During the election campaign, Obama edged away from earlier indications that he would talk directly with Ahmadinejad. When asked, Obama's advisers noted that Supreme Leader Ayatollah Ali Khamenei, not the president, was the principal decision-maker in Iran. In any case, they said, contacts would start at a lower level, after first coordinating with allies. In accordance with that line, Obama might be expected to authorise such contacts, including meetings between naval commanders to work out an incidents-at-sea agreement to preclude an inadvertent conflict. One such clash almost occurred in January, when a radio prankster issued an attack threat just as five armed Iranian speedboats were approaching US Navy warships.
Obama is likely to follow up on a suggestion floated by the State Department in July of posting consular officials to the Swiss-run US interests section in Tehran; this would be the first American diplomatic presence in Iran since local students overran the US embassy in November 1979. Iran's leadership sees danger in the idea, because a US consular section, in addition to supposedly housing spies, would be a beacon for young Iranians seeking US visas and an inspiration to reformists.
Secretary of State Condoleezza Rice said on 26 November that President George W. Bush had decided the interests section was 'something that the United States might want to pursue', but international events had interfered. If Obama makes such a proposal, Iran is unlikely to reject it outright. It is more likely to repeat a request that the US first allow direct flights between Tehran and New York, counter to the US policy of imposing increased isolation on Iran.
No illusions
Whichever strategy Obama pursues, his advisers harbour no illusions that talks would produce early settlement of the enrichment issue. Rather, they reason that offering to engage with Iran is a way for the US to gain leverage, since it would give partner countries that favour engagement a trade-off for tightening sanctions, on the grounds that both sticks and carrots need to be strengthened in harmony if Iran is to be persuaded to change. Gaining such leverage through allies was Washington's reason for sending its third-ranking diplomat, Under Secretary of State William Burns, to Geneva for E3+3 (the E3 plus China, Russia and the US) exploratory talks with Iran on 13 July.
In any case, Obama's leverage will already be stronger for other reasons. The sharp drop in oil prices has had a far more negative impact on the Iranian economy than any sanctions imposed to date. Recent studies variously estimate that Iran needs $70–95 a barrel to break even – well above the market price of about $50 a barrel in late November. A prolonged price slump will exacerbate the domestic criticism Ahmadinejad already faces for his economic mismanagement.
It was perhaps no wonder then that Ahmadinejad sought to gain the initiative by sending a congratulatory letter to Obama. Rival hardliners initially criticised Ahmadinejad's action as an uncoordinated attempt to seek reconciliation. Soon, however, they came around in support of the Iranian president, especially after Obama's cautious remarks that he was 'aware that the letter was sent' and he would be 'reviewing' it. 'How we approach and deal with a country like Iran is not something that we should simply do in a knee-jerk fashion,' Obama said. 'I think we've got to think it through.'
If there is to be an opening with the 'Great Satan', the hardliners want one of their own to take credit for it. Meanwhile, if those offering advice to Obama agree on one thing, it is this: he should not do anything that would enhance Ahmadinejad's prospects for re-election in Iran's own presidential elections in June 2009.
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