Ron Paul: Why Trump's Iran Isolation Plan May Backfire

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

In May, President Trump pulled the United States out of the Iran nuclear deal despite Iran living up to its obligations and the deal working as planned. While the US kept in place most sanctions against Tehran, China and Russia - along with many European countries - had begun reaping the benefits of trade with an Iran eager to do business with the world.

Now, President Trump is threatening sanctions against any country that continues to do business with Iran. But will his attempt to restore the status quo before the Iran deal really work?

Even if the Europeans cave in to US demands, the world has changed a great deal since the pre-Iran deal era.

President Trump is finding that his threats and heated rhetoric do not always have the effect he wishes. As his Administration warns countries to stop buying Iranian oil by November or risk punishment by the United States, a nervous international oil market is pushing prices ever higher, threatening the economic prosperity he claims credit for. President Trump’s response has been to demand that OPEC boost its oil production by two million barrels per day to calm markets and bring prices down.

Perhaps no one told him that Iran was a founding member of OPEC?

When President Trump Tweeted last week that Saudi Arabia agreed to begin pumping additional oil to make up for the removal of Iran from the international markets, the Saudis very quickly corrected him, saying that while they could increase capacity if needed, no promise to do so had been made.

The truth is, if the rest of the world followed Trump’s demands and returned to sanctions and boycotting Iranian oil, some 2.7 million barrels per day currently supplied by Iran would be very difficult to make up elsewhere. Venezuela, which has enormous reserves but is also suffering under, among other problems, crippling US sanctions, is shrinking out of the world oil market.

Iraq has not recovered its oil production capacity since its “liberation” by the US in 2003 and the al-Qaeda and ISIS insurgencies that followed it.

Last week, Bloomberg reported that “a complete shutdown of Iranian sales could push oil prices above $120 a barrel if Saudi Arabia can’t keep up.” Would that crash the US economy? Perhaps. Is Trump willing to risk it?

President Trump’s demand last week that OPEC “reduce prices now” or US military protection of OPEC countries may not continue almost sounded desperate. But if anything, Trump’s bluntness is refreshing: if, as he suggests, the purpose of the US military – with a yearly total budget of a trillion dollars - is to protect OPEC members in exchange for “cheap oil,” how cheap is that oil?

At the end, China, Russia, and others are not only unlikely to follow Trump’s demands that Iran again be isolated: they in fact stand to benefit from Trump’s bellicosity toward Iran. One Chinese refiner has just announced that it would cancel orders of US crude and instead turn to Iran for supplies. How many others might follow and what might it mean?

Ironically, President Trump’s “get tough” approach to Iran may end up benefitting Washington’s named adversaries Russia and China - perhaps even Iran.

The wisest approach is unfortunately the least likely at this point: back off from regime change, back off from war-footing, back off from sanctions. Trump may eventually find that the cost of ignoring this advice may be higher than he imagined.

Comments

wetwipe GunnyG Tue, 07/10/2018 - 13:21 Permalink

Here's the fucking difference.

 

Saudi royal family = Crypto-jew.

Iranian government = Anti-rothschild central bank debt based slavery.

 

Saudi get a bye to do what ever they fucking want, whilst Iran has to live the life of a saint of else get blown up my America, BTW when I say live the life of a saint I mean do what (((they))) tell you to do or else.

 

We live in truly hellish times.... Thank god for my support group on FaceBook.

In reply to by GunnyG

MoreFreedom divingengineer Wed, 07/11/2018 - 07:56 Permalink

Actually Obama was talking to Russian President Dmitry Medvedev, and referring to the 2012 elections.  I think he promised to be more flexible because Putin's hackers got Hillary's emails including the 20 with Obama suspiciously using an alias.  And Obama/Clinton was very appeasing and flexible with Russia.  Iran of course, is an ally of Russia, which explains the Iranian deal and is an example of that flexibility.  

In reply to by divingengineer

yvhmer Tue, 07/10/2018 - 13:14 Permalink

Indeed .... In a world completely fu-ed by several interest the previous 20 years.... Which way forward would best, not only undo these 20 years of idiocy, but perhaps brings chances of recuperation closer? 

These are times with different interest. And one thing is sure... I respect Ron Paul tremendously . I still remember his speech on the House floor that flipped on the switch .....

But I also noticed that looking at an issue from only one angle, gives you the wrong idea. 

It remains to be seen whether and how it backfires.  And remember, there are competing state interests. Sometimes they do align, sometimes they do not. What is wrong with working with what you have?

