Harsh new sanctions imposed on Iran were intended to so deprive its citizens of life's necessities that the government would be forced to end what the U.S. and its allies fear is a program to build nuclear weapons.
Instead, Iran's Revolutionary Guard on Tuesday test-fired missiles capable of reaching Israel and the U.S. Navy's 5th Fleet base in Bahrain. Iranian lawmakers have threatened to close the Strait of Hormuz to bottle up Persian Gulf neighbors' oil shipments. Senior officials warned that progress in nuclear negotiations won't occur until the United States and its allies show Iran more respect.
Iran says that its nuclear program is for peaceful purposes only, and since U.S. and European Union sanctions went into effect Sunday its officials have reacted with defiance and bluster. The Central Bank chief has reassured the public that $150 billion in foreign currency reserves should see the country through the trade cutoffs, and officials have said they stockpiled plenty of imported food and consumer goods.
But Middle East analysts see Tehran's posturing as unsustainable in the long run. As food prices soar, gasoline lines lengthen and the rial currency is eroded by inflation, Iranians who care more about their day-to-day existence than having a nuclear program will force leaders to make a choice, experts predict.
Iran gets 80% of its revenue from oil exports, according to the U.S. Energy Information Administration, which valued that trade at about $73 billion for 2010. Due to previous sanctions that have curbed Iranian exports and international bank transactions, production has already fallen from 4 million barrels a day two years ago to 3.3 million a day in May, the EIA said. The new sanctions are expected to cut exports by half, creating storage problems for what Iran can't sell and potentially forcing the government to shut down wells.
Those prospects have instigated the muscle-flexing coming out of Tehran in recent days, according to those monitoring the situation.
"I don’t think Iran will try, or that it would succeed in closing the Strait of Hormuz, but they will probably harass shippers in hopes of having an impact on the neighbors' ability to ship out oil," said Suzanne Maloney, senior fellow at the Brookings Institution's Saban Center for Middle East Policy.
Attempts to cast Iran as a victim won't rally nationalist spirits for long, Maloney said.
"These themes of conspiracy and economic warfare and of the world being against Iran are part of their history, but they are going to feel the impact of these sanctions in a way that nothing else in the revolution or the Iran-Iraq war had on their lives and wallets in the past 33 years," she said.
The rial has lost 40% of its value against the U.S. dollar since a round of sanctions were approved late last year. As jobs disappear in a shrinking oil industry and household incomes decline, Iranians may come to see their leaders as the cause of their hardships.
Alon Ben-Meir, an Iraqi-born Middle East scholar at New York University's Center for Global Affairs, expects the standoff over Iran's nuclear program to be resolved if and when its leaders realize they will lose power unless they abandon it.
Iran's Islamic leaders see themselves as the guiding influence of the Shiite-inhabited crescent that extends from the Persian Gulf to the Mediterranean Sea through Iraq, Syria and Lebanon, said Ben-Meir. That is why Tehran has insisted on inclusion in the Syrian peace process, he said, to ensure that the minority Shiite-offshoot Alawite sect of Syrian President Bashar Assad retains its grip on power and its political allegiance to Iran.
Israel has threatened to bomb Iranian nuclear facilities if they appear to be near to producing atomic weapons or entering what Ben-Meir calls the "zone of immunity," the relocation of development activities to fortified compounds like one at Fordow, near Qom, that would be invulnerable to air strikes.
Iranian lawmakers have already summoned President Mahmoud Ahmadinejad to parliament to explain why the economy has deteriorated so rapidly, said Ben-Meir, and the public is "not buying all of this" when told the setbacks are the result of unjustified sanctions.
Defiance is playing well on the domestic front in these early days, say the analysts, but Tehran's leaders will ultimately have to decide between the nuclear program and popular demands for decent living standards.
--Carol J. Williams in Los Angeles
Photo: An upgraded medium-range Shahab-1 missile is launched during the second day of military exercises on Tuesday by Iran's elite Revolutionary Guard at the Lut desert in southeastern Iran. Tehran's response to tightened sanctions has been defiance. Credit: Mojtaba Heydari/European Pressphoto Agency