The Coronavirus Crisis is a Diplomatic Opportunity for the United States and Iran

If Iran’s leaders thought things couldn’t get worse, they were wrong. The country faces three simultaneous crises: a public health emergency that is worsening by the hour, tensions with the United States that have once again grown in the past few days, and an economic picture that could go from troubled to dire in a matter of months.

The confluence of a coronavirus pandemic, security threats, and financial troubles has deepened the political system’s legitimacy crisis in the wake of last month’s parliamentary elections that saw the lowest turnout in the Islamic Republic’s history. Washington might view this as a validation of its so-called maximum pressure strategy against Tehran, but if it fails to capitalize on this moment to de-escalate tensions and lay the groundwork for a mutually beneficial diplomatic settlement, the leadership in Tehran is likely to become more aggressive in the region, increasing the risk of a conflict that neither side appears to want.

Since the dramatic escalations of late 2019 and early 2020, which culminated in the killing of the Islamic Revolutionary Guard Corps commander Qassem Suleimani and Iranian missile strikes on Iraqi bases hosting U.S. forces, both Iran and the United States appeared content to return to their respective corners.

But there has been a steady stream of incidents in Iraq, with at least seven attacks near U.S. diplomatic facilities inside Baghdad’s Green Zone and U.S. military installations in Iraq throughout January and February. These attacks spiked on March 11 following a barrage of rockets that killed three members of the U.S.-led coalition, including two Americans, and injured more than a dozen others at an Iraqi army base, Camp Taji, north of Baghdad.

U.S. Secretary of Defense Mark Esper subsequently assessed that “Iranian-backed Shiite militia groups” were responsible. Secretary of State Mike Pompeo warned ­that “those responsible must be held accountable.” A day later, the United States retaliated against an Iranian-backed Iraqi militia in Iraq, which in turn fired more rockets into Camp Taji on March 14 and again on March 17.

This latest moment of peril is playing out against the backdrop of a dramatic COVID-19 outbreak in Iran, which has the third-highest number of confirmed cases and fatalities anywhere in the world. The Iranian government was slow in responding to the outbreak; and when it finally realized its scale and scope, Tehran was hampered by shortages caused by sanctions. Moreover, the government has kept a worryingly tight grip on the information flow to save face, prompting fears that the death toll—currently listed as 988—is probably much higher than the official figures suggest.

With Tehran’s initial response being dismissive of the risks of the virus’s spread and slow to mobilize against it, the government is now pleading for international assistance. Having already scored several calamitous own goals in recent months—raising fuel prices with little warning in November 2019, then violently suppressing subsequent protests, and in January downing a Ukrainian civilian airliner in the apparent belief it was an incoming U.S. missile—the government’s response to the coronavirus crisis could increase the population’s sense that its leadership is incompetent.

Meanwhile, the impact of the rapidly spreading disease and collapse in oil prices will likely present almost unprecedented challenges to an economy that is already beset by government mismanagement and under siege from U.S. sanctions.

One Iranian official calculated a drop of 18 percent in trade as a result of the pandemic—and that was before Iraq, a key regional trade partner, announced a full closure of the two countries’ common land borders and the price of crude tumbled below $30 per barrel. (While Iran’s exports have been blocked by the United States since April 2019, it has continued to make sales to China, albeit at sharply reduced levels.) The combination of reduced regional trade, evaporation of remaining oil revenue, and COVID-19’s impact on domestic business could prove catastrophic.

But that doesn’t mean that Tehran will bow to U.S. pressure and back down. Indeed, since May 2019, when the Iranian government chose to counter U.S. maximum pressure with a blend of nuclear and regional provocations, the system’s hard-liners have contended that high-risk brinkmanship yields greater dividends than restraint.

The coronavirus outbreak has now put more pressure on the leadership’s calculus. Feeling besieged and with no obvious diplomatic exit ramp, Iran might conclude that only a confrontation with the United States might change a trajectory that’s heading in a very dangerous direction. This is also the view of Gen. Kenneth McKenzie, the head of U.S. Central Command, who told Congress on March 10 that the outbreak “probably makes them, in terms of decision-making, more dangerous rather than less dangerous.”

With U.S. President Donald Trump focused on the domestic economic and electoral effects of the coronavirus and the Iranian leadership highly reluctant to display any weakness to the United States, neither side is likely in the mood to engage the other.

That would be a missed opportunity. Indeed, both Washington and Tehran have floated ideas that, if acted upon, could break the current vicious cycle. Pompeo has urged the Iranian government—which furloughed tens of thousands of convicts due to fears of an epidemic in prisons—to free U.S. prisoners and other dual and foreign nationals on humanitarian grounds. The death of any of those inmates from COVID-19 would be a stain Iran might find hard to erase.

Conversely, Iran has asked the International Monetary Fund for emergency funding and a substantial list of essential equipment ranging from gloves and masks to portable respiration and X-ray machines. If the Trump administration stands in the way of such basic needs—by voting against an IMF loan to Iran—the United States would find it hard to overcome the impression that it had acted inhumanely.

The most logical and mutually beneficial outcome would be a two-phased humanitarian de-escalation. Iran would need to first agree to furlough all detained foreigners as the U.S. facilitates the transfer of medicine and medical equipment Iran needs to contain the outbreak and save lives without any sanctions-related delays.

In the second phase, the U.S. government could agree not to block the IMF loan to Iran while Tehran freezes its nuclear escalation and reins in its allied groups in Iraq, preventing any further attacks on U.S. forces and assets. This phase could also comprise another prisoner swap, either on par with the one-for-one exchange that happened back in December or, even better, a broader exchange of prisoners. This would be a win-win: putting tensions with Iran on ice, providing Trump with another success in his efforts to free Americans detained abroad, and providing Tehran with some economic reprieve and the means to save lives at home.

Since 2018, when the Trump administration pulled out of the nuclear deal with Iran, Washington and Tehran have been on a collision course pitting unrealistic U.S. demands against Iranian inflexibility. For either side to let a possible diplomatic off-ramp pass by would mean that a dangerous and deadly situation might again take a turn for the worse.