WALLACE: Reverse 'oil weapon' on Iran

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By Mark Wallace

OP-ED:

The deepening recession and financial crisis is a global problem. Economies the world over are slowing, businesses are closing, and jobs are being lost. The economic meltdown is causing untold amounts of pain for the United States, its allies, and trading partners.

A silver lining in the global financial crisis is the steep drop of oil prices. Lower oil prices are not only a welcome relief to consumers faced with recession but also have changed the economies of the world's oil producers for the worse. Iran's economy particularly has suffered under declining oil prices.

About 80 percent of Iran's export revenue and almost half of its government's budget come from oil and gas. According to recent reports, Iran must sell oil priced at more than $80 per barrel to keep its budget balanced. Oil now costs about half that amount on the world market.

Already weakened by U.S. and EU sanctions, Iran's economy now stands on the brink of economic collapse. The once popular President Mahmoud Ahmadinejad faces growing discontent from a citizenry suffering from high inflation, unemployment and poverty and now beginning to question Iran's foreign policy isolation.

The combined effects of the financial crisis and lower oil prices create an opportunity for progress on the most intractable foreign policy problem facing the West - Iran's quest for a nuclear weapon.

Seizing upon this opportunity, United Against Nuclear Iran (UANI) will play a part in channeling the activism of the American people. UANI recently launched the Iran Business Registry which compiles the names and key data of firms that are reported to work in Iran. We name names. Make no mistake - our goal is not to hurt gratuitously any legitimate business. Instead, the Iran Business Registry is a clearinghouse of information that activists in the United States and around the world can use in making business choices and focusing grass-roots pressure.

Those firms and the countries in which they are domiciled continue to operate as if the U.S. and EU sanctions that are driving Iran's economic isolation are rules to work around. Serious countries and businesses must understand that Iran's growing economic isolation is a vital component to a diplomatic solution to the potential atomic standoff.

Short-term economic profits cannot be a justification to circumvent international sanctions designed to thwart Iran from developing nuclear weapons. With Iran nearing economic collapse, effective economic measures to isolate the regime may make the difference between a diplomatic deal and a nuclear standoff.

With a new U.S. administration and a vulnerable Iranian economy, the time is ripe for a potential diplomatic solution. To make a diplomatic solution possible, international firms doing business in Iran cannot continue to provide the last crutch to the Iranian economy - in the global economy, multinational corporations that continue to work with pariah states are effectively as important as nations. These include German, Italian and Spanish corporations that do business in Iran and provide much of Iran's imports - imports that are on the rise.

Companies like Siemens and others are on the Registry. And only a handful of international companies provide Iran with refined petroleum - fuel that literally drives Iran's economy. Fuel providers such as Vitol and Trafigura are on the Registry.

Such pressure on business works - just ask Hewlett Packard Co. HP was forced to stop selling its products in Iran through a third party. Why did HP agree to stop? The Boston Globe highlighted HP's inappropriate Iranian business in an article and HP knew it had a public relations and potentially, a legal problem on its hands. HP should be lauded for doing the right thing.

The many other international businesses doing business in Iran must be made to feel the same pressure to pull out of Iran. The Iran Business Registry will help to do just that. The opportunity is clear. Concerted effort can make the difference in Tehran's negotiating disposition. Iran must realize it must end its nuclear program to end its economic isolation, and its economic isolation is to the point of being unbearable.

Simply put, we hope to make the cost of doing business with Iran too expensive to continue - just as the danger of a nuclear-armed Iran is too great to ignore.

Mark D. Wallace is president of United Against Nuclear Iran and in the last administration was a U.S. representative to the United Nations for management and reform.