Paul Pillar on Iran

by Reihan Salam

Though I consider myself somewhat more hawkish than dovish on the question of Iran’s nuclear program, Paul Pillar’s latest in the Washington Monthly raises a number of important issues, among them the potential economic impact of an attack on Iran:

Contrary to a common misconception, the Persian Gulf Arabs do not want a U.S. war with Iran, notwithstanding their own concerns about their neighbor to the north. The misconception stems mainly from misinterpretation of a Saudi comment in a leaked cable about “cutting off the head of the snake.” Saudi and other Gulf Arab officials have repeatedly indicated that while they look to U.S. leadership in containing Iranian influence, they do not favor an armed attack. The former Saudi intelligence chief and ambassador to the United States, Prince Turki Al Faisal, recently stated, “It is very clear that a military strike against Iran will be catastrophic in its consequences, not just on us but the world in general.”

Then there are the economic consequences that would stem from a U.S.-Iranian war, which are incalculable but likely to be immense. Given how oil markets and shipping insurance work, the impact on oil prices of any armed conflict in the vicinity of the Persian Gulf would be out of proportion to the amount of oil shipments directly interdicted, even if the U.S. Navy largely succeeded in keeping the Strait of Hormuz open. And given the current fragility of Western economies, the full economic cost of a war would likewise be out of proportion to the direct effect on energy prices, a sudden rise in which might push the U.S. economy back into recession.

My sense is that the Persian Gulf states would like the U.S. to do whatever is necessary to contain the Iranian threat — and then to blame the U.S. for the fallout if the costs of an armed intervention spiral out of control, thus insulating themselves against domestic political pressure.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.