developing workarounds. Washington has been commendably quick at closing such loopholes when they arise, but economic pressure has yet to engender visible signs of mass unrest or fissures within the regime, and therefore has not produced the desired strategic shift among Iran's leaders.

This failure is due in part to the single-mindedness of U.S. policy -- while sanctions have been strengthened, other forms of pressure have diminished or gone unused. For example, Washington has made few efforts to support the Iranian opposition or highlight the regime's human rights abuses. And while U.S. officials continue to insist that the military option remains "on the table," the credibility of that option has been weakened with the removal of an aircraft carrier from the Persian Gulf, Washington's reluctance to become more involved in Syria, and the nomination of a new defense secretary who reputedly opposes military pressure on Iran. The United States has also declined to give even general redlines for Iran's nuclear program, instead offering vague and shifting definitions of what might cause it to consider military action.

Washington has paired this set of policies -- economic pressure that the regime appears to deem manageable, decreasing military pressure, and a reluctance to support the Iranian opposition -- with incrementally more generous offers via the P5+1. Such a combination reinforces the notion that the United States is heading for the exits in the Middle East, a view common in Iran and among U.S. allies in its neighborhood. This in turn gives rise to two risks: first, that Iran will feel little urgency to revise its policies and will try to wait Washington out; and second, that states such as China and India will reverse their reduction of oil imports from Iran, hedging their bets by balancing cooperation with Washington and good relations with Tehran. This scenario is especially likely if states believe the United States will continue to offer sanctions waivers and refrain from military action.

IRANIAN STRATEGY

For its part, Tehran appears to be hewing to a long-held strategy of expanding its nuclear program slowly while preserving the P5+1 talks as a pressure valve to prevent the United States or Israel from adopting a more aggressive approach. Although its recent nuclear activities may seem contradictory on the surface, they actually suggest a deliberate strategy.

Currently, Iran is expanding and enhancing its nuclear infrastructure, installing more centrifuges at the main enrichment facility in Natanz while completing the installation of centrifuge cascades at Fordow. The regime is also expanding its stockpile of low-enriched uranium, beginning the installation of advanced centrifuges that could enable higher enrichment, and maintaining progress on a possible plutonium route to a weapon using the Tehran Research Reactor (TRR) and the IR-40 reactor at Arak. At the same time, Tehran is limiting its stockpile of its most worrisome nuclear material -- 19.75 percent enriched uranium -- to less than one potential weapon's worth by converting some of it into oxide form for ostensible use in the TRR.

Taken together, these activities do not constitute "mixed signals"; rather, they are consistent with the strategy noted above. The regime is preserving the option to make a nuclear weapon -- and reducing the time required to do so through improvements in its enrichment infrastructure -- while taking care not to cross the redline set by Israeli prime minister Binyamin Netanyahu in his 2012 UN speech, where he warned that Iran accumulating one bomb's worth of 19.75 percent uranium would be cause for military action. In addition to significantly reducing Iran's breakout time, this strategy also decreases Washington's reaction time if the regime goes that route.

On the diplomatic front, Iran has maintained a relatively steady course, insisting that its "right" to enrichment be acknowledged and that all sanctions be lifted as part of any nuclear deal. It has also sought to put regional issues such as Syria and Bahrain on the agenda for talks. Even if the regime is truly interested in nuclear compromise, it will likely try to postpone any serious discussions until after the June presidential election in order to minimize political turbulence.

THE ROAD AHEAD

As frustrations with the P5+1 process mount, calls for direct U.S.-Iran talks have increased. Although the Obama administration has long been open to such talks, Tehran has resisted them. Iran's leaders likely fear that rapprochement with Washington would weaken the raison d'etre of a regime founded on hostility to the United States, as well as open the door to political and economic changes that could hasten the country's transformation. Even under normal circumstances, this prospect would be alarming to a regime facing a crisis of legitimacy at home, but it is particularly unwelcome with the presidential election looming and the possibility of renewed unrest similar that seen in June 2009.

Rather than seek alternative approaches, the United States and its allies should bring greater focus and coherence to their current strategy. Particular care should be taken to ensure that this approach is sustainable over time, since long-term delay in Iran's nuclear progress may be achievable even if an agreement remains elusive. Specifically, a revitalized strategy should have four components:

• Economic sanctions. Washington and its allies should strengthen the sanctions, but also aim them at the regime and its supporters to minimize the effects on the broader population. This includes more-robust measures to constrain Iran's oil revenues, as well as more-aggressive efforts to limit the movement and target the assets of regime figures.
• Military pressure. Washington should bolster the credibility of its military threats in several ways: through better discipline in its public messaging regarding U.S. and Israeli military options, increased military cooperation with regional allies, a more active approach to Syria, and the articulation of clearer redlines for Iran's nuclear program.
• Support for the opposition. The United States should significantly step up its efforts to aid the Iranian opposition and boost the international profile of Iranian dissidents. This could take both traditional forms (e.g., U.S. officials meeting with opposition figures and bringing attention to their cause) and nontraditional forms (e.g., helping dissidents defeat regime efforts to interfere with their communications).
• Negotiations. Washington should leave the door open for direct U.S.-Iran talks in order to demonstrate good faith to allies and the Iranian people. Yet it should not allow the prospect of such discussions to distract from the P5+1 negotiations, which remain the best forum to marshal international pressure on Tehran.

Michael Singh is managing director of The Washington Institute.