When President-elect Barack Obama introduced his national security team, he identified "preventing the spread of nuclear weapons to Iran and North Korea" as a priority, and for good reason. The International Atomic Energy Agency reported Nov. 19 that Iran is increasing its production of nuclear fuel while denying IAEA inspectors access to sites or documents connected to Tehran's nuclear program.
That same day, Iran's nuclear chief said that Iran has increased the number of centrifuges enriching uranium from 4,000 to 5,000 since August. Tehran has now produced enough nuclear material to make an atomic bomb, experts say. It could also sell or donate nuclear material to terrorists.
Mr. Obama will need to forcefully employ all the economic and diplomatic tools at his disposal, without discarding the option of military force, to persuade Iran's leaders to end their uranium enrichment and support of terrorism.
Ironically, the economic crisis has strengthened Mr. Obama's financial and diplomatic leverage against Iran by precipitating a collapse in oil prices, which have plummeted in recent months from nearly $150 a barrel to about $50. The United Nations has imposed three rounds of economic sanctions against Iran since 2005 to stop Iran's uranium enrichment program, but high oil prices and the sanctions' weakness minimized their effectiveness as Iran used oil revenues to subsidize the prices of gasoline, food, housing and other necessities. Newly low oil prices - and Iran's dependence on imported gasoline - will now render economic sanctions against Iran more effective and make its leaders more willing to negotiate over their nuclear program. Iran, surprisingly, must import 40 percent of the gasoline it needs. When President Mahmoud Ahmadinejad rationed gasoline during the summer of 2007, violent protests broke out, forcing him to end the rationing.
It is equally surprising that neither the United States nor our allies who seek to end Iran's uranium enrichment have attempted to cut off gasoline sales to Iran. Iran bought nearly all of the gasoline it imported from Swiss, Dutch, French, British and Indian companies. The Bush administration, however, has reportedly never pressed their governments specifically to stop companies based in their countries from selling gasoline to Iran. One of the first steps the Obama administration should take is to do just that.
Furthermore, the U.S. has significant direct leverage over the companies that supply most of Iran's imported gasoline. For example, the U.S. government's Export-Import Bank recently announced $900 million in loan guarantees to expand the refinery complex in India at which India's Reliance Industries refines 10 percent of Iran's gasoline. The Obama administration should hold up those loan guarantees that have not yet been disbursed unless Reliance stops supplying gasoline to Iran.
Cutting off Iran's gasoline supply could be decisive in convincing Iran's leaders to negotiate a cessation of their nuclear program, because the costs to them will outweigh the benefits. Unfortunately, many of our European allies are increasing their overall trade with Iran rather than cutting. Germany, for example, is still Iran's most important trading partner in the West, and its exports to Iran increased by 13.6 percent in the first quarter of 2008 compared with the same period in 2007.
Another step the Obama administration should take is to sustain American pressure on foreign banks and oil companies to halt their dealings with Iran's energy sector. This effort has led such major firms as Germany's Deutsche Bank and Commerzbank, England's HSBC, Credit Suisse and Royal Dutch Shell to halt or limit their business with Iran.
In addition, Mr. Obama should induce the next Congress to reintroduce the Iran Sanctions Enabling Act (which passed in the House 408-6 in June 2007 and which he introduced in the Senate) as well as an updated version of the Iran Counterproliferation Act. These measures would close loopholes in and tighten enforcement of U.S. laws sanctioning Iran.
Iran's nuclear weapons program and support of terrorism pose as serious a threat as the economic crisis. Mr. Obama must employ these strengthened tools against this threat just as aggressively as he deals with the economy - and at the same time.
Jennifer Laszlo Mizrahi, a resident of Annapolis, is the founder and president of The Israel Project, a nonprofit that educates the press and the public about Israeli security and peace issues. She is a former foreign affairs legislative assistant on Capitol Hill. Her e-mail is jenniferm@theisraelproject.org.