Arrow Down Arrow Left Arrow Right Arrow Up Camera icon set icon set Ellipsis icon set Facebook Favorite Globe Hamburger List Mail Map Marker Map Microphone Minus PDF Play Print RSS Search Share Trash Crisiswatch Alerts and Trends Box - 1080/761 Copy Twitter Video Camera  copyview Youtube
Regional Risks of Rising U.S.-Iran Rivalry
Regional Risks of Rising U.S.-Iran Rivalry
Supreme leader Ayatollah Ali Khamenei looks through binoculars during the test firing of short- and medium-range missiles, on 18 September 2004. AFP PHOTO/Str

Regional Risks of Rising U.S.-Iran Rivalry

The U.S. is pursuing a "maximum pressure" campaign against Iran that includes the re-imposition of key energy and banking sanctions. With Tehran refusing to capitulate over its nuclear program or regional policies, the U.S.-Iran rivalry could escalate across the region.

The re-imposition of U.S. sanctions against Iran’s banking and energy sectors on 5 November is a key element of Washington’s “maximum pressure” campaign against Tehran. President Donald Trump’s decision to pull out of the 2015 Joint Comprehensive Plan of Action (JCPOA) in May presaged a more ambitious strategic objective: to substantially recast not only Tehran’s nuclear activities, but its domestic and regional policies as well. The result arguably is one of the most audacious U.S. policy plays toward Iran since the 1979 revolution, playing out across a fractured and fragile region.

President Trump’s hostility to the JCPOA was evident on the campaign trail, and his administration adopted a hard stance against Iran from its early days: National Security Adviser Michael Flynn put Iran “on notice” in February 2017, and Trump himself castigated Iran during his May 2017 visit to Saudi Arabia. But the contours of his administration’s Iran policy only became clearer at the start of 2018, when the president announced an ultimatum that the U.S. would withdraw from the JCPOA unless its “disastrous flaws” were remedied. Months of negotiations with European allies failed to satisfy the White House, and so in May the president followed through on his threat to pull Washington out of the nuclear agreement.

Yet the JCPOA withdrawal was only the starting point for a broader and more aggressive campaign whose stated objective is to compel Iran’s return to the negotiating table, but whose likelier goal is to heighten pressure on Tehran to cede perceived regional gains and contend with growing unrest at home. Secretary Pompeo articulated specific (and probably unrealistic) objectives on 21 May: a dozen demands encompassing Iran’s nuclear and missile programs, its support for an array of hostile proxies from Afghanistan to Yemen and its detention of dual nationals.

European leaders share Washington’s concerns over much of Iran’s behaviour [...] but diverge with the U.S. over how to change it and, in particular, over the future of the nuclear agreement.

If those are the aims, sanctions – not merely those reinstated in August and next week, but scores of additional designations against both Iranian and Iran-linked individuals and entities as far afield as Bangkok and Kuala Lumpur – are the primary means: they underscore in no uncertain terms that foreign firms will encounter little leniency if found in breach of unilateral U.S. restrictions. They are not the only means: over the past several months, U.S. officials have sharpened their public information campaign against the Islamic Republic, convinced that internal discontent, manifested in protests and labour strikes inside Iran, can be amplified through wider messaging on elite corruption, human rights abuses and environmental malpractice. Secretary Pompeo has pledged that a new U.S.-sponsored Persian-language media initiative “will span not only television, but radio, digital and social media format, so that ordinary Iranians inside of Iran and around the globe can know that America stands with them”. 

European leaders share Washington’s concerns over much of Iran’s behaviour, notably its missile program and role in Syria and Yemen, but diverge with the U.S. over how to change it and, in particular, over the future of the nuclear agreement. So long as Iran lives up to its end of the nuclear bargain, they say, the deal’s remaining members will do the same. The approval of blocking statutes to shield European firms from extraterritorial U.S. penalties and creation of a “special purpose vehicle” that provides financial channels for Iran-related transactions aim to offset U.S. sanctions and facilitate some of the trade Iran expects for its JCPOA compliance. These measures have done little to halt the departure of dozens of European and other international firms. Nevertheless, they provide the Rouhani administration with a diplomatic fig leaf – and perhaps, once implemented, enough of an economic fig leaf – to hold the line against domestic voices urging Iran’s own JCPOA withdrawal.

