Regional ripples from a nuclear deal

As gradual progress is made towards a potential nuclear deal with Iran, many question the implications that this agreement would have for the surrounding region. On Monday, the Woodrow Wilson Center hosted “The Iranian Nuclear Deal and the Impact on its Neighbors” to analyze the regional repercussions of a possible bargain. Abdullah Baabood, Director of the Gulf Studies Center at Qatar University, and David and Marina Ottaway, Senior Scholars at the Woodrow Wilson Center, discussed relations with the Gulf Cooperation Council (GCC) and neighboring Iraq, while Bijan Khajehpour, Managing Partner of Atieh International, analyzed the regional economic aspects of a nuclear deal.

The prospect of a nuclear bargain with Iran poses a great challenge for the GCC. According to Abdullah Baabood, each of the six GCC countries has a great stake in the Iranian nuclear deal and has many concerns regarding regional security, the economy, and the environment.

However, negotiations have been taking place secretly between Iran and the US, much to the dismay of the GCC. This is particularly insulting as the US is an important ally to the region, and a deal with Iran would be a major foreign policy issue with implications far beyond simply arms control. There is fear that Iran and the US will strike a grand bargain, resulting in the US leaving the region and Iran coming to dominate it.

The GCC fears this deal because it does not know how to interpret Iran’s status and whether or not it will strictly abide by the rules of the nuclear agreement. There is a great deal of unease about Iran spreading its wings throughout the Gulf and expanding its influence without restriction.

David Ottaway further analyzed the tumultuous relationship between Iran and Saudi Arabia over the past several decades. The two countries have a history of intense rivalry for regional dominance that is currently at its peak. However, there have been attempts recently to initiate dialogue between the foreign ministers. The main issue in these upcoming conversations will be determining the true meaning of détente for both the Iranians and the Saudis and exactly how to handle the challenge of energy and oil, as well as sectarian divides.

With the current situation in Iraq, Marina Ottaway highlighted the need to consider how the instability will affect a nuclear deal with Iran. The current sectarian division in Iraq could pose a threat to Iran, which has continued to back Prime Minister Maliki and ultimately has more influence than the US, due to its location. However, volatility is highly unfavorable for Iran and is not ideal for contracting a regional settlement in regards to its nuclear program.

Bijan Khajehpour then discussed the economic implications within the region, assuming there will be a comprehensive nuclear bargain with Iran.  There are four areas of either convergence or divergence between Iran and its neighbors. This includes:

1. The energy sector
2. Regional trade and cross-border investment activity
3. Competition for economic and technological dominance
4. International investment

The energy sector is a fundamental concern because of the growing demand for oil and gas reserves within the region. While the Persian Gulf holds nearly half of the world’s oil reserves, most states lack  natural gas resources, with the exception of Iran and Qatar. Other countries will need to import gas in the near future. “Keeping pressure on Iran’s natural gas sector is to the detriment of the whole region,” Khajehpour concluded, highlighting why energy efficiency will be a point of contention with the progress of an Iranian nuclear bargain.

There is still fierce ideological and strategic competition between Iran and the surrounding region over a possible nuclear deal. It has never been clearer to Iran’s neighbors that they must get involved in this bargain to have their vital interests addressed.