US demands Europeans to restrict business with Iran

Europeans

News Analysis |

US Secretary of State, Rex Tillerson, shocked the European companies by demanding that European allies should support latest US ban on Iran’s Revolutionary Guard Corps (ICRG). He made these comments in press briefings after meeting the leadership of Saudi Arabia and Iraq, and before leaving for Doha, Qatar. He asserted that any countries or companies doing business are doing at their own risk.

Earlier Rex Tillerson landed in Riyadh, on Saturday, on the first leg of his tour of Saudi Arabia, Qatar, Pakistan, India, and Switzerland. He met Saudi Foreign Minister, Adel bin Juber and later Saudi ruler, King Salman and Iraq’s president in a joint meeting of a new coordination committee.

European companies & Business in Iran

European companies had started resuming business transactions with Iran after the lifting of sanctions

Tillerson’s comments are a step forward from the earlier position of President Trump when, a week earlier, he had urged Congress to rationalize the US-Iran deal, but in questions answers with Fox News, on Oct 20, he had commented that, “Europeans can keep on making money”. He had clarified that they don’t need to worry; we don’t need them on it – implying that US will handle the situation on its own. Key European leaders had already distanced themselves with Trump’s changing position on Iran Nuclear Deal. And Trump’s comments appear to have been designed to reduce their anxieties of US actions. However now Tillerson’s comments from Saudi Arabia reflect a growing US agenda that is trying to draw European allies into the US-Iran tensions. It remains to be seen how leaders like Angela Merkel, Macron and Theresa May respond to this.

European companies had started resuming business transactions with Iran after the lifting of sanctions. Later state department officials explained that US will differentiate between Iran’s Revolutionary Guard Corps (IRCG) and other transactions. However, US steps, and changing positions of Trump administration are bound to create confusion for the European companies who see ambitious investment opportunities in Iran.

Saudi-Iraq Coordination Council

US Secretary of State attended the landmark inaugural meeting of the Saudi-Iraqi Coordination Council, an initiative of the Trump administration to resolve the political differences between Iraq and Saudi Arabia, two foremost and staunch US allies in the region and to contain the rising influence of Iran.

After this meeting with Saudi ruler, King Salman and Iraq’s President, Haider Al Abadi, Tillerson called upon Iran to withdraw its militias from Iraq.

The US aligned Iraqi government recently regained control of the oil-rich Kurdish city of Kirkuk with the help of Iran backed militias which set off alarm bells in Washington and Riyadh

After this meeting with Saudi ruler, King Salman and Iraq’s President, Haider Al Abadi, Tillerson called upon Iran to withdraw its militias from Iraq. While talking to media, he asserted that now since ISIS has been defeated, these Irani militias should leave Iraq and let the democratic government work. This was an interesting position, given that the strained relations between Iraq and Saudi Arabia have been further exacerbated due to Iran’s increasing influence in Iraq. The US aligned Iraqi government recently regained control of the oil-rich Kurdish city of Kirkuk with the help of Iran backed militias which set off alarm bells in Washington and Riyadh. Kurdish regional government is a US ally, and so is Iraqi regime of President, Haider Al Abadi, but Iraq was actively helped by the Iranian militias against the Kurdish government.

Tillerson’s comments from Saudi Arabia reflect a growing US agenda that is trying to draw European allies into the US-Iran tensions. It remains to be seen how leaders like Angela Merkel, Macron and Theresa May respond to this. 

Iran backed militias previously helped turn the tide of the Syrian civil war in Bashar Al-Assad’s favor and are seen as an important strategic partner of the Assad regime. The militias coupled with Russian airstrikes helped Assad re-establish and consolidate his hold over Syria.

Tillerson later left for Doha, Qatar. United States is trying to deescalate hostilities between Qatar and four GCC countries lead by Saudi Arabia.

Coordination between Iran backed militias and the US aligned Iraqi government is thus a great cause of concern for the US as it has caused a falling out between the key US Arab allies and has bolstered Iran’s influence in the region. By establishing the Saudi-Iraqi Coordination Council, the US is attempting to resolve differences and improve relations between its key allies in the region – but this challenge does not end with Iraq-Saudi relations.

Tillerson later left for Doha, Qatar. The United States is facing a different challenge there; its trying to de-escalate hostilities between Qatar and four GCC countries lead by Saudi Arabia. UAE, Bahrain, and Egypt along with Saudi Arabia had cut off diplomatic ties with Qatar and imposed air, land and sea blockade of their tiny neighbor in June. These countries also demand that Qatar should end broadcasts of Al Jazeera, Arabic as these broadcasts are considered hostile to the lawful governments of GCC countries. Despite earlier US diplomacy with the help of Kuwait, the situation is at a standstill, after five months.

Most western countries and US media consider GCC demands to be unreasonable and they see tiny Qatar as a victim of Saudi aggressive designs. Kingdom had however pledged investments of around $300 billion into the US industry and roads when Trump attend the Muslim countries summit there. Normalizing relations between its GCC allies is a US strategic need against Iran. However, Tillerson while talking to reporters did not show much hope for an earlier resolution of this conflict.

Despite new assertive US posture against Iran, ground realities in the region -or across the Mediterranean – do not look very conducive.

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