When Reuters journalists revealed last week that Iran has been funneling weapons to Yemen’s Houthi rebellion through Oman, they also highlighted the contradictions that sit at the heart of America’s current approach to Tehran. Iran arming and training the Houthis is news to no one; instead, the significance of these revelations lies in the fact that U.S. forces launched direct missile strikes against those same Houthi fighters in Yemen just days prior.
With the U.S. military now directly engaged in combat with Iranian-supplied Shi’a fighters, the two sides find themselves in the same tense position they occupied before the American withdrawal from Iraq. Through 2011, Iran used Iraqi militia proxies to attack U.S. personnel and derail a basing agreement between Washington and Baghdad. While it should hardly be surprising to see the U.S. and Iran on opposite sides, the dynamics between the two countries are supposedly entirely different now than five years ago.
Since Obama and Rouhani negotiated their nuclear deal and the American president made Iran a cornerstone of his foreign policy legacy, more than a few commentators have pointed out the ironies of America’s Middle Eastern balancing act. Washington and Tehran are fighting a common enemy in Iraq, with the same Iranian-backed militias that once killed Americans working with American air support to dislodge Daesh from Mosul. At the same time, Free Syrian Army forces backed by the U.S. continue to hold out against the Syrian government and its Iranian allies in Aleppo. Yemen, where the Americans have been providing intelligence and logistical support to the Saudi-led coalition, deepens the convoluted reality of the two sides fighting with and against each other at the same time.
Despite their grudging cooperation, ties are far from warm. Iranian hardliners still peddle conspiracy theories about how the Americans created Daesh and use the nuclear deal to "infiltrate" Iran, while the judiciary has thrown many Iranian dual nationals in prison—perhaps in retaliation for their role in improving relations. Congressional Republicans remain deeply skeptical of the nuclear agreement and seek to renew other sanctions. After the Obama administration arranged a January prisoner swap with Iran and released funds from a separate deal as leverage, Republicans decried the move as "ransom."
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To the extent that relations between the U.S. and Iran have improved, ties between Washington and its GCC allies have become increasingly strained. The Gulf emirs feel threatened; the perceived rapprochement, combined with Obama's reluctance to intervene in Syria and his abandonment of Hosni Mubarak in 2011, has led them to question Washington's commitments. The Saudi coalition's intervention in Yemen stems from this feeling of abandonment. Feeling they can no longer necessarily count on the Obama administration as a guarantor, Saudi Arabia and its neighbors have taken a more proactive approach to countering what they see as Iran’s re-ordering of the regional balance of power. By trying to disentangle the United States, Obama has thus further stoked the Saudi-Iranian cold war.
In addition to their bitter proxy conflicts, the Saudi-Iranian rivalry extends beyond the military sphere and into the global markets. With the oil crash hitting both economies, Iran and Saudi Arabia have turned to wooing current and future outside partners to address their overreliance on energy exports while begrudgingly agreeing to cooperate to shore up cratering crude prices. As Iran re-enters the energy supply chain, major export destinations like Japan have become battlefields in their own right.
Regardless of their mixed feelings toward the current White House, the Saudis have been wooing the public and private sectors in the United States and pitching themselves as an investment destination to longstanding partners in both the West and the East. Saudi Arabia’s Mohammad bin Salman traveled to the G20 summit in September to pitch his economic reform program to the likes of Theresa May and Shinzo Abe, while his economic planners set off for London and several U.S. cities in October to promote their new government bonds among British and American bankers. Since the Brexit vote took place in the United Kingdom, there is even talk of a free trade agreement between Britain and the GCC.
Meanwhile, Rouhani’s efforts to lure foreign companies back to Iran continue apace. He visited Europe in January and signed contracts worth billions in Italy and France, and European officials now regularly visit Tehran in pursuit of expanded economic cooperation. The European Union sees post-sanctions Iran as a prime opportunity to reclaim market share while American competitors remain wary of violating remaining U.S. restrictions. Despite high expectations, reinvestment has been slow to arrive. While the international nuclear-related sanctions have been lifted, the U.S. government still maintains its own restrictions (banking restrictions in particular) which scare off banks that might otherwise be willing to finance new projects. As the Saudis try to convince foreign capital that theirs is the most promising Gulf market, these lingering obstacles provide a built-in advantage.
In the battle of public opinion, at least, Iran enjoys the upper hand. As Saudi Arabia faces criticism over its actions in Yemen, some question whether Iran would make a more reliable partner; segments of American and European public opinion seem willing to ignore Iran’s direct role in Syrian government atrocities. After decades at odds, the moderate tone sounded by Rouhani and foreign minister Javad Zarif has convinced many that Iran is ready to become a reliable new partner. They have managed this even as Supreme Leader Ali Khamenei and his generals pursue their regional sectarian wars unabated. Rouhani and Zarif might have momentarily recrafted their country’s image, but they do not control Iran’s military adventures in Syria and Yemen.
The Omani connection to Yemen’s war serves as just the latest reminder that Iran and America, despite recent milestones, are still at odds. For now, the fight against Daesh has brought the two unlikely partners together, but that common ground will only last for as long as the jihadists remain in northern Iraq. Without it, the proxy conflicts elsewhere in the Middle East will oppose the two sides just as bitterly as the occupation in Iraq did, and without Obama (and possibly Rouhani) in office, the forces lined up against rapprochement in both Washington and Tehran will surely have their say. Obama might trumpet his nuclear accord now, but only time will tell if his attempt to “reset” America’s Iran policy will survive his presidency.