There Will be Unseen Costs to be Paid over the War in Iran. Who is Weighing Them?

Cipher Brief Executive Editor Brad Christian spoke in-depth with former National Intelligence Manager for Iran at ODNI Norm Roule about the current “operational pause” and about the unseen costs of any deal. Their conversation has been lightly edited for length and clarity. You can also watch the interview on The Cipher Brief’s YouTube Channel.

THE INTERVIEW

Christian: The situation with Iran has continued to progress in ways that maybe people didn't expect or anticipate when this war started. How do you describe where we are right now in terms of progress toward ending this war?

Roule: Where we are right now is in a lull. This is an operational pause. We're not approaching a significant core agreement. This is instead a period of coercive restraint. It's not a ceasefire. And Iran has continued to attack ships, but you're seeing the U.S. restrain its response again here to give diplomacy a chance. The president is showing considerable restraint. At the same time, the assets we have in the region are immensely powerful, immensely capable, and very well led. So, they have everything they need to do to undertake the dramatic operations the president has discussed. The diplomacy itself that's underway is a challenge. Each side is describing it dramatically differently.

If you look at the position of each side, there has been a consistent trend. The U.S. will announce negotiations, and the Iranians will deny negotiations are taking place. A few days later, there will be indirect negotiations through regional parties, still accomplishing the same things, but we're not at the table to talk about nuclear issues, missile issues, or militia issues as originally discussed.

The Iran-Oman mechanism that's being talked about right now in the press is likely being overstated by the Iranians and by some who would believe that concessions to Iran are the appropriate outcome from this crisis. Here's why it's being overstated: If tolls of any sort are charged, what happens to a shipper who refuses to pay? How does work in association with sanctions that have been imposed by the United States? Are American ships and American-related ships, allowed to pay Iran money? Through what mechanisms, what channels? Will we sanction other countries for paying Iran money through these channels? Iran has dictated which countries can enter the Persian Gulf and the bulk of this channel is through Iranian waters, but according to press reports, the Omanis must tell the Iranians who is transiting south. Iran's parliament has said no enemy countries can transit. Are Israeli or Israeli-related ships then banned from the Gulf? These are these are hugely consequential questions that are being glossed over by those who would say, ‘well, a deal is being worked out’. But this situation does show that while the U.S. absolutely has the military edge, it is restraining itself, and that has given Iran an ability to influence some would say, ‘control the pace’ of shipping in the Gulf. That shipping continues, and I've seen reports that as many as five million barrels of oil a day are now moving through the strait, which is going to reduce the pressure on oil markets, but this remains an unreliable waterway. Insurance rates remain very high and will remain high. And the blockade, of course, remains in place. This is a very delicate situation.

We also have to consider what happens if the Houthis look at the Iranian Oman deal and say, we want the same deal regarding the Bab el-Mandeb. What is the premise to refuse that? What would we do if the Houthis responded in their own way to attacking ships in the Red Sea?

So, we're in a very consequential period. And this is a period consequential for Iran because they're also in dire need of economic assistance. Their inflation is about 70%. Unemployment is horrific in many locations. I've seen figures as high as forty to forty-five percent in some areas. And the Iranians of course are showing defiance and claiming this isn't a problem, but this has got to be touching their decision making. And I think that's something the White House is considering.

Christian: President Trump has been very clear on where he stands on the issue of paying fees for passing through the Strait of Hormuz. Why is Iran pushing this issue when there were no fees in place before the war started? Is this one of Iran's most powerful points of leverage that they have over the strait? How are you thinking about their position on these fees?

