It’s been nearly two weeks of the Iran war. The US-Israel strikes have certainly hit Iran hard, but a collapse of its government is nowhere in sight and was not even expected by informed stakeholders. On the other hand, though not talked about, there are sufficient reports of Israel itself being hit, quite apart from strikes in the GCC countries, and not just US assets there. And, without a doubt, global ramifications of the war are being felt through rising oil and gas prices, along with availability issues.

Global impact and muted diplomatic response

Mediation and diplomacy should have been the order of the day at such a time. However, the UN SG, true to present times, is silent, and so are most Europeans, hit with another hydrocarbon whammy but not wanting any further transatlantic wobble. So are the GCC countries, who had reached out to President Trump with expensive gifts and promises of major investments in the US in the hope of both protection and peace. India is in high-level contacts with Iran and the Gulf states for the flow of its critical needs—oil and gas—and the well-being of the millions of Indians in the region.

Possibility of a negotiated deal emerges

However, there appears to be some light for a ‘deal’, with Iranian President Masoud Pezeshkian coming out with three conditions for stopping the war: recognition of Iran’s rights, war compensation, and firm international guarantees against future aggression.

At the same time, a statement on behalf of Iran’s new Supreme Leader, Mojtaba Khamenei, vows revenge and warns the Gulf states about hosting US bases. Defiant, as expected, it speaks of continuing to leverage the Straits of Hormuz, the key global oil waterway controlled by Iran. Can this leverage be leveraged, and Iranian oil become a pivot for a ‘deal’? This should not only interest President Trump but also possibly be the biggest motivator for him vis-à-vis Iran.

Political and strategic motivations at play

Of course, for both President Trump and Prime Minister Netanyahu, there are personal issues surrounding the war—for the former, distraction from the Epstein matter, and for the latter, keeping at bay the corruption charges that he may face out of office. There are also issues of legacy for both, and, of course, domestic politics in the US, which has always allowed Israel much leverage and has been particularly well used by Prime Minister Netanyahu with President Trump.

President Trump has often invoked the Venezuelan parallel in Iran and noted the US control of its oil. Again, while earlier having spoken of freeing the Iranians from their theocratic government, now articulations speak of a change from within the Iranian establishment, though, of course, there has to be, and is, a stated unhappiness with their choice of a new Supreme Leader, the son of the previous Supreme Leader.

Historical context and oil geopolitics

Let us go back in history. Trump 1.0 is known for his withdrawing the US from the Paris Agreement on climate change and the JCPOA, the nuclear deal between the P5 and Germany with Iran that eased sanctions on the latter in return for restricting its uranium enrichment to only civil use levels. The oil connection in the two is worth noting—the US was freed from taking on (even voluntarily) obligations to restrict the use of fossil fuels, including oil, and a stranglehold on major oil exporter Iran was reintroduced. And, in the Middle East, the Abraham Accords helped build Israel’s ties with several in the Arab world, especially the oil-rich UAE.

Western sanctions on Iran, over the past decades or more, effectively drove the nearly USD 350 billion economy and 93 million society away from the West towards the Chinese, who also started sourcing over 10% of their crude imports from Iran. In the context of both Venezuela and Iran, it is suggested that crimping the Chinese on their oil sources and ensuring that oil trading remained in USD were also important motivators. These issues certainly have merit but would appear to be collateral benefits, with all indications still signalling President Trump wanting to do a deal with China and pay a state visit to them in April.

Oil as the central bargaining chip

This emphasis on oil and its control fits in President Trump’s world view that oil is critical to prosperity and power and, hence, the US must control it. Interestingly, while the US strikes have hit several targets in Iran, oil installations have been kept out, and one Israeli strike on these, reportedly, drew a frown from across the Atlantic. Also, while boots on the ground in general in Iran don’t appear to be on the mind of the US, there are indications of such an action being contemplated for Kharg Island, a tiny speck in the Persian Gulf from where Iranian oil is shipped. Oil prices also have huge domestic ramifications in the US, as seen by the most recent action of the administration of a 30-day sanctions waiver for all countries to buy Russian oil, no matter the unhappiness of Ukraine and the Europeans on this pass for Russia.

Iran going nuclear and developing intercontinental missiles has been stated as an existential threat not only to Israel but also to international peace and security. Any deal must, therefore, include Iran accepting acceptable restrictions on its nuclear and other offensive capacities, but oil appears the real sweetener for a ‘deal’ with Iran. Policy analysts will find the necessary national security imperatives for such an action, no matter if it is essentially being driven by President Trump’s instincts.

The writer is former Ambassador of India to Nepal.

© Free Press Journal