 

Farqued Up yvhmer Tue, 07/10/2018 - 13:37 Permalink

I'm a big Ron and Rand fan but neither could do what Trump can do if he doesn't weaken in resolve. Ron will theorize it to death and get little done except slowly educate the ignorant. That has tremendous long term value but we do not have the time for the intellectual snail to overtake the swamp critters. It may take force backed by the Pentagon to jail and prevail.

In reply to by yvhmer

GunnyG Tue, 07/10/2018 - 13:14 Permalink

Deep Snorkler & LordWillingly are birds of a feather
Who like to roll around in the heather
They give each other head
Swear to do it until they're dead,
While wearing teddy's made of leather

 

 

 

 

GunnyG Tue, 07/10/2018 - 13:15 Permalink

Ron Paul the fence-sitter. Always voted NO on a bill that was going to pass regardless, thus bringing home the bacon while decrying it. Phony shitstain.

BigJim GunnyG Tue, 07/10/2018 - 14:15 Permalink

What, so he should have voted for a bill he disagreed with?

He's one man in 535. What else can he do?

You're the shitstain... and, with your reflexive accusations of homosexuality at anyone who disagrees with you, almost certainly a latent homosexual yourself.

Newsflash: it's 2018. It's recognised by anyone with an appreciation of liberty that consenting adults can do what they like.

In reply to by GunnyG

ShrNfr Tue, 07/10/2018 - 13:18 Permalink

Of course, Iran hangs teen age girls after raping them to make sure they are not virgins. It is second after China in the number of total capital punishment sentences executed so to speak. The KSA is amateur hour compared to them. I am not thrilled with either though.

divingengineer TheMexican Tue, 07/10/2018 - 13:25 Permalink

Might be a good time for everyone to get it through their thick skulls; it might have some impact on your life or pocketbook to get some of these longstanding structural problems squared away.

Might cost you another dollar a gallon for gas to remove a couple repressive regimes.

Might cost you more for your next TV to even the playing field with trade cheaters.

Might cost more for food in the future if the trade war is waged on that front, or the surplus might make it cheaper here. 

Who ever said righting the ship would be free and easy? It took us 40 years to get the country this screwed up, it will take a while to sort it out. They only good thing is that we finally have a president that is willing to try. 

In reply to by TheMexican

TheMexican TheMexican Tue, 07/10/2018 - 13:31 Permalink

I like the apprentice as well.  Still no one in jail.

Are you saying he is not a con man?  I remember in 2008 when housing blew up, he pulled the trump name off condos being built in Rosarito.  Turns out he just was renting the developers his name. Savvy business man yes, 100% honest no.

Investers got screwed he just walked away without a scratch.

 

In reply to by TheMexican

shortonoil TheMexican Tue, 07/10/2018 - 15:13 Permalink

Trump appears to be just covering his ass with this gambit. He knows that Americans hate high gasoline prices. The US is using stratospheric oil prices, and rising interest rates to push money out of the EM into the DE. So far it has succeeded to the tune of over $4 trillion a year, which is much more than what the immediate high oil prices are costing it. His comment about demanding that OPEC increase production by 2 mb/d is also a slight of hand. With Venezuela, Brazil, Nigeria, and now possibly Iran falling through the floor OPEC doesn't have an additional 2 mb/d, and he knows that! He is just hoping that Main Street doesn't. The problem is that $75 oil, and higher interest rates will eventually come back to bite the US right in the behind. It looks like this is all just rhetoric for the 2018 elections. Does he have a Plan B for when depletion finishes its inevitable route in the next few years. Not likely!

In reply to by TheMexican

Herdee Tue, 07/10/2018 - 13:32 Permalink

It'll mean more pipeline, storage and refinery investments in Iran by both Russia and China. Iran will find a way through direct barter with oil and gas, a gold backed bond or gold backed crypto currency and even their own devalued paper. It'll take time to permanently adjust outside the Dollar/SWIFT system but the big three countries in the EU seem determined to trade with Iran despite American hegemony economic threats. Once out of the American system, others could join with China's system one by one.

Alexander De Large Tue, 07/10/2018 - 13:44 Permalink

Voters who listen to Ron Paul in the 21st century deserve to die.

Ronald Paul looks like Luigi Mario if he shaved his moustache and decided to whine about America for 30 yrs straight.

Ronald Paul's face makes me hunger for Cinnamon Toast Crunch.