Roule: It's a good question and I'm not putting a value judgment on it. I've tried to remain neutral on these issues. But those who advocate for making a deal with Iran, you know, diplomacy comes with severe consequences. If Iran is able to acquire control over the strait, will that collapse the international sanctions regime? For example, if Iran is able to control the strait in this regard, can it dictate which food shippers can come into Kuwait? If Iran controls the strait, it now has a permanent foot on the throat of the international community. And the idea that if we just do this, we can then build on trust with an IRGC government has no evidence in reality. Now that doesn't mean that it may not happen, but those who say you can build on this are not producing an argument that makes sense. Iran would be able to inject considerable power projection into the region in an unprecedented way, gaining billions of dollars, and that money would inevitably go to its missile program and proxies. And those who talk diplomacy with Iran, and you can see this when you look at social media statements or foreign affairs articles. The authors who speak most passionately and eloquently about engagement with Iran can't seem to acknowledge that people will die as a consequence. Now, that makes me sound like I'm opposed to this but I'm just giving you all the reasons why this is a problem.

The region, of course, has no desire for Iran to have this capability. But they also have no desire for a missile and drone war. That you either have a drone war, missile war, or give in to Iran, those are usually statements made by people who aren't professional diplomats, professional policymakers or have little understanding of the regional issues. There's going to be some sort of path in the middle that works if we're to protect and preserve sanctions as our tool against Iran's terrorism and other activities and if we’re to protect and preserve the national sovereignty and security of these countries who are our partners.

Also in the details of this deal are questions over whether the U.S. military would be banned from the Persian Gulf. The Iranians would have to approve the passage of U.S. military ships, which of course we wouldn't agree to, but the Iranians could claim that as a violation and things could unravel. We're going to land in a gray area on this if diplomacy is to succeed and it may not succeed.

Christian: In public statements, President Trump seems to be losing patience with the process. The president has said before that if Iran doesn't make this deal, that's it and we've witnessed similar red line crescendo moments before. You mentioned the IRGC led government. It's clear that they are running the country now. It's not clear how the diplomatic process is working, certainly by historical standards. What are your potential measures of success or indicators that the diplomatic process has run its course and what are you watching as potential next steps?

Roule: Throughout the last twenty years, various administrations, Democratic and Republican, have each said the same thing that we will try every possible diplomatic option for as long as possible and that all responses remain on the table. But once we've shown the world that we have tried every diplomatic option and the Iranians won't take yes for an answer, won't take diplomacy for an answer, then we'll be justified in using force.

I've been in congressional testimony where I've had Republicans and Democratic State Department officials insist that was U.S. policy. And that is congruent with the President's statements. He's basically saying, ‘Look, I'm going to give them every opportunity to negotiate’ because the consequences of a much broader conflict for the region, for the Iranian people, for civilians, for the U.S. war fighters who are risking their lives in the region, all of this will come into play.

We do have the assets in the region and our leadership in the military force there is exceptional and highly experienced. And based on the nature of the attacks conducted by the U.S. military in recent weeks, one can deduce a couple of points.

The first is that we know a lot about Iran's military architecture. And second, Iran has very little defense against our attacks because we've seen very little air defense or port defense as a result. Iran only has an offensive capacity. And it's attacking civilian architecture as well as U.S. military bases, not being used by the U.S. military, but nonetheless, they're bases where we have that presence. But at some point, if you believe in international values, we we've got to stand with our partners to protect them in a way that is congruent with their national interest and leadership approaches.

Christian: Over the weekend, news reports indicated that the Gulf states were the ones that convinced President Trump to not escalate this war right now. Do you have a sense of where the Gulf states are right now in terms of their approach to President Trump, their approach to Iran?

Roule: I think you need to have several different pillars in mind. First, let's talk about what the Gulf States have done that has been quite successful. Their defense against Iran has been very, very successful as a result of years of engagement with the United States and with the U.S. private sector, which is playing a large role in their successes and will play a role in their future successes in terms of defending against cyberattacks and drone and missile attacks. No air defense is perfect, but the performance by the GCC has been exceptional. And they have protected three things that we should applaud.

First, they've protected their own nationals and their own infrastructure, which is the duty of every state. They're protecting millions of other citizens to include hundreds of thousands of Americans who live in the region. They're keeping American lives safe with their air defense. And last, they've protected the international economy, preserving through their energy flows and their handling of the situation, the ability to maintain stable energy prices and distillate impact on subsidiary industries. All of that is exceptional.

