Tehran Seizes up over New US Sanctions. Over to Obama for More Initiatives

Tehran has been thrown off balance, its decision-making processes stalled in the past month by a hail of unforeseen body blows – proving that religious dictatorships are just as vulnerable as others of their ilk when faced with rare challenges to their will.
DEBKA-Net-Weekly singles out the five blows which rocked Iran's leaders:

1. On June 9, Iran's supreme self-confidence faltered when China and Russia, instead of casting vetoes, voted with the UN Security Council majority in favor of sanctions for its nuclear program, leaving only two supporters, Turkey and Brazil, to oppose the motion and Lebanon abstaining. Many years of wary diplomatic finagling in Moscow and Beijing were wiped out at one stroke, forcing Tehran to look for the first time at the real prospect of international isolation.
The next shocker came when UN sanctions proved to be but Step One in an incremental process. European Union members quickly pitched in with their own penalties. US President Barack Obama followed on July 2 by signing the most painful package of all, a ban on refined oil deliveries to the Islamic Republic, including gasoline and jet fuel, for its "refusal to comply with its international obligations."
Iran's rulers' high-sounding rhetoric was suddenly revealed as hollow. Their mocking ranting about the ineffectiveness of the sanctions and the inability of superpowers to issue diktats to other countries any longer faded, as did their pretensions to rule the roost in the Persian Gulf and Middle East by dint of their political and military prowess.
The ordinary Iranian began to sense that the international penalties imposed for his government's nuclear aspirations would fall squarely on his back amid his country's growing isolation.

Iran's lead-role challenged by Turkey

2. Iran's reliance on Turkish support for its nuclear plans turned out to carry a heavy price in the form of a powerful claimant for top spot in the nascent Northern Islamic Bloc (Iran, Turkey, Syria, Hizballah and Hamas). Turkish Prime minister Tayyip Recep Erdogan was riding high, topping the waves with the help of a sea expedition to bust Israel's naval blockade of the Gaza Strip. The international condemnation of the Israel commando raid to halt the effort played right into his hands. Suddenly, Erdogan was the mouthpiece for the radical Islamic cause, pushing President Mahmoud Ahmadinejad and Supreme Ruler Ayatollah Ali Khamenei off the world's headlines.
Iran was pushed back further after it failed to make good on its threats and dispatch its own flotilla to Gaza – seen to take fright not only from the US military buildup around it but even from Israel's threat to treat all vessels bound for Gaza as enemy ships.
Tehran's obedient Lebanese proxy, Hizballah, failed likewise to launch its promised flotilla to the Gaza Strip, further underlining Tehran's impotency as proactive player when the curtain went up.

Tehran's impotence exploited by Washington

3. Taking note of Iran's loss of nerve, the Obama administration decided to strike.
On the one hand, the White House ordered a further buildup of American naval, air and Marines forces around Iran (See the opening item in last week's DEBKA-Net-Weekly 450, from July 2: Iran Fears Attack from Four Directions, including Caucasus and Central Asia).
And on the other, on July 2, the US president signed into law a tough congressional sanctions bill left hanging fire for months – with immediate effect.
DEBKA-Net-Weekly's sources in Washington disclose that the president was persuaded to go forward chiefly by CIA chief Leon Panetta, who assured him that Iran's leaders were too divided and off-balance for a coherent reprisal.
Until then, Obama had heeded the threats from Iranian Defense Minister Ahmad Vahidi, Iranian Parliament Speaker Ali Larijani and Commander of the Iranian Revolutionary Guards Naval Forces General Ali Fadavi, that American searches of Iranian ships and aircraft to enforce the new sanctions would bring forth severe military reprisals against foreign vessels, including American warships and oil tankers, in the Persian Gulf and the Straits of Hormuz.
A crisis of this order could send world oil prices skyrocketing.
However, Panetta was sure that Iran's rulers were in no condition for radical decisions on that order. At worst, they might wield a small stick but would not go so far as to jeopardize the Gulf's oil shipping lanes.
He relied in his evaluation on Tehran's meekness, aside from verbal threats, in the face of UN Security Council sanctions of June 9.
The ayatollahs shook their fists at parties playing ball with the Americans in the Persian Gulf, reserving most of their ire for the United Arab Emirates for freezing the bank accounts of local firms connected to the Iranian Revolutionary Guards Corps administration. But that was as far as they went – except for a petty outbreak of spleen in South Lebanon. There, local Shiites were told by Hizballah to punish Paris for its UN vote by harassing the French contingent of UNIFIL with roadblocks, stone-throwing at the troops and street demonstrations. Other than that, Panetta saw no signs of Iran preparing reprisals in Iraq or Afghanistan.

Confusion in Tehran over ban on refined oil products

4. The US sanctions package sent Iran's rulers into long conferences from Saturday, July 3, on ways and means of responding to the new bans which threatened to take the cars off Iranian roads and ground its airliners. By the time this issue closed, no real action appeared to be in the making.
On Monday, July 5, Mehdi Aliyari, secretary of the Iranian Airlines Union, was quoted by the ISNA agency as saying: "Since last week, after the passing of the unilateral law by America and the sanctions against Iran, airports in England, Germany and the UAE have refused to give fuel to Iranian planes."
In Iran, such announcements – certainly their publication by official media outlets – are subject to advance clearance at the highest level of authority, including the president.
Yet, 24 hours later, the Iranian foreign ministry spokesman Ramin Mehmanparast contradicted his colleague, denying some countries had refused to fuel Iranian planes because of sanctions. "No such limitation was imposed," he said.
The denial referred to "some countries" rather than "some companies."
The sense of confusion was compounded by a UAE denial that Iranian planes had been refused fuel at Dubai international airport and British and German officials avoiding comment, saying only that any move to withhold fuel would be down to individual fuel companies.
According to DEBKA-Net-Weekly's sources, some of the muddle was down to the fact that the refusal to refuel Iranian passengers planes at some European airports and Dubai came from firms in partnership with or subsidiaries of the American-British oil giant BP PLC-BP. Head office had told them to stop refueling Iranian airliners in keeping with the new energy sanctions signed by the US president.
The Iranian authorities issued conflicting statements to buy time for their response, so presenting the appearance of confusion.

The UAE defection takes the wind out of Iran's commercial sails

5. By joining the US in enforcing UN, European and American sanctions against Iran, UAE ruler Khalifa bin Zayed Al Nahyan has given the chop to Tehran's most vital lifeline to the outside world.
This is no exaggeration.
Tehran has made the Persian Gulf emirate its regional trading hub, using Dubai's international airport as its gateway to the world. No Iranian passenger flight, aside from those bound for Turkey and Syria, continues to its destination without first stopping over in Dubai. And no Iranian flight incoming from Europe lands in Tehran without first touching down in Dubai.
Dubai is Iran's main import and export port.
Thousands of Iranian companies and businesses operate out of Dubai, many employed in the Islamic Republic's multibillion-dollar re-export transactions across the Gulf. It is there, in this bustling business community, that the Revolutionary Guards have planted a network of straw companies designed to bypass sanctions.
However, the tiny UAE appears to have bowed to US and Saudi pressure and is beginning to ease out of its role as Iran's senior trading, financial and transport hub. This brings home to Iran's rulers how far they blundered in holding back from instant action for the punishment raining down on them. In one short week, Tehran has gone from Gulf superpower to an entity which even little UAE is not scared to defy.
That is a bitter pill for Iran's arrogant leaders to swallow and they are unlikely to take it lying down.
Wednesday, July 7, Tehran began to pull itself together and warned the UAE that their trade ties would to be cut down.

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