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Chaos in the Island of Stability

US President Jimmy Carter once described Iran as “an island of stability in a turbulent corner of the world.” Today, Iran is vowing revenge and retaliation after a U.S. air strike in Baghdad on 3rd January, 2020 killed Qassem Soleimani, Tehran’s most prominent military commander and the head of the Quds Force (the overseas branch of Iran’s Islamic Revolutionary Guard Corps, the IRGC). A closer look at the history of these two nations’ relations with one another becomes imperative to understand why they find themselves at the impasse that they do today.

The US and Iran were not old allies, but the US had played a crucial—and until 1953, constructive—role in the birth of modern Iran, from sending missionaries to establishing hospitals and schools around the country, to advocating on behalf of Iran, (then occupied by the Allied powers) during the Paris Peace Talks after the First World War, and again after the Second. However, this propitious start to the relationship is often forgotten, thanks to the U.S. role in the 1953 coup that ousted Iran’s nationalist prime minister and marked the beginning of the rule of Shah Mohammad Reza. After an initial phase of multifaceted reforms and rapid economic success under the Shah (and backed by American support), Iran’s aggressive modernization culminated in all the predictable consequences of hyper-growth: rising inflation, corruption, income inequality, inadequate public services and cultural frictions. The launch of the Shah’s reform agenda met with fierce opposition among influential constituencies in the clergy, the merchant class, and major landholders, and in 1963, Ayatollah Ruhollah Khomeini emerged as the most powerful voice of opposition. In 1979, revolution swept through Iran as mass-scale protests forced the U.S.-backed Shah to flee Iran, leading to Ayatollah Khomeini’s return from exile to become the Supreme Religious Leader. Since the British withdrawal from the Persian Gulf in 1971, Iran had been a reliable American ally, and the U.S’s investment hub in the Middle-East. However, the 1979 revolution saw it turn into a seething anti-American regime, and when the U.S embassy in Tehran was overrun by student protestors in November 1979, their seizure of the embassy staff launched a hostage crisis that became a 444-day national ordeal that led to suspension of diplomatic relations between the U.S and Iran, and irrevocably altered the way that Americans engage with the Middle East.

The next major conflict between the two nations took place during the Iran-Iraq War from 1980-1988. During this war, which eventually ended in a ceasefire and Iraqi victory (with American assistance), both Iran and Iraq engaged in sporadic air and missile attacks against each other’s cities and military and oil installations. They also attacked each other’s oil-tanker shipping in the Persian Gulf, and Iran’s attacks on Kuwait’s and other Gulf states’ tankers prompted the U.S and several western European nations to station warships in the Persian Gulf to ensure the flow of oil to the rest of the world. In 1984, the U.S. listed Iran as a state sponsor of terrorism, and in 1988 hostilities reached a peak when U.S. warship Vincennes shot down an Iranian passenger plane after mistaking it for a weapons carrier, killing all 290 passengers aboard.

The nuclear proliferation problem we see today can be considered an explicit function of the Iran-Iraq War, which revived Iranian nuclear aspirations, although Iran had been pursuing a nuclear program since at least 1957. In 1968, Iran had signed the Nuclear Non-Proliferation Treaty which permits it to have a civil nuclear program in return for a commitment not to acquire nuclear weapons. However, it pursued nuclear agreements with China and Russia throughout the 1990s to support its on-going research into the development of nuclear weapons. Under growing scrutiny and international pressure, in 2003-04 Iran agreed to terminate its nuclear weapons program, insisting only that it maintain its nuclear centrifuges for nuclear energy. However, the International Atomic Energy Agency (IAEA) discovered and exposed that Iran had continued to pursue nuclear weapons later in 2003. By 2002 itself, U.S. officials had been accusing Tehran of operating a secret nuclear weapons program, and successive Presidents Bush and Obama had offered to engage in multilateral talks if Iran would suspend nuclear enrichment. In order to encourage Iran to cease uranium enrichment and come to the negotiating table, the UN Security Council imposed economic sanctions on Iran in 2006, which resulted in 20% domestic unemployment and a severe contraction of Iran’s gross domestic product. Once it was discovered that Iran was building a secret uranium-enrichment site at Fordow, the US started to sanction foreign banks if they failed to significantly reduce their imports of Iranian oil. Iranian oil sales then dropped, sparking an economic downturn that led to U.S. and Iranian officials having secret talks on the nuclear issue, which intensified in 2013 after Hassan Rouhani was elected Iran’s president on the platform of improving Iran’s economy and its relations with the world.

