With the United States now a net exporter of oil, and with Iran’s economy battling historic levels of inflation, Trump held a more favourable set of cards than his predecessors did.
The last two U.S. presidents, Barack Obama and George W. Bush, each considered killing Qassem Suleimani, the powerful commander of Iran’s Quds Force. Unlike President Donald Trump, however, they demurred from pulling the trigger.
What, then, explains Trump’s decision?
One answer may come from the dismal science: economics.
“Men,” Karl Marx wrote, “make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already.”
Yes, Trump is not Obama or Bush. And no matter your views on the wisdom of his decision, the buck for Suleimani’s killing stops with the president. But Trump at least made his choice in circumstances that favoured the operation more than when Obama or Bush was in power. To focus purely on personalities is to miss how shifts in economics upended the prospective risks and rewards facing U.S. policymakers in the months before Suleimani’s death.
Developments within the U.S. energy sector recently granted Washington armour that deflects what was once a favourite economic weapon in Tehran’s quiver of asymmetric arrows—oil price shocks. Meanwhile, in Iran, a spiraling collapse in macroeconomic conditions limited the regime’s ability to hurt American interests. Neither Bush nor Obama enjoyed circumstances like these. Nor did Trump himself, until very recently.
In September 2019, the United States became a net exporter of oil for the first time since at least the 1940s.
Suddenly, global oil price increases were now a net positive for the U.S. economy, rather than the other way around. This change in status largely negated Iran’s ability to hurt the United States with oil price shocks: For the first time in the Islamic Republic’s history, disrupting the flow of oil out of the Middle East would cause no harm to macroeconomic conditions within the United States.
U.S. President Jimmy Carter’s characterization of an energy crisis emanating from abroad as “the moral equivalent of war” underscores the extent to which ensuring the stability of oil flows once defined U.S. interests in the Middle-East. But just months ago Trump became the first modern U.S. president with the opportunity to formulate foreign policy in the Middle East without this sword of Damocles hanging over America’s economy—a development he has welcomed. Last September, after a drone attack on Saudi oil facilities attributed to Iran by U.S. officials created a record-breaking spike in the price of oil, he tweeted: “Because we have done so well with Energy over the last few years … we are a net Energy Exporter. … We don’t need Middle Eastern Oil.”
In Iran, however, the punishing impact of sanctions has bequeathed policymakers the opposite: more constraints and trade-offs than their predecessors would have faced in responding to an American attack. Unlike in the past, several potential courses of retaliatory action would now impose major costs on the regime by accelerating historic rates of inflation that have been driving deadly domestic unrest (although Suleimani’s killing seems to have briefly turned Iranians’ attention away from demonstrating against their own regime). Economic output in the Islamic Republic has also been, according to its own official data, on a downward slope: International Monetary Fund estimates indicate a contraction of 9.5 percent for 2019. And a shortage of foreign currency constrains the regime’s ability to fund activities abroad without worsening these conditions at home. More than at any point in recent years, Tehran will find it more difficult to fund a potential retaliation for Suleimani’s assassination without sacrificing other priorities.
- Foreign Policy
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