For the moment, the Iranians are willing to face attrition– in which both sides try to wear each other down – rather than capitulate, in part or in whole, to U.S. demands. They feel that while Washington brands Iran as an “outlaw regime”, successive developments – the P4+1’s continued support of the JCPOA, the 3 October ruling of the International Court of Justice in Iran’s sanctions lawsuit against the U.S., even the Financial Action Task Force’s decision last month to hold off on the re-imposition of countermeasures – put Iran firmly on the diplomatic high ground. They argue that efforts to bring Iran’s oil exports down to zero are doomed to fail, and that the sanctions web the U.S. is spinning on its own may be sticky, but gives enough room to wiggle. They assess that in Syria and Iraq, political and military developments favour their local allies and bode well for maintaining Iranian influence. And they believe that despite U.S. protestations to the contrary, Washington’s real end game is regime change, not shifts, however substantial, in behaviour; hence no concession on Tehran’s part will make a difference. “In the last 40 years… the current administration is the most vengeful government toward Iran”, President Rouhani remarked in October. “De-legitimisation of the system is their ultimate goal”.

The Iranians believe that despite U.S. protestations to the contrary, Washington’s real end game is regime change, not shifts, however substantial, in behaviour.

Neither Washington nor Tehran is seeking to directly engage the other militarily at this stage. Across the region, however, are numerous flashpoints where the zero-sum logic of U.S.-Iran rivalry plays out from the Persian Gulf to the Mediterranean; Crisis Group last year launched a Trigger List platform to monitor these nodes of tension. While some worst-case scenarios have been avoided so far – the Syrian regime retaking the country’s southwest, for example, did not yield the feared overt Israeli-Iranian confrontation – there are three main concerns in the months ahead.

The first is that each side will pursue incremental escalation. In Iran’s case, this could take place either within the nuclear realm (minor but nonetheless real violations of the JCPOA in response to the U.S.’s withdrawal) or in the region. Given that Tehran’s hope for economic lifelines rely in significant measure on the P4+1’s continued willingness to counter U.S. sanctions, which in turn depends on Iran’s compliance with the deal, a likelier Iranian response to U.S. pressure in the short to medium term will be through regional activism. Reports that Iran may have transferred ballistic missiles into Iraq are one indication, as are (unverified) U.S. accusations that Iranian-backed forces targeted the U.S. presence in Basra. The U.S. also seems intent on targeting Iran’s regional presence: statements by U.S. officials that it will remain in Syria so long as any Iranian-controlled force remains there suggest a focus on reducing Tehran’s reach and a growing tendency to view regional developments through an Iran-centric lens.

The second concern is that the actions of local actors may deliberately or inadvertently draw their backers into a clash. Both of the U.S.’s main allies in the region are already pursuing their own campaigns against Iran. In Yemen, Saudi Arabia has, since 2015, spearheaded a costly campaign to oust Huthi forces, with U.S. support. For Riyadh, the 200-odd missiles fired in their direction from Yemeni territory may have been launched by the rebels, but bear Iranian fingerprints. Meanwhile Israel, concerned that Iran is already present in its southwest (Gaza) and north (Lebanon), is fighting Tehran’s efforts to cultivate Syria as a new front to the northeast. Israeli officials recently tallied more than 200 strikes against Iranian and Iran-linked targets in Syria since 2016, ramping up a campaign that began in 2013.

For its part, Iran dismisses culpability for the Huthi missile strikes and has so far largely refrained from directly responding to the Israelis. As a senior Iranian official told Crisis Group last month, “Israel has tried to provoke… [but we are] not falling into a trap”, and adding bluntly about Iran’s role in Yemen: “We don’t need it”. Yet future hostilities between Iranian or Iran-backed forces and U.S. allies could produce an escalation that neither side necessarily seeks. In Yemen, a Huthi strike causing significant casualties or damage inside Saudi Arabia could pull the U.S. directly into the Yemen war or in confrontation with Iran. And in Syria, the Netanyahu government, sensing Iranian reluctance to strike back and a U.S. carte blanche for its actions, could continue to expand its sights: as Defence Minister Avigdor Lieberman asserted, “We are not limiting ourselves just to Syrian territory… Israel’s freedom is total”.

Future hostilities between Iranian or Iran-backed forces and U.S. allies could produce an escalation that neither side necessarily seeks.