At the same time, we've seen the Saudi military crisply respond to Houthi aggression with surgical strikes, and the Saudi military joining with the United States on strikes on Iraq, which is a first. And it's also a demonstration of the quality of Saudi Air Forces in general. So, there's a sense of extremely close partnership between our militaries. But how they move forward, you know, it is their neighborhood, so how they move forward in a world where there could be a major attack on Iran is likely going to mean that they're going to face more missile and drone attacks. They're going to want a voice in this.

They know their region better than we do. We should respect that. And I think that's what you saw last week in the reports of phone calls to the president, where he gave diplomacy a chance and was about to move, and I believe he was serious, based on my understanding. But he also took into consideration partners, people who have lives on the line and are trying to defend the world's economy and know their neighborhood very well. So, I'm not unhappy with what's happened. I don't think you can criticize that. That's a natural, organic and appropriate process.

Christian: Let's talk gray zone just for a moment. We've seen reports recently that the hacks against the water infrastructure in Minnesota could have involved Iran. We've seen reports that China, although not confirmed, was planning to deliver air defense systems to Iran. There's no doubt about the cooperation continuing between Russia and Iran. What are you looking at that some of us may be missing?

Roule: Press reports confirm what many observers have cited, and that is that Iran's cyber activities have continued unabated since this conflict began. Indeed, before the conflict, against multiple actors in the United States and largely that's been successfully defended against by our national cyber architecture, as well as the architecture of our Gulf partners. The president has disagreed with the assessment on Minnesota and other places, but that does fit with the past pattern of Iranian cyber activity against SCADA and other systems in the United States. and has been a longtime target of Iran itself. It is an attack on our national infrastructure, if it's proven. And if proven and we don't respond to it, the people in Tehran are going to say, ‘Well, there's no reason we shouldn't continue to do this’. So, I think that issue itself is pushing the White House towards alternative actions besides diplomacy. And in fairness, it has been a traditional standpoint of multiple administrations to say how we respond. Is it at a time and way of our choosing? We don't respond symmetrically, you know, we don't do the exact same thing back. So, if the United States were to respond with airstrikes against Iran’s cyber architecture, which would probably be a good thing in a conflict, that is an appropriate proportional response just done differently. And it would be congruent with multiple administrations' views and statements as to how they will treat Iranian aggression.

Christian: What are you looking for next? What are you paying the most attention to?

Roule: As I mentioned, if you give Iran control of the Strait of Hormuz, you're going to have consequences, not only in terms of whether they will ever negotiate seriously with us, but what does it mean for the Red Sea, and all sorts of other things? And those who say, well, we can work past that usually aren't in the Gulf, usually don't have children fighting right now and usually won't pay the price of those decisions. Not to say they won't be made, but we need to be upfront on those costs, and some of the issues aren't being discussed.

What I'm looking for is the conversation about those costs. And if it doesn't happen, that's a bad thing for everybody. The other issue is I think we need to look at is how the U.S. is going to respond to continued Iranian aggression. When does the U.S. restrain itself? Right now, the president is clearly, as he's announced, looking at de-escalation. But if the Iranians continue to probe with cyberattacks and missile and drone strikes, they've got to be addressed in a way that says to Iran, that there is a material price to be paid for that.

In the negotiating channels, I would look for any evidence that the U.S. is now directly dealing with the Iranians. That's unlikely to happen in the near term. That doesn't mean that diplomacy isn't occurring robustly through our partners, but any evidence of direct negotiations with the U.S. would be a very significant uptick.

And last, I would look for someone to address the issue of how any payments to Iran, involuntarily or otherwise, will impact the sanctions regime. Failure to address that is irresponsible in a policy world and indicates that maybe that's not being taken seriously.

And maybe one more point, and that is we should expect rhetoric on each side, but we should focus on what happens on the ground via the effervescent statements that are so often in the media.

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