President Biden, like President Obama before him, is still convinced that the key to
peace in the Middle East is a nuclear deal with Iran. To get a stubborn foe like Iran to
make concessions, the United States must keep pressure strong so that the costs of
resistance are higher than can be tolerated. However, President Biden’s policies
significantly reduced pressure on Iran. The natural result has been that the Ayatollahs
lack the incentives to strike a deal with the West because they do not feel the existential
threat of sanctions.
The United States’ maximum pressure campaign under President Trump and Secretary
Pompeo significantly undermined Iran and its ability to conduct terrorism and military
destabilization around the world. According to Iranian President Rouhani, U.S.
sanctions deprived Iran of US$200 billion dollars in revenue that they would have
otherwise had. Iran would send the money gained from the termination of sanctions to
its proxies like Hezbollah, Hamas, and the Houthis, whose goals are the destabilization
of countries across the Middle East.
Had the sanctions continued after the end of the Trump Administration, or ideally been
ratcheted up further while Iran continued to advance its nuclear enrichment, we could
be dealing with a far weaker and poorer Iran today. The regime was falling into
bankruptcy. Iran was down to just $4 billion US dollars in foreign exchange reserves at
the end of 2020, according to IMF data. That shortfall led to trouble conducting trade
abroad because it did not have any money to exchange in return for importing goods.
Leaked reports from Iran’s budget office forecast that the size of the country’s debt
would skyrocket to $1.4 trillion in six years if the sanctions continue. But at the regime’s
regular debt offerings in 2020, they couldn’t even find buyers for their bond sales.
Due to Biden’s policy, Iran now can tap and draw from their estimated $40 billion in
reserves of hard currency to support foreign trade. In addition, Iran exported around $23
billion in crude oil last year – a massive increase over the $6.6 billion earned in 2020.
The Iranian Government netted the equivalent of $5 billion from the International
Monetary Fund in Special Drawing Rights back last August. It is this sort of misguided
bailout program that allows the regime to have all the money they need to buy and sell
goods around the world – and accordingly feel little need for sanctions relief.
The Biden administration had one primary goal heading into office, to re-enter the
nuclear deal with Iran. The Trump Administration had two main policy goals with respect
to Iran. The first, to negotiate a stronger deal with Iran, failed. But the second goal was
to weaken the regime, and it accomplished this beyond most expectations as the
regime was beset by simultaneous economic, political, and military crises. But Biden
has not been able to attain even his incredibly unambitious goal. The last few months
have seen no further progress in the nuclear negotiations with Iran. This is a policy
failure of immense proportions and a political defeat.
In the meantime, Iran’s nuclear program has advanced with no consequence from the
Biden Administration to either stop Iran from enriching more uranium or extracting a
pledge from Tehran to stop spreading terrorism. No American hostages have been
released. No peace has blossomed between Iran and its Arab neighbors. But Iran has
committed to assassinating top U.S. leaders and their terror proxies are on the march.
With sanctions removed or unenforced, Iran’s militias can thrive. Hamas wasted no time
in attacking Israel. Hezbollah is throwing Lebanon into chaos and ruin. Iran’s militias in
Iraq are in near-open warfare against Kurdish infrastructure in the north, targeting oil
producers and to intimidate their businessmen into subservience. In Yemen, the Houthis
have responded to U.S. overtures of lifting the FTO designation by launching dozens of
missiles into Saudi Arabia and the United Arab Emirates – killing innocent civilians.
It’s well-past time for the Biden administration to admit their policy has been a failure.
His trip to Israel and Saudi Arabia was a good change in direction, with finally publicly
committing that Iran would not get a nuclear weapon. He should build on this by re-
sanctioning the Houthis, targeting Iran’s oil exports more aggressively, and cutting off
their proxies’ finances. I hope President Biden’s Middle East policy can succeed. If he
changes course, that can be possible again.
ABOUT THE AUTHOR
Gabriel Noronha is the former Special Advisor for the Secretary's Iran Action Group at
the Department of State and a fellow at JINSA. Previously he was Special Assistant for
the U.S. Senate Armed Services Committee under Chairmen John McCain and Jim
Inhofe. He worked for Senator Kelly Ayotte from 2015-2016. He is @GLNoronha on