That sense of freedom, to which Iran may eventually feel compelled to respond, was on display in June, when Israel reportedly carried out airstrikes near the border between Iraq and Syria. The operation, which killed Syrian regime forces as well as Iran-backed Iraqi paramilitaries, highlights how the various regional fault lines increasingly converge and are interconnected: the area around al-Bukamal, which anchors the southern tip of the Euphrates River Valley and is the de facto line of separation between pro-Syrian regime forces and U.S.-backed Syrian Democratic Forces (SDF), has seen Israeli airstrikes, Iranian missile and drone strikes, Iraqi air force sorties and U.S.-led coalition bombardments. The continued degradation of ISIS is perhaps the only interest these disparate forces might share.

All this is sobering enough, but even if Iran and the U.S. were to settle into an uneasy standoff – Washington waiting for Iran’s government to succumb to the impact of sanctions, Iran calculating that it can weather the storm – and even if auxiliary conflicts in the region also remain on low boil, a third concern is that the combination of mutual distrust and high friction could see a minor incident spiral dangerously. For example, Iran’s threats to block the Strait of Hormuz may be hyperbolic, and U.S. forces report Iran has stopped interfering with their vessels in the Gulf over the past year. But a miscommunication could be all it takes for a naval incident to escalate into a confrontation.

Washington may hope that its pressure campaign will crack the Islamic Republic. The risk, however, is that their standoff will further fracture a region already on the verge of breaking apart.

A man exchanges Iranian Rials against US Dollars at an exchange shop in the Iranian capital Tehran on 8 August 2018. AFP/Atta Kenare

The Illogic of the U.S. Sanctions Snapback on Iran

The Trump administration believes that ratcheting up economic pressure on Iran will compel the Islamic Republic to curtail its disruptive Middle East policies. History suggests otherwise. Both Washington and Tehran should step off their current escalatory path.

  • Share
  • Save
  • Print
  • Download PDF Full Report

What’s new? A 40-year analysis of Iran’s economic performance and regional policy reveals little to no correlation between the two, as Tehran has continued to pursue policies it deems central to its national security no matter its degree of economic wellbeing at home.

Why does it matter? The Trump administration hopes that sanctions will force Iran to curb its regional activities. But data shows that outcome is uncertain as changes in Iran’s wealth have had little impact on the direction or capabilities of its regional policy. Sanctions risk empowering harder-line officials in the Islamic Republic and prompting them to lash out, exacerbating regional tensions.

What should be done? The U.S. optimally should leverage its sanctions to de-escalate regional tensions. That requires acknowledging Iran’s legitimate security concerns as long as Iran acknowledges those of its regional rivals. However unlikely at this time, the U.S., Iran and Gulf Arab states should take steps to build a more stable regional security architecture.

I. Overview

The intuitive presumption at the heart of the Trump administration’s policy toward Iran is that, by reducing its resources, economic sanctions on Iran will diminish its disruptive activities abroad. The sanctions that the U.S. Treasury Department will re-impose on Iran on 5 November are, in the words of Secretary of State Mike Pompeo, intended to push Iran into making a choice: “either fight to keep its economy off life support at home or keep squandering precious wealth on fights abroad. It won’t have the resources to do both”.

But historical data shows little, if any, correlation between the resources at Iran’s command and its regional behaviour. Rather, the extent to which the Islamic Republic feels threatened or senses opportunity in its neighbourhood largely defines its conduct. Measured against that standard, the Trump administration’s aggressive policy is likelier to spur Iran’s regional activism than to curb it. A better alternative exists. It would require the Trump administration not to ignore Iran’s regional interests, but to acknowledge that it has legitimate security concerns, and for Iran to acknowledge that as long as it pursues policies that its neighbours and others perceive as aggressive, tensions will persist and the risk of direct military confrontation will rise. A more stable region is possible only if the U.S. moves to provide Iran with viable security assurances, in return requiring that Tehran allow its non-state allies to integrate into their countries’ security and political systems and halt proliferation of ballistic missile technology across the region. Though currently a remote aim, both sides should work with other regional actors toward an inclusive security architecture.

Video: The Fallacy of U.S. Sanctions on Iran

II. Contrasting Eras of Iranian Regional Policy

Studying how Iran has devised its regional policies over the last four decades reveals that its choices have rarely been a function of its economic performance or resource availability.

