New sanctions voted through by the US Congress aimed at preventing – or at least stalling – Iran’s nuclear ambitions will eventually empower Barack Obama to prohibit foreign companies that supply Iran with refined petroleum from doing business in America. Dealing with the mercurial mix of breastbeating and paranoia exuded by the Tehran theocrats is a real problem. But, even so, it is not clear this is the best way forward.

The guiding principles in dealing with Iran are: first, forge a phalanx of unity at international level; and second, make sure your policy discriminates between the regime and Iranian citizens – whose tolerance of the Islamic Republic has reached breaking point after last summer’s imposed election result and its bloody aftermath. Do the new sanctions pass either test?

Recent history shows that sanctions imposed by the US– with purported extraterritorial reach that can force its allies to rein in their corporations – do not really work. Furthermore, they hugely annoy America’s friends. This is not the time for that.

The Iran Libya Sanctions Act (Ilsa) sailed through Congress a decade ago. Yet, its effect was limited. Amid international outcry, not one company ended up sanctioned (due in part to presidential waivers of the law). In the following decade, about $30bn in foreign investment was committed to Iran’s oil and gas industry. Undeniably, however, Iran got much less than it needed, and had to deal with lesser companies.

The panoply of sanctions against Iran probably means it foregoes roughly a quarter of its potential national output; it needs to invest around $150bn to upgrade its oil industry in the next decade.

But denying Iran petrol – the target of the US Iran Refined Petroleum Sanctions Act– is a crude response. It is not just scattergun but unilateral and extraterritorial – when the imperatives are international unity, and to widen the growing gap between the regime and the people, not close it. So many Iranians, with such enormous courage, have directed their fury at the heart of this theocracy built more on material than on spiritual interests. It would be a disaster if the regime could deflect that outwards at the external foes it depends on to corral its people.

What is needed are measures such as successful US-initiated sanctions on financial transactions and individuals that target all the players in the regime, and command not just the support of the US and its allies but Russia and China and theirs. And Iranians.

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