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Tehran in No Mood for Compromise

By Ian Bremmer

As Iranian President Mahmoud Ahmadinejad waved goodbye earlier this month to the 15 British sailors and marines his government held prisoner for almost two weeks, many around the world breathed a sigh of relief. Any easing of international tensions over Iran is welcome. But the respite is likely to be short-lived. In fact, the Iranian-British standoff and its resolution reveal several reasons why the conflict over the country's nuclear program is set for further escalation.

First, Tehran released the British troops because it had achieved its political goals, not as a concession to international pressure. Iran's main foreign-policy motivation in seizing the sailors was to express defiance in the face of the latest Security Council resolution over its uranium enrichment program. When Tehran was offered a face-saving opportunity to suggest the British were arrested following an honest misunderstanding, it refused. The Iranians further upped the ante by broadcasting coerced "confessions" from their captives that Britain had been entirely at fault.

Clearly, Tehran is in no mood for compromise. Until the international community agrees on sanctions on the country's energy exports -- which isn't going to happen -- Iran will run more diplomatic stop signs and continue its nuclear development at top speed. Ahmadinejad has warned that Iran's program "has no brakes." No evidence has emerged that there is reason to doubt him. The episode also helped Tehran upstage Saudi efforts to reassert regional leadership at Iran's expense during the recent Arab summit.

U.S. and British officials hoped that pressure for the sailors' release might open divisions within the Iranian leadership. But this latest demonstration of Iran's belligerence revealed no sign of a strategic split between Ahmadinejad and the country's real powerbroker, Supreme Leader Ayatollah Ali Khamenei.

Second, the incident has probably strengthened Iranian elite consensus, because it rallied badly needed domestic support for the country's political leadership. Independent press reports suggest that plenty of Iranians appear to have blamed Britain for the episode and believe the harsh response from their government was entirely warranted. In fact, the only signs of domestic dissent in the Iranian media, including from outlets that have criticized Ahmadinejad on other issues, came from complaints over the relatively early release of the British troops.

Another domestic benefit from the incident: Oil prices spiked during the standoff. Brent crude rose over $7 per barrel and benchmark West Texas Intermediate jumped more than $4. Both eased once the British were released, but Tehran now has more evidence that any escalation of tensions can add much-needed revenue to Iranian coffers.

Third, the incident revealed that Britain had no credible means of forcing Iran to hand over the prisoners. Prime Minister Tony Blair threatened that if Iran refused to free them, the standoff would enter a "new phase." But Blair never detailed what this new phase might mean.

Instead, British officials made plain that a cutoff of existing business relations between the two countries was not on the table. Even if London had moved to tighten economic screws on Tehran, there were plenty of signs that coordinated international economic pressure was not an option. The Chinese government was making public progress on a natural gas supply deal with Iran, even as the diplomatic crisis intensified.

Finally, the resolution of the conflict underlined Iran's growing leverage with the fledgling government of Iraq. Iraqi Prime Minister Nouri al-Maliki agreed to Tehran's demand that he help secure the release of an Iranian official held in Iraq, Jalal Sharafi, deputy secretary of Iran's embassy in Baghdad. It remains unclear who held Sharafi, but official Iraqi help in securing his release suggests Iran knows it can exert pressure to get what it wants from Baghdad.

Following his release, Sharafi claimed to have been tortured "day and night" by American soldiers. In the current environment, many Iranians (and others) are inclined to accept this claim at face value, raising the political cost to the United States of holding five Iranian officials seized in the Iraqi city of Irbil in January. Iran's growing influence in Iraq will make it much more difficult for the Bush administration to break the backs of Iraqi Shiite militia groups -- a key goal of the president's "troop surge" strategy. Tehran's growing clout and its financial backing for some Shiite factions at the expense of others will intensify battles for control of turf and oil revenues in southern Iraq. That, in turn, will generate new instability in areas of the country that have been much less restive that the majority Sunni provinces of central Iraq.

It also spells trouble for Iraq's southern oil fields, which now produce all of the country's 1.6 million barrels of crude oil per day for export. An April 5 bomb attack on oil infrastructure in the area suggests that the worst is yet to come. If so, the risk will grow that sectarian conflict in Iraq will degenerate into a series of proxy wars in which various governments in the region subsidize and arm Iraq's various warring factions.

Finally, Iran's nuclear development continues apace. To mark "National Nuclear Technology Day" on April 9, Ahmadinejad announced that the country can now produce nuclear fuel on an "industrial scale." This claim may well be exaggerated, but several international intelligence agencies had already moved forward their best estimates of how soon Iran could have a nuclear weapons capability. Recent reports from the U.N.'s nuclear watchdog, the International Atomic Energy Agency, have added to the anxiety.

For all these reasons, the relief following Iran's release of British prisoners is likely to be temporary. Soon enough, Tehran's refusal to comply with the terms of yet another Security Council ultimatum will generate another crisis. The heavy U.S., British, and French naval presence in the Persian Gulf creates new risks of market-moving dust-ups with Iran -- by accident or design. Most worrying, Tehran has learned that it has little to lose and much to gain from new confrontations.

Ian Bremmer is president of Eurasia Group, a political-risk consultancy and the author of "The J Curve: A New Way to Understand Why Nations Rise and Fall,". He can be reached via e-mail at

(c) 2007 Tribune Media Services, Inc.

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