Over the next two years, the U.S. convened several rounds of bilateral talks and led the P5+1 in various negotiations with Iran, which resulted in official agreement on the JCPOA in 2015, with it being formalised once the UN Security Council approved resolution 2231. The JCPOA required Iran to reduce its stockpile of enriched uranium by 98% for fifteen years, cut the number of operating centrifuges by two-thirds for ten years, and provide International Atomic Energy Agency (IAEA) inspectors access to enrichment facilities within twenty-four days if the IAEA suspects violations. Moreover, if the IAEA confirms violations, the JCPOA allows for the immediate reinstatement of sanctions. In exchange for these measures, Iran would receive sanctions relief totalling nearly $100 billion. However, it was not smooth sailing henceforth, and soon enough, the U.S. was accusing Iran of violating the terms of the JCPOA. This, combined with President Trump’s dissatisfaction at the non-permanent nature of the restrictions on Iran’s nuclear activity, as seen through ‘sunset clauses’ within the agreements, led to the U.S.’s eventual withdrawal from the nuclear deal in May, and a re-imposition (snapback) of crippling economic sanctions on Iran. The two nations appeared to be in a deadlock, where Iran insisted it had not violated the deal, and the U.S. insisted that it had, and relations have worsened ever since, characterised by obstinate posturing and retaliations.

In April 2019, the U.S. designated the Islamic Revolutionary Guard Corps a “terrorist organization” , and in May, Iran announced that it would begin violating the terms of the accord by increasing enriched uranium production. The Rouhani administration set a 60-day rolling ultimatum for the agreement’s remaining parties (France, Germany, the UK, Russia and China) to deliver the deals expected economic dividends in the face of unilateral U.S. sanctions. It followed through on 7 July with a breach of the JCPOA’s quantitative cap of 300kg on low-enriched uranium and pushed past the quantitative limit of 3.67 per cent enrichment levels. Then, on 6 September, Iran started lifting limitations on nuclear research and development, including the activation of advanced centrifuges. These individual steps had been carefully calibrated to add urgency to diplomatic efforts without sparking an immediate non-proliferation emergency, with Tehran stressing at each stage that its measures were rescindable if the JCPOA’s core bargain – nuclear limits for economic normalisation – were fulfilled.

For Iran, the U.S. snapback of pre-JCPOA sanctions have had dire consequences. Within a year, the national currency, the Rial, lost 70% of its value compared to the dollar , and inflation went close to 40%. The U.S. has further pressured other nations around the world to comply with its policy, too. Dozens of European companies have abandoned operations in Iran that they had started after the signing of the nuclear agreement, leaving thousands of Iranians jobless. Re-imposed banking sanctions have sharply curtailed foreign investment and access to international credit, and oil sanctions have more than halved Iran’s crude exports, its main source of income. Yet, however harsh USA’s policy may seem, Trump is not the first President to attempt to thus strangulate the Iranian economy. In the 1990s, Washington sought to expand international adherence to an embargo levied by it upon Iran via diplomatic pressure, most notably through the 1996 Iran-Libya Sanctions Act (ILSA), which threatened secondary sanctions against investors in Iran’s energy sector . However, then more than now, cooperation from Europe and Iran’s other trading partners proved elusive, thus somewhat undermining the U.S. effort to economically isolate Iran.

The rest of 2019 has been marked by steadily increasing tensions, as charges have been thrown back and forth. In June, the U.S. accused Iran of attacking oil tankers in the Gulf, which it denied, after which Iran shot down a U.S. drone which was allegedly in Iranian airspace. In response, President Trump approved—and quickly cancelled—a retaliatory strike, instead ordering a cyber-attack on the IRGC and Iran’s missile systems and imposing new sanctions on Iranian Supreme Leader Ali Khamenei and top Iranian military commanders, while raising concerns from Congressional leadership that President Trump would approve a war with Iran by citing the 2001 Authorization for Use of Military Force, which grants the president authority to target al-Qaeda and countries supporting the group. In July, Iran seized a British oil tanker, and exceeded the JCPOA’s cap on uranium stockpiles.