A. “Forward Defence”

Iran’s regional defence policy was defined and shaped at a time of economic scarcity. Its “forward defence” policy – an effort to exploit weak states, such as Lebanon and post-2003 Iraq, where it can expand its influence and fight through proxies without direct harm or threat to itself – originated in the 1980s.[fn]For more background on Iran’s defence doctrine, see Crisis Group Middle East Report N°184, Iran’s Priorities in a Turbulent Middle East, 13 April 2018.Hide Footnote Then, the newly established order in Tehran, which aspired to export its revolution abroad, simultaneously felt besieged by foreign and domestic enemies seeking to undermine it and isolated in the face of invasion by Saddam Hussein’s Iraq, armed to the teeth by Arab and Western states.

At the time, Iran suffered extreme economic hardship due to revolutionary turmoil, the devastating war with Iraq and falling global oil prices. Yet as shown in Graph 1, Iran’s creation of Hizbollah in Lebanon in 1982, the bombing of the U.S. Marine barracks in Beirut the following year, and a series of targeted terrorist attacks in Europe (in which Europeans saw Iran’s hand) occurred amid falling oil revenues and economic downturn.[fn]“Outlaw Regime: A Chronicle of Iran’s Destructive Activities”, Iran Action Group, U.S. State Department, September 2018.Hide Footnote A wealthy Iran may well have acted even more aggressively insofar as it would have had more resources at its disposal. But the point is that economic deprivation did not moderate the Islamic Republic’s conduct, make it more inwardly focused or lead it to rein in its regional proxies.

Graph 1: Iran's GDP growth and oil revenue (1980-1988) IMF

The ensuing decade (1988-1998) was marked by post-war reconstruction amid rising oil revenues (due in part to heightened global oil prices in the aftermath of the first Gulf War) and runaway inflation. None of this, however, appears to have produced any tangible change in Iran’s backing for Hizbollah in Lebanon or Hamas and Islamic Jihad in Palestine. Nor did the 1997 Asian financial crisis that caused oil prices to collapse and Iran’s oil revenue to fall from $16.7 billion in 1997 to $9.7 billion in 1998. In other words, the trajectory of Iranian foreign policy was essentially impervious to the fluctuations in its economic wellbeing.

B. Pragmatism and Diplomacy

Iran’s destabilising activities declined in the early 2000s when, as shown in Graph 2, both oil proceeds and gross domestic product (GDP) were on the rise. During this period Iran significantly improved its relations with its Arab neighbours, helped the U.S. in working on the post-Taliban order in Afghanistan, and briefly suspended its nuclear program in negotiations with the Europeans – though it admittedly continued to support Hizbollah and other non-state actors in the Levant.[fn]Howard Schneider, “Saudi pact with Iran is sign of growing trust”, Washington Post, 17 April 2001; James Dobbins, “Negotiating with Iran: Reflections from Personal Experience”, The Washington Quarterly (2010), pp. 149-162; Crisis Group Middle East Report N°18, Dealing with Iran’s Nuclear Program, 27 October 2003.Hide Footnote

Again, this hardly demonstrates that Tehran acts more responsibly when its economy performs better; non-economic reasons – notably the more pragmatic perspective of Iran’s reformist government at the time and concerns about a possible U.S. attack after its 2003 invasion of Iraq – can help explain Iran’s behaviour. But it underscores that realities other than the resources at its disposal determine Iran’s policy choices.

Graph 2: Iran’s GDP growth and oil revenue (1998-2003) IMF, Central Bank of Iran

Between 2003 and 2011, Iran had two key priorities. First, it worked to ensure that in the aftermath of the U.S. invasion of Iraq a central government would emerge in Baghdad that, while strong enough to keep the country together and secure its borders with Iran, was not so strong as to once again pose a threat. Second, it aimed to push U.S. forces out of its western neighbour’s territory. To achieve the former, it relied on relationships it had cultivated for decades with Iraqi leaders (particularly Shiite Islamists and Kurds); for the latter, it trained and equipped several Shiite militias that targeted U.S. forces in Iraq. This period coincided with the nuclear standoff and imposition of a panoply of unilateral, multilateral and international sanctions. But Tehran was nevertheless flush with money thanks to high oil prices. Again, this shows that its policy of backing non-state actors has remained largely consistent in good economic times as well as bad. As a senior Iranian official put it, “when you rely on a [‘forward defence’] strategy for your survival, you rely on it come hell or high water”.[fn]Crisis Group interview, Tehran, February 2018.Hide Footnote

C. Regional Escalation

As evidence that economic downturns do not necessarily curb Iranian regional activism, the most telling period is 2011-2015 (see Graph 3). A stifling web of multilateral and international sanctions inflicted maximal harm on the country’s economy, which shrank at the rate of 7.7 per cent in 2012 as oil exports declined by half, the currency fell by 200 per cent and inflation rose to almost 40 per cent. Yet this period coincided with what many consider the most significant expansion of Iran’s military intervention in the region, a product of the uprising in Syria, Tehran’s growing rivalry with Riyadh and the fight against the Islamic State.

