Michael Hernandez
January 20, 2016•Update: January 21, 2016
By Michael Hernandez
WASHINGTON
An estimated $100 billion in sanctions relief will likely bolster Iran’s support for rogue groups in the region, according to experts. But the extent to which Tehran benefits from the economic relief is severely limited by global oil trends.
International sanctions on Tehran were lifted over the weekend, paving the way for the country to reap economic benefits for its compliance with a landmark international accord with world powers.
Brokered in July, the deal subjects Iran’s nuclear program to unprecedented curbs and inspections in return for the lifting of economic sanctions that have prevented it from fully participating in the global oil trade.
That funding will likely flow directly into the pockets of militant groups that Iran has historically supported in the Middle East, according to Jonathan Schanzer, a former terrorism finance analyst at the Treasury Department.
“Iran already funds terrorism, and they’ve been doing it on a shoe string budget,” Schanzer, who is currently the vice president of research at the Foundation for Defense of Democracies, told Anadolu Agency.
Following the lifting of sanctions, “the likelihood shoots up exponentially that Iran will allocate some of those funds towards terrorist groups, and that would include, but certainly not be limited to Hezbollah, Palestinian Islamic Jihad, Kata’ib Hezbollah in Iraq, other Shiite militias in Iraq, and of course Hamas,” he said.
James Carafano, the Heritage Foundation’s vice president for foreign and defense policy studies echoed the sentiment, saying “logic dictates” that Iran will continue its support for the groups under its “non-transparent regime”.
“That money is going to go into a black box, and we’ll all just be guessing on how it gets spent,” he said.
The Obama administration acknowledged Tuesday that at least some of the additional funds will go toward Iran’s “malign activities”.
“We will acknowledge that they will have more access to more resources and we would expect that they are likely to use at least some of the resources for some of the kinds of malign activities that they have been involved with for quite some time,” White House spokesman Josh Earnest said.
Still, Earnest maintained that the U.S. will seek to counter any such action through its deepened defense and security cooperation with regional allies.
But the global price of oil has been in precipitous decline for months - mitigating the economic benefits that Iran will derive from sanctions relief perhaps more than any other factor.
The price of crude oil fell below $29 per barrel on Tuesday – slightly rebounding from 12-year lows earlier in the day.
“You’re essentially talking about oil revenues that are something on the order, when you really look at it, of just about 36 percent of what they were in 2012 when Iran was not subject to sanctions,” said Anthony Cordesman, the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies.
“That’s not a rich Iran,” he added. Iran will also have to catch up with the realities of years of limited production – further complicating efforts to finance its allies.
“The question of where Iran spends the money has always been one where you have some willingness on Iran’s part to put national security issues well before its own development and domestic population,” Cordesman said. “But this is not going to lead to some kind of mass benefits for Iran -- not given today’s oil prices,” he added.
