The EU decision to embargo Iranian crude oil in an attempt to halt its nuclear program is praiseworthy. Above all, it proves that Israel is not facing the Iranian nuclear threat alone. The EU is concerned about the Iranian program no less than Israel is. The embargo, however, is scheduled to take effect only on July 1, which proves that the EU is just as worried as Israel, but not as pressured. This troublesome issue -- for those who forgot -- also has a timetable. Only the future will reveal if these harsh sanctions prove to be effective, but at this point we can divine Europe's plan. The EU will stop importing Iranian oil - which constitutes only six percent of European oil imports, but 20% of Iranian exports, 80% of which comes from its oil production industry. Saudi Arabia will increase its oil production output and take up the slack for countries like Italy, Spain and Greece, which are more dependent on Iranian oil than their other European counterparts. The EU will also pressure Asian countries to embargo Iran's oil as well. Iran, tense over the move, will intensively court the Asian countries too. Japan and South Korea will apparently join the Western embargo, but it is not clear which side Turkey is on. China, Iran's largest oil client, will take advantage of Iran's situation and continue to purchase its oil, although at reduced prices. The Chinese believe that in any scenario, the Iranians will have their backs to the wall. Iran is likely to request a renewal of talks with the West, circa 2010, without committing to anything. The U.S. and France - both in election years - will agree to talks, wanting a stable economy and a reasonable oil price. And there is even another side to this story. It is not inconceivable that the Europeans ask Israel for concessions on the Palestinian track, in return for increased efforts on their part in the Iranian track. From this point on, there are at least two possible scenarios. The first is optimistic. Iranian citizens cannot bear the collapse of the Iranian economy, and the regime - which long ago forfeited its legitimacy in the wake of the corrupt 2009 elections - surrenders to the international community's dictate and, temporarily, suspends its nuclear program. In this scenario, the West wins. The sanctions are in place, there is no nuclear bomb, and no military strike on Iran. There is also a more pessimistic scenario. Iran's national pride is hurt and the public blames the West. As in the Iran-Iraq war of 1980-88, the people line up behind the regime and Iran clenches its teeth in defiance, does not surrender, and, like North Korea, becoming, on one clear morning, an official nuclear power. The sanctions are in place, Iran has a nuclear bomb, and there is no military strike on the country. There is another possibility, however. Iran - with its formidable military might - manages to antagonize the U.S. fifth fleet in the region. Mines and barrels of oil are placed in the waters and the Strait of Hormuz is closed to traffic. The nervous commander of a U.S. navy vessel fires a missile, just like in July 1988 (when a U.S. missile struck Iran Air Flight 655, a civilian jet airliner), and, quite unintentionally, a military confrontation that no one wants erupts in full force. In conclusion, there is no doubt the European move is good, but the timing is problematic.
Eventually, the Iranian economy will collapse. There is an official unemployment rate of 10% Iran and an inflation rate of 20%, but the numbers are actually much higher. The Iranian rial is steadily plunging, losing 50% of its value since December. The oil embargo will inevitably affect the income of every Iranian.
