Patrick Clawson and Michael Eisenstadt of the Washington Institute for Near East Policy have produced a thought-provoking paper entitled “The Last Resort: Consequences of Preventive Military Action Against Iran.” It is worth downloading and reading in its entirety.
The study does not advocate military action against Iran’s nuclear program, since the “time is not right for such a decision, and diplomacy continues to offer at least a modest prospect of success.” But “soon – perhaps later this year, perhaps within a few years – the time for such a decision may come.”
One of the contingencies that the paper considers is that “the most effective strikes may not necessarily be against nuclear facilities.”
Iran is extraordinarily vulnerable to attacks on its oil export infrastructure. Oil revenue provides at least three-fourths of government income and at least 80 percent of export revenues. Oil export facilities are extremely vulnerable; nearly all of Iran’s oil goes through a small number of pumping stations and loading points that are along the country’s Persian Gulf coast, readily accessible for attack from sea or air.
If forced to cope without oil export revenues, Iran has sufficient foreign exchange reserves to get by for more than a year, but the political shock of losing the oil income could cause Iran to rethink its nuclear stance – in ways that attacks on its nuclear infrastructure might not.
To be sure, in a tight world oil market, attacking Iran’s oil infrastructure carries an obvious risk of causing world oil prices to soar and hurting consumers in the United States and other oil-importing countries. That result, however, need not be the case if sufficient excess capacity existed in countries ready to increase output to compensate for the loss of Iran’s exports. Moreover, if the choice is between higher oil prices and a Middle East with several nuclear powers, higher oil prices and reduced economic growth are not clearly the greater evil.
Later in the paper, Clawson and Eisenstadt note that an agreement by other oil producers to increase production could offset any loss of Iranian production:
By early 2008, other Gulf oil producers (Saudi Arabia and the UAE in particular) have returned to their traditional position of having sufficient excess capacity to make up for the withdrawal of Iran’s oil exports from the world oil market; that margin is likely to grow as world economic growth slows and oil production capacity grows under the stimulus of the high prices of recent years.”
