Iran is dangerously backed into a corner

The situation inside Iran is becoming more unstable by the day. The daughter of former President Rafsanjani just received a 6 month jail sentence for political crimes. The Supreme Leader is proposing to abolish the post of President and moderates will not be allowed to stand in the coming parliamentary election.

A clause in the NDAA just passed imposes sanctions on any financial institution that deals with Iran's central bank. Iran has denounced this as a blockade and threatened to close the Straits of Hormuz in response, then withdrawn the threat and as of this morning is threatening to prevent a US super carrier sailing through the straits.

The confused diplomatic signals are not the result of changes in policy but the fact that Iran has two power centers that are in competition with each other. The Presidential faction would like to provoke an attack by the US as a small war would help them consolidate their position against the Supreme Leader. In the short term, the Supreme Leader has to stop the Presidential faction but can't do so in a way that would undermine the galvanizing effect that opposing the 'great satan' has for the regime.

Iran is reacting to the sanctions as an existential threat for internal political reasons, not because they are an existential threat. The actual impact of the sanctions is likely to be very minor. Russia, China and India need Iranian oil. It is very easy for sovereign nations to find ways to move money to pay for things. They can set up single purpose private banks, they can barter, they can pay in their own currencies.

Closing the straits would be a blockade and thus an act of war. If Iran fires first they are going to lose the resulting war. The US does not have the ability to occupy Iran but they can destroy pretty much the entire military infrastructure if the neighboring states are willing to support the attacks.

If the US or Israel fires fist, Iran wins. Or rather the regime does. Closing the straits in response to sanctions would be an unprovoked act of aggression. Closing the straits in response to a bombing raid would be a measured response. Further US escalation at that point would only make the situation worse, much worse.

By far the best approach for the US is to watch developments cautiously. The US has already achieved 'regime change' in Iran once. In 1953 the democratically elected government of Iran was replaced by a thug in a coup organized by the CIA. Khomeni knew all about that coup because he was one of the rabble rousers the CIA paid to start the riots that brought down Mosaddegh. That is why he sent the students to raid the US embassy in 1979, the regime was afraid Carter was planning to direct a counter-revolution. They could also destroy evidence of Khomeni's role.