Graph 3: Iran’s GDP growth and oil revenue (2011-2015) IMF, Central Bank of Iran

According to the Stockholm International Peace Research Institute, Iran’s arm transfers to allies in Syria and Iraq peaked in this period.[fn]SIPRI Arms Transfers Database, available at https://www.sipri.org/databases/armstransfers.Hide Footnote Resource scarcity at home neither prevented Iran from extending a multibillion line of credit to Damascus nor from mobilising Shiite militias from Afghanistan, Pakistan and Iraq to fight in Syria. Iran also stepped up its support for Yemen’s Huthi rebels, training and equipping them.

D. Post-Nuclear Deal Boon?

Critics of the 2015 Joint Comprehensive Plan of Action (JCPOA) contend that Iran grew more belligerent in the aftermath of the nuclear accord, which provided it with billions of dollars in unfrozen assets. Yet it is hard to point to anything Iran did after the deal – from supporting Yemen’s Huthi rebels to propping up the Syrian regime – that it was not undertaking prior to the agreement.

There was one notable change: a nearly 30 per cent increase in the country’s military budget.[fn]Clare Foran and Nicole Gaouette, “Trump repeats misleading claim on Iran's military budget”, CNN, 13 May 2018.Hide Footnote Even that should be assessed in the right context. As shown in Graph 4, the 2016 bump brought spending back to 2009 levels – not to a new high. More importantly, Iran was broadening its regional involvement at a time when it was spending less on its military (2011-2015), suggesting that this expansion is a product of opportunity or perceived necessity, not economics, and that the increase in defence spending does not necessarily have a discernible impact on the ground.

Graph 4: Iran’s Military Expenditure per GDP Percentage (2007-2017) World Bank

Besides, Tehran’s military expenditure likely is not in and of itself a main U.S. concern. In 2017, Iran’s annual defence spending of $16 billion paled in comparison to Saudi Arabia’s $76.7 billion.[fn]SIPRI Military Expenditure Database, available at https://www.sipri.org/databases/milex.Hide Footnote Iran spent less than 3 per cent of its GDP on defence (where sectoral spending ranks fourth in per capita terms after social insurance, education and health), not excessive for a country of its size.[fn]راستی‌آزمایی: بودجه نهادهای نظامی در ایران چقدر است؟” [“Fact checking: What is the budget of Iran’s military institutions”], BBC Persian, 13 August 2017; Mark Perry, “Putting America’s enormous $19.4 trillion economy into perspective by comparing US state GDPs to entire countries”, American Enterprise Institute, 8 May 2018.Hide Footnote

Iran’s activities in the region are inherently – and deliberately – inexpensive and thus largely impervious to economic fluctuations. The Trump administration contends that Iran has spent $16 billion to project power in the region since 2012. If accurate – though the figure is likely inflated – that makes for an average of $2.6 billion per year. This is not an onerous expense for a country that, even under sanctions, will reap more than $25 billion in oil revenues in 2019 and holds more than $100 billion in foreign reserves.

III. The Perils of a Sanctions Backlash

Iran may well choose to tactically retreat or halt certain activities, as it has in the past. It is likewise logical that when it has additional resources it can continue expanding its regional footprint. But nothing in the history of the Islamic Republic suggests that sanctions will prompt a substantive shift in its foreign policy. To believe otherwise is to misunderstand the sources of Tehran’s conduct, predicated on the notion that strategic depth, achieved through backing allies, partners and proxies, is vital for its national security. Israel’s invasion of Lebanon in 1982, the U.S. invasion of Iraq in 2003 and the Saudi-led war in Yemen since 2015 allowed Iran to exploit chaos and deepen its clout. In all these cases, it took advantage of its adversaries’ mistakes and filled security vacuums created by failing states.

