As Shiite Crescent Recedes, Iran’s Power Wanes

 With global attention fixated on Iran’s nuclear program, an equally significant development for Iran’s strategic outlook is being overlooked. The Shiite Crescent that began to take shape in the wake of the 2003 U.S. invasion of Iraq has effectively receded. Regardless of the outcome of the nuclear issue, Iran poses a much smaller threat to the region than it did just a few short years ago.

A number of events have converged to put Iran back in the box it now finds itself in. The most obvious and consequential of these are the onset of the Arab Spring and the uprising in Syria.

The concept of a Shiite Crescent was predicated on an unbroken chain of Iranian influence stretching into the heart of the Middle East via Iraq and Syria, and continuing on to the Levant and Palestine through Tehran’s ties to Hezbollah and Hamas. Given its location, Syria was always the lynchpin of this crescent. The loss of a friendly government in Damascus would deny Iran an overland route to ferry supplies to Hezbollah in Lebanon. Iran’s only option would then be to supply Hezbollah by sea, a perilous course given that the waters in between are dominated by Tehran’s adversaries.

Even if the Syrian rebels fail to topple the Assad regime, prolonged conflict will be an enormous resource drain on Iran and Hezbollah, and the continuing chaos will make Syria unsuitable as a transit route for supplies. In either scenario, then, Iran’s aid to Hezbollah is set to steadily decline.

Significantly, this decline in aid will coincide with Tehran demanding more from its Lebanese ally as its low-level conflict with Israel and the U.S. intensifies. Hezbollah’s willingness to continue shouldering these costs cannot be taken for granted, especially given its growing domestic troubles. Without Hezbollah’s support, however, Iran’s ability to wage an asymmetric campaign against the West is very much in doubt. Indeed, this year’s string of failed attacks on Israeli diplomats and interests has demonstrated quite clearly the limitations of Iran’s asymmetric capabilities. 

Additionally, the Arab Spring has significantly curtailed Iranian influence in Palestine by straining Iran’s relationship with Hamas, likely irreversibly. The relationship between Tehran and Hamas, a Sunni group, was always built more on mutual necessity than on any sort of affinity. The Arab Spring has reoriented the strategic landscape for Hamas, allowing it to use the new Muslim Brotherhood government in Egypt and Turkey’s greater involvement in the region to pivot away from Iran. In this sense, the Hamas-Iranian spat over Syria has only accelerated their likely estrangement.

The Syrian uprising and Arab Spring, important though they are, are only the most prominent examples of Iran’s diminishing fortunes. Nearly as consequential are Iran’s growing economic woes. Like most countries in the region, Iran’s economy, and especially the government’s revenue, is heavily dependent on energy sales. In fact, a large if often overlooked factor in the rise of Iranian power in the past decade was the spike in energy prices.

Instead of using the extra revenue from high energy prices to address the structural defects of the Iranian economy, the government exacerbated existing problems by increasing subsidies to the lower classes that comprised President Mahmoud Ahmadinejad’s main constituencies. This policy’s weakness became evident when the global financial crisis caused a sharp drop in the price of oil and natural gas, forcing Ahmadinejad, who came into office pledging to increase entitlement spending, to revamp himself as a champion of subsidy reforms.

Iran’s economic outlook remains dim for the foreseeable future, in part due to the Western sanctions on its energy, shipping and banking sectors. According to recent estimates, sanctions have already caused Iran’s oil exports to decline by 45 percent on the year and reduced the value of its currency, the rial, by 80 percent relative to the dollar, including an incredible 40 percent drop in the past week alone.

Furthermore, the sanctions’ impact are likely to be magnified by the economic downturn that the world’s largest rising powers, including China and India, are now facing. As their economic production declines in the near term, these states will have less incentive to circumvent the U.S. and European Union sanctions against Iran. Additionally, as the global economy slows, whatever oil Iran is able to sell will come at a lower price, further draining the Iranian treasury.

Finally, Iran’s regional position has suffered due to the greater pushback it is encountering from regional and extraregional states. Some of this was inevitable given the anxiety Iran’s post-2003 rise caused among the Arab states, Israel and the U.S. Nonetheless, Iran’s own policies have only added to its troubles. In particular, threatening to close the Strait of Hormuz, through which 20 percent of the global oil supplies travels, has proved to be a major strategic blunder. Besides undercutting its credibility after Tehran failed to make good on the threat, the threat itself propelled the U.S. into action in the form of a major naval deployment to the region that has degraded Iran’s ability to target shipping in the strait. It also caused jittery Arab states to more openly align with the United States against Iran, as evident from, among other things, their reported willingness to consider hosting larger missile defense systems, as well as their participation in the massive U.S.-led naval exercise in the Strait of Hormuz last month.

Additionally, Iran’s continued support for the Assad regime has sapped its soft power in the Arab world, which has afforded Arab leaders greater freedom of action in balancing against Tehran, in part by strengthening regional organizations that exclude Iran, including the Arab League and the Gulf Cooperation Council, while undercutting organizations that Iran is a member of, such as OPEC.

While the world continues to focus on Iran’s nuclear program, Iranian political standing in the Middle East has suffered a string of serious setbacks. Iran’s centrifuges may continue to spin, but the sun has set on the Shiite Crescent, for now at least.

                                                                                                                                        Zachary Keck-The Atlantic

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