US weighs Iran sanctions if talks are rejected

The New York Times

The Obama administration is talking with allies and Congress about the possibility of imposing an extreme economic sanction against Iran if it fails to respond to President Obama’s offer to negotiate on its nuclear program: cutting off the country’s imports of gasoline and other refined oil products.

The option of acting against companies around the world that supply Iran with 40 percent of its gasoline has been broached with European allies and Israel, officials from those countries said. Legislation that would give Mr. Obama that authority already has 71 sponsors in the Senate and similar legislation is expected to sail through the House.

In a visit to Israel last week, Mr. Obama’s national security adviser, James L. Jones, mentioned the prospect to Israeli officials, they said.

The White House refused Sunday to confirm or deny the contents of Mr. Jones’s discussions. But other administration officials said that they believed his goal was to reinforce Mr. Obama’s argument that the Israeli government should stop dropping hints about conducting a military attack against Iran’s nuclear facilities if no progress is made this year, and to give the administration time to impose what Secretary of State Hillary Rodham Clinton calls “crippling sanctions” that might force Iran to negotiate.

The Bush administration considered, and rejected, trying to engineer a cutoff of gasoline to Iran, which produces oil but does not have enough refining capacity to meet its own needs for gasoline.

But enforcing what would amount to a gasoline embargo has long been considered risky and extremely difficult; it would require the participation of Russia and China, among others that profit from trade with Iran. Iran has threatened to respond by cutting off oil exports and closing shipping traffic through the Strait of Hormuz, at a moment that the world economy is highly vulnerable.

Mr. Obama has said nothing in public about the possibility since a presidential debate last October with Senator John McCain of Arizona. “If we can prevent them from importing the gasoline that they need, and the refined petroleum products, that starts changing their cost-benefit analysis,” Mr. Obama said at the time. “That starts putting the squeeze on them.”

Now, the White House will not discuss the issue at all. Denis McDonough, a deputy national security adviser, said the administration would not comment on any of its private discussions with allies. But European diplomats confirm that in recent weeks they have held private talks with administration officials about whether to move toward such a sanction if Iran ignores Mr. Obama’s deadline to begin talks by the opening of the United Nations session in mid-September.

Assessing how effective such a cutoff might be — even if Russia, China and most of Europe went along — has been complicated by the political turmoil inside Iran.

Some analysts have argued that the action could further destabilize a weakened regime; others say it could be exploited by President Mahmoud Ahmadinejad to change the subject from the still-challenged presidential election to Iran’s confrontation with the West.

“Draconian sanctions did not make sense in 2005 and 2006,” said R. Nicholas Burns, who led the Bush administration’s Iran strategy as under secretary of state for policy. “But given the new weakness and vulnerability of the Ahmadinejad government, much tougher sanctions make sense now, with one caveat,” he said in an interview. Congress, he said, must give Mr. Obama complete flexibility to threaten, impose or waive the sanctions, if he has any hope of holding together a coalition of countries.

Mr. Burns and other Iran experts testified last week at a hearing held by the Senate Banking Committee, whose chairman, Senator Christopher J. Dodd of Connecticut, declared that “our job is to arm the president with a comprehensive set of tough sanctions designed to ratchet up pressure on the Iranian regime.”

Some of the co-sponsors say the Senate bill, the Iran Refined Petroleum Sanctions Act, is a more prudent way to deal with Iran’s nuclear program than authorizing the president to use military means if necessary, as the Senate did for President George W. Bush when he was confronting Saddam Hussein.

There is similar legislation in the House, and Representative Jane Harman, a California Democrat active in intelligence and national security issues, said over the weekend that “most people think that this is how you really hurt Iran.” She predicted the bill would “breeze through” both houses of Congress.

But easy passage would not make the sanctions any easier to carry out. As the Bush administration discovered as it pushed through three mild sanctions resolutions at the United Nations, Iran has enormous leverage over companies and countries dependent on its oil production. As Mr. Burns warned, “If Americans are the only ones sanctioning, those sanctions will not succeed.”

One of the Iran experts who testified last week, Suzanne Maloney of the Brookings Institution, cautioned that Iran was so porous it could circumvent an oil cutoff, and that the potential for confrontation would be high. “The Iranians are not terribly good at capitulation,” Ms. Maloney said. “This is a regime that tends to believe the best defense is a good offense.”

The legislation would impose sanctions on any company that sold or delivered gasoline to Iran, cutting it off from selling to the United States government and seeking to freeze its financing or shipping insurance. But many experts fear that true enforcement would require patrols off the Iranian coast, and that could lead to confrontations with the Iranian Revolutionary Guards.

The White House has been extraordinarily tight-lipped about its Iran strategy, and has not publicly discussed the legislation. But already it has become part of the behind-the-scenes maneuvering with Israel. Israeli officials have argued in recent weeks that the American unwillingness to confront North Korea more forcefully as it develops a nuclear program was evidence that the United States might be willing to tolerate an Iranian nuclear weapons capability.

Mr. Obama’s aides, in return, worry that the Israelis are trying to force action too soon by shortening their estimate of how long it would take Iran to manufacture a weapon. In fact, no one knows how quickly it might be able to do so, but it has already solved many of the technological problems.

“The question we have to face,” one American diplomat said, “is whether any sanction at this point can really deter them, given how close they are now.”