For now, banking on the remaining signatories to the JCPOA’s effort to provide it with an economic lifeline in the face of unilateral U.S. sanctions, Tehran appears to be pursuing a relatively cautious path in the region.[fn]In May, Crisis Group published a list of recommendations aimed at preserving a certain degree of trade between Europe and Iran as means of preserving the JCPOA. Some of those suggestions, including the development of “specially purposed vehicle” to conduct financial transactions, are close to materialising. Crisis Group Middle East Report N°185, How Europe Can Save the Iran Nuclear Deal, 2 May 2018; “EU mechanism for Iran trade to be symbolically ready on Nov. 4: Diplomats”, Reuters, 24 October 2018.Hide Footnote It has largely refrained from responding militarily to more than 200 Israeli strikes on its assets in Syria and engaging in skirmishes with the U.S. Navy in the Strait of Hormuz.[fn]“Israel says struck Iranian targets in Syria 200 times in last two years”, Reuters, 4 September 2018; “Iranian boats mysteriously stop harassing U.S. Navy”, Daily Beast, 8 October 2018.Hide Footnote

Paradoxically, however, Tehran could become less risk-averse if Washington were to succeed in crippling its economy. As a senior Iranian official put it, “if the economy spirals out of control, the leadership in Tehran will welcome a crisis that could change the subject domestically and rally the population round the flag”.[fn]Crisis Group interview, New York, September 2018.Hide Footnote Given the high level of friction between Iran, the U.S. and their respective allies in the region, such a clash could easily spiral into a disastrous conflict.[fn]These flashpoints can be monitored on Crisis Group’s Iran-U.S. Trigger List.Hide Footnote

If its goal is to constrain Iran’s regional reach, the Trump administration would be wiser to address the political drivers of conflict.

Indeed, there are early signs that the U.S. approach might be backfiring. The Trump administration has accused Iran of targeting U.S. diplomatic facilities in Baghdad and Basra through its allied Shiite paramilitary groups. If true, these attacks would constitute an escalation unseen in Iraq since 2011 and indicate that tightening the noose of sanctions has made Iran more, not less, aggressive. Equally risky is a scenario in which Iran’s economy stays afloat and U.S. sanctions fail to curb Iran’s regional policy. This could prompt U.S. allies in the region to provoke a confrontation between Washington and Tehran that would significantly weaken their regional foe on their behalf. As an Israeli official put it, “my distinct impression is that [Prime Minister Benjamin] Netanyahu is pushing toward actual use of force by the U.S. against Iran. Unclear of what scope – a single attack, a broader move?”[fn]Crisis Group interview, Tel Aviv, October 2018.Hide Footnote

If past is prelude, the Islamic Revolutionary Guard Corps, which is primarily responsible for implementing Iran’s regional policies, will again benefit – both politically and economically – from sanctions. Its influence expanded markedly amid the nuclear standoff and mounting pressure of sanctions (from 2006 to 2013). It controls the smuggling networks and embezzles billions in public funds through complex shell games purportedly aimed at skirting U.S. sanctions. At the same time, the middle class, which tends to drive social protests and exerts a countervailing pressure on the state, will shrink and suffer from critical shortages of food and medicine.

If its goal is to constrain Iran’s regional reach, the Trump administration would be wiser to address the political drivers of conflict, which are informed by local factors. To leverage the pressure it has managed to accumulate against Iran to produce a shift in Tehran’s policy, it would need to acknowledge Iran’s legitimate security concerns, namely its comparatively inferior conventional military capabilities. Tehran is unlikely to agree to compromise its national security assets for economic incentives. The U.S. optimally would signal its willingness to address these concerns and provide viable security assurances to Iran’s leaders. In parallel, it would work with other regional actors toward a broader security architecture that includes Iran. That said, such a policy shift is hard to envision given the administration’s current posture toward Tehran.

For its part, and regardless of what Washington does, Tehran should take steps to address its neighbours’ concerns – most importantly to recognise that the more its security doctrine promotes expeditionary warfighting, the more it will provoke aggressive pushback by its adversaries. In the same vein, Iran should encourage the integration of its non-state allies into their countries’ security bodies under the direct and effective control of their central governments, and it should stop proliferating ballistic missile technology around the region.

The alternative to both sides taking a step back from their escalatory path is a sanctions regime that penalises Iran and the Iranian people, but does not enhance peace and security in the region and could well lead to war.

Washington/Brussels, 2 November 2018