Israel should strike Iran where it hurts the most: Suffocating its oil revenues could topple the regime

Since Israel could easily cut Iranian funding to Hezbollah and its other enemies by doing so, why has it refrained from attacking the country's oil exports? In a word: “The Obama Doctrine.”

Throughout its early history—but not during the last four decades or more—the main security threats to Israel came from its Arab neighbors. This resulted in several wars against Egypt, Jordan, Syria, and Iraq. However, with the exception of Jordan, Israel’s Arab enemies were actually representatives of a much more potent threat: the Soviet Union. To displace American power in the Middle East, Moscow supplied thousands of tanks and hundreds of aircraft to Cairo, Damascus, and Baghdad. Thousands of Soviet instructors also arrived, even as Arab officers were trained in Soviet academies.

This was a formidable threat to Israel’s survival in its early decades. But no one there even considered the possibility of directly attacking the Soviet Union itself. Aside from the certainty of a massive retaliatory response, there simply were no relevant targets that Israel could strike, even if its small air force managed to penetrate Soviet airspace. Today, however, everything is different. The Shiite militias that have been attacking Israel for years, and that significantly intensified their attacks after October 7, are entirely armed and directed by Iran. This is true throughout the Middle East, from Hezbollah in Lebanon and the Houthis in Yemen to a couple of militias in Iraq. But unlike the Soviet Union, Tehran does not enjoy immunity from Israeli action.

The crucial vulnerability is Iran’s money that sustains the militias. Shiite fighters in Iraq can extract some funding from the country’s oil revenues. Hezbollah, for its part, receives some financing from Shiite diamond buyers in Sierra Leone and smugglers in South America. However, over the years, this organization and its counterparts in other parts of the region have become increasingly dependent on the funding they receive from their paymasters in Tehran. If the money is cut off, they will quickly wither because even the most committed must receive their pay to feed their families.

This is the most obvious case in Yemen, one of the least productive countries in the world, where the Houthis are financed by monthly payments from Iran. But Hezbollah has also become more dependent on its Iranian ally, especially as its extortions on airport and customs revenues have yielded diminishing returns with Lebanon’s descent into poverty.

All of this means that Iran’s export revenues now must cover a surprising variety of military expenses abroad, in U.S. dollars rather than national rials. Beyond maintaining foreign allies, starting with Hezbollah, there are the imported components and supplies consumed by the local Revolutionary Guards, with their 125,000 soldiers and a naval force. This includes imports of missile and rocket components from China and North Korea, as well as the foreign currency costs of the entire nuclear program being developed on a very large scale.

In practice, most of this cash comes from a single source: oil. It is true that Iranian farmers grow pistachios and other marketable products, and that there are some manufactured exports, even if the famous Tabriz carpets are out of fashion. However, according to the latest count, in 2023 oil accounted for 83% of Iran’s exports. For their part, traders exporting Iran’s agricultural and artisanal goods tend not to repatriate the foreign currency they earn, but rather use it for the imports they bring in. Meanwhile, although they are highly celebrated in regime propaganda, state-controlled industrial exports remain scarce.

In other words, the flow of dollars that sustains Israel’s enemies, and that has caused so many problems for Western interests from the Syrian desert to the Red Sea, emanates almost entirely from the oil loaded onto tankers at the export terminal on Khark Island, a piece of land about 25 kilometers off Iran’s southern coast. Prime Minister Benjamin Netanyahu warned in his recent speech to the United Nations General Assembly that Israel’s “long arm” can also reach them. In fact, the location of Khark in the Persian Gulf is relatively close. At 1,516 kilometers from Israel’s main air base, it is much closer than the Houthis’ main oil import terminal in Hodeidah, Yemen, a site that was destroyed by Israeli aircraft in July and attacked again yesterday.

Iran has made great efforts to reduce its dependence on the Khark terminal. This is not because it is too close to Israel, but rather because it was too close to Iraq and, in fact, was attacked and incinerated during the Iran-Iraq war. The result was the newly inaugurated Jask oil terminal in Iran. Located on the shores of the Indian Ocean, it is much farther from Israel than Khark. But for the air planners of the Israel Defense Forces, that is not a problem: oil reaches Jask through a very long pipeline that can be interrupted at points even closer to Israel than Khark Island.

Since Israel could easily cut Iranian funding to Hezbollah and its other enemies by doing so, why has it refrained from attacking the country’s oil exports? In a word: “The Obama Doctrine.” Tacitly but vigorously enacted by the former president, it prohibited any Israeli or U.S. attack against Iran, even as the Islamic Republic continued to kill U.S. soldiers in Iraq and Yemen, and continued to attack Israel through its proxies. On April 13, Iran even directly attacked Israel. In the wake of Obama’s great fear of being manipulated into going to war against Iran, just as his predecessor was convinced to go to war with Iraq, the then-president’s total pursuit of a historic reconciliation with Iran completely ignored the simple fact that the fanatical rulers of the Islamic Republic could not reconcile with the West. As Obama’s people are also part of Joe Biden’s White House staff, the United States has persisted in this policy of unilateral moderation, which it has also imposed on Israel. This occurs even as the ayatollah’s regime has continued to violently suppress a pro-Western opposition that passionately hates its corrupt and wasteful government. U.S. policy did not change when Iran continued to attack its allies in Saudi Arabia and elsewhere.

In the event of a Kamala Harris victory this November, Obama’s staff would remain in the White House team. This leaves a narrow window for Israeli action against Iran. Undoubtedly, attacking a vast country of 91 million inhabitants would be a reckless act for Israel under any circumstances. But stopping Iran’s oil revenues—whose benefits are denied to its suffering population by an oppressive regime that most Iranians bitterly oppose—is a completely different matter. Moreover, given that hyperinflation has caused absolute hunger in Iran’s urban population, for the first time since the fall of Shah Mohammad Reza Pahlavi in 1979, an attack on the country’s oil exports could even trigger the regime’s downfall. Of course, there are many variables between any Israeli action and such a happy outcome. But if the destruction of Iran’s oil revenues ultimately led to the end of the ayatollahs’ regime, it would not only be Netanyahu who would celebrate.

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Article originally published in Unherd and republished with permission from the author.
October 1, 2024