A September attack on the Aramco facility at Abqaiq in Saudi Arabia, which impacted over 5% of global oil supply , was attributed by the U.S. to Iran, but while U.S. leaders want to build a broad coalition, including Asian and European countries, to counter the Iranian military threat, and help monitor shipping in the Persian Gulf region, NATO allies have expressed reluctance to get involved in any military effort to help secure the region or counter Iran, laying more emphasis on minimizing the chances of war.

In December, attacks on U.S. military bases in Iraq killed a U.S. citizen, leading to an American response through firing on Iran’s bases. Iranian-backed militias further protested outside the U.S. Embassy in Baghdad and stormed the security post in a series of events that culminated in the US strikes that killed General Qassem Soleimani. As both sides have issued further threats and responses, it also becomes important to note possible implications of the U.S.’s decision, and the courses of action that Iran may choose to follow.


After the U.S. invasion of Iraq in 2003, Iran has carefully cultivated a network of state and non-state regional allies in Iraq, Lebanon, Syria, and Yemen. It has also built up an arsenal of thousands of missiles, including cruise and ballistic missiles, capable of doing severe damage to oil facilities across the Persian Gulf. In Iraq, Iran has successfully capitalised on its religious and cultural ties to become a dominant force in the country. The IRGC is intertwined with the Iraqi security apparatus, particularly through the array of militia and paramilitary forces such as the Popular Mobilisation Units (PMU) that arose in the fight against the Islamic State group (ISIS). In Lebanon, Iran’s close ally Hezbollah dominates both the political and military spheres, effectively holding veto power over state decision-making. In Syria, meanwhile, the popular uprising against Bashar al-Assad led the Iranians to increase their support for the regime. The IRGC and Iranian-backed ground forces have been instrumental in ensuring Assad’s survival and effective victory. As the Syrian conflict continued, the Saudi military engagement in Yemen, which began in 2015, created a new opening for Iran to extend its regional influence, which it did through increased assistance for Houthi fighters, allegedly through transfers of ballistic missile technology and other military aid.

The fact that Iran now has such an extensive and geographically dispersed network of alliances gives it ample scope to conduct deniable operations at arms’ length, should it choose to. Should the U.S. and Iran engage in military conflict, Iran could attempt to block the Strait of Hormuz (through which 30% of the world’s oil flows), which would raise oil prices globally. It could also aim to attack oil producing facilities. While some U.S. missile defence systems, such as the Patriot system, can theoretically defend a specific base or facility, and others, like the Terminal High Altitude Air Defense (THAAD) system, can protect a broad area, Iran can still attack regional oil installations from multiple fronts using a variety of weapons, including drones and cyber-attacks. During the Iran-Iraq war, both countries saw their oil industries decimated, and Iraq’s invasion of Kuwait in 1990 resulted in the immediate loss of millions of barrels per day of oil. A prolonged regional war with Iran could potentially see damage of more than ten million barrels per day, which could take years to repair. Tehran could, in theory, try to coax Washington to withdraw troops from a certain area or cut military aid to a particular country, as Saudi Arabia attempted to do in 1973. A U.S.-Iran confrontation could also trigger an escalation of proxy warfare in countries like Syria and Yemen, or an increase in Iranian missile strikes targeting the seventy thousand U.S. troops in the Middle East.

Washington’s concerns about Iran focus on three areas: support for terrorism; violent opposition to the Middle East peace process; and development of nuclear weapons of mass destruction. Iran’s position is also well-established: its government has consistently rejected direct diplomatic contacts with Washington while sanctions remain in place, and it vigorously disputes the U.S. military presence in the Gulf. However, as each demands that the other back down first, hostilities continue to escalate as both sides express divergent demands that effectively negate one another. Iran has now announced that it will abandon all provisions of the JCPOA. As dramatic threats continue to ensue from both nations, what lies ahead remains to be seen.

By Latika Dutta,
1st Undergraduate Student, SRCC

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