Sanctions Are Hurting Iran’s Regime, but Not Enough

Benjamin Weinthal

Berlin — The Islamic Republic of Iran’s economy is in disarray. On Sunday, gas prices surged 400 percent — an increase termed “a great victory for Iran” by President Mahmoud Ahmadinejad, clumsily trying to find a P.R. escape hatch from his regime’s economic mismanagement of Iran’s energy sector. Meanwhile, riot police have been dispatched to gas stations to suppress possible protests, like those that followed the introduction of gas rationing in 2007. Ordinary Iranians are all too aware that the mullah regime is to blame for the mushrooming cost of a gallon of gasoline (from 38 cents to roughly a $1.44) and for the country’s growing isolation. The international community’s economic sanctions, particularly U.S. energy penalties, have contributed to profound cracks in the regime’s hold on Iran and raised the business costs of maintaining its dilapidated refinery sector. All of this means that sanctions are taking a considerable toll on Iran’s fragile infrastructure.

But more comprehensive pressure is needed to stop Iran’s illicit nuclear-weapons program and improve its human-rights situation. The incoming chairwoman of the House Foreign Affairs Committee, Florida Republican Ileana Ros-Lehtinen, is on the right track: She plans to introduce enhanced sanctions legislation. There is also the bipartisan bill introduced by Sens. Scott Brown (R., Mass.) and Bob Casey (D., Pa.), which would “sanction entities that pay in advance for oil deliveries or sign long-term contracts to purchase oil and gas from Iran.”

One of the keys to new sanctions legislation will be to target European gas companies that continue to purchase Iranian crude oil and gas. For example, the Swiss state-owned energy company EGL has refused to terminate its massive €18-22 billion gas acquisition deal. In December, the Austrian Chamber of Commerce held an economic seminar in Vienna on how to “intensify” business with Iran. According to Dr. Diana Gregor, a political analyst and researcher with Réalité EU, an organization that tracks European- Iranian trade, “There are roughly 680 Austrian companies that have business relations with Iranian firms or the Iranian state. Some 35 Austrian firms have local branches in Iran and another 500 companies occasionally conduct business with Islamic Republic.”

Plainly said, if Europe wants to exhaust non-military ways to stop Iran’s jingoism and wretched human-rights record, it has to end its addiction to Iranian gas and its delivery of high-tech equipment to the mullah regime.

— Benjamin Weinthal is a fellow at the Foundation for Defense of Democracies.