In March 2023 Azerbaijan finally opened its embassy in Israel, despite establishing bilateral relations in 1992. Baku opted to open its embassy in Tel Aviv after restoring its territorial integrity. The next month, in April 2023, Israel inaugurated its embassy in Ashgabat, Turkmenistan, making it the closest Israeli embassy to Iran, just 17 km from the Iranian border. Iran followed all these diplomatic moves with annoyance and concern.

Normalization of Saudi-Israeli relations was also widely discussed as an extension of the Abraham Accords. Momentum similarly grew in 2022 for Israel and Turkey to normalize their strained relations. At the next meeting between Israeli prime minister Benjamin Netanyahu and Turkish president Recep Tayyip Erdoğan, they agreed to continue developing bilateral relations and to pay official visits to each other.

Azerbaijan’s initiative to set a new trilateral format for cooperation between Azerbaijan, Israel, and Turkey was advancing rapidly in an environment of geopolitical uncertainty for Tehran. The October 7, 2023, attack on Israel gave Iran the chance to derail possible Saudi-Israeli and Turkish-Israeli ties and stop the Azerbaijani initiative for trilateral cooperation in its tracks.

Tehran seized the opportunity of the war in Gaza to pursue its grand, multidimensional strategy. It is using economic means, via a set of coercive actions, to achieve foreign policy objectives, something widely overlooked. Iran’s multidimensional strategy seeks to achieve multiple goals simultaneously, in both the Middle East and South Caucasus.

Iranian strategy prioritizes using economic means to isolate Israel by derailing its relations with Turkey, Azerbaijan, and the Gulf Arab states. Iran’s subtle, calculated, approach also intends to inflict an economic blow on Azerbaijan, Israel, and Turkey, which makes substantial revenue from the export of oil via Turkey to Israel.

Considering the global nature of the modern economy, economic power plays a significant role in shaping geopolitical outcomes and foreign policy. In this case, Iran’s usage of political, diplomatic, and media instruments, as well as its regional proxies like the Houthis in Yemen, merits analysis. The use of economic means to shape geopolitical outcomes and achieve foreign policy goals is the cornerstone of Iran’s multidimensional strategy. Iran does not possess the necessary economic means, by itself. However, the Islamic Republic does possess significant geopolitical assets in the form of proxy groups and diplomatic and media resources, which it is using to hinder or shut down global navigation and prevent the flow of strategic commodities to Israel.

The late Iranian foreign minister, Amir Abdollahian, called on Muslim-majority countries to impose an oil embargo on Israel and expel its envoys in October 2023. Iran’s Supreme Leader Ayatollah Khamenei called on Muslim countries to cease trade, particularly food and oil with Israel, the following month. Hasan Nasrallah, leader of Hezbollah, Iran’s Lebanese proxy, followed Ayatollah Khamenei’s call and appealed to Arab and Islamic countries to impose an oil embargo on Israel.

The call for an economic boycott of Israel by Muslim-majority states gives an insight into Iran’s multidimensional strategy. The late Iranian president, Ebrahim Raisi, also reiterated Ayatollah Khamenei’s call for a boycott of Israel at the Arab-Islamic Summit in Riyadh in November 2023. President Raisi argued that Islamic countries must cut diplomatic relations as well as refuse to buy Israeli goods, echoing Khamenei’s call. Weeks after his call for an economic boycott, Ayatollah Khamenei had urged Muslim countries that have diplomatic relations with Israel to halt diplomatic ties for a limited period. In January 2024 Ayatollah Khamenei repeated his call for a total blockade of Israel by Muslim countries.

The official rhetoric of Iran’s leaders clearly shows Tehran’s multidimensional strategy of using the war in Gaza to isolate Israel economically, impose an oil embargo, destroy economic and diplomatic ties between Israel and Muslim-majority countries, and position Iran as a major geopolitical force in the region. To implement this strategy Iran has employed coercive media propaganda against many countries, including Azerbaijan, Kazakhstan, and Turkey. Iranian media has intensified criticism of Turkey for its trade and economic ties with Israel and Azerbaijan for oil exports via the Baku-Tbilisi-Ceyhan pipeline, which meet 40 percent of Israel’s demand for crude oil.

Iranian media has also targeted Turkish president Erdoğan for not cutting trade relations with Israel, which was actively used within Turkey by Islamist circles including the leader of the Islamist New Welfare Party (YRP), Fatih Erbakan, in recent local elections. The New Welfare Party, which sympathizes with Iran, managed to get 6.1 percent of the nationwide vote—contributing to Erdoğan’s first election loss in decades. When Erdoğan’s ruling party suffered the election setback, he launched economic measures against Israel, halting trade. Iranian media propaganda and the active shaping of the narrative in the run-up to elections in Turkey yielded a significant result by creating strain in diplomatic and economic relations between Turkey and Israel. The multidimensional Iranian strategy of achieving goals in multiple theatres has so far succeeded in two places: Turkey and Yemen. Using the Houthis to disrupt maritime shipping, Iran positioned itself as a key player that can shut down trade not only in the Persian Gulf but also in the Bab al Mandab Strait.

Iran’s strategy of using economic means to achieve its goals also entails containing and weakening Azerbaijan by inflicting significant revenue losses. Not only does Azerbaijan meet nearly 40 percent of Israel’s demand for crude oil, Azerbaijan’s state energy giant SOCAR alongside British Petroleum and Israel’s NewMed were awarded a license to explore an area to the north of Israel’s Leviathan gas field in the Eastern Mediterranean. The strong bilateral and multifaceted relations between Israel and Azerbaijan have long been a primary concern for the Iranian establishment. The military-technical partnership between Israel and Azerbaijan helped Baku boost its national security and defense, as well as to retake control of its territory from occupying Armenian forces. Changes in the realities of South Caucasus politics since 2020 are a security concern for Tehran. Constant Iranian media attacks against the Baku-Tbilisi-Ceyhan oil pipeline are part of the multidimensional Iranian strategy.

Better understanding Iran’s strategy is important if the United States desires to counter those efforts. Iran’s use of hybrid warfare, proxies, media propaganda, and blackmail—to force neighboring countries to cut economic and diplomatic ties with Israel—is having some success but is not in the interest of the region. Iran’s primary goal is to derail the normalisation process under the Arab-Israeli Abraham Accords; to strain Turkish-Israeli diplomatic and economic ties; to damage Azerbaijan’s independence by targeting its primary source of revenue; to prevent the emergence of the Azerbaijan-Israel-Turkey trilateral cooperation; and to prevent further diplomatic normalisation of relations between Israel and Muslim-majority states. It is only through understanding Iranian efforts that the United States, Israel, and the larger region can prevent Iran’s success.

Rufat Ahmadzada is a graduate of City, University of London. His research area covers the South Caucasus and Iran. Views expressed in this article are the author’s own.

Iran’s Multidimensional Strategy was originally published on Global Security Review.

Two issues are at play today. First, a direct military confrontation between the United States and China appears inevitable, despite the economic entanglement that was intended to prevent it. Second, two nations that are so closely tied economically have rarely waged war, leaving such conflict’s second and third order effects unknown. Should the United States follow Reagan’s approach and challenge China’s economic rise, there may be a path to avoiding conflict. Oil may be a good place to begin such an effort because China is so highly dependent on oil imports.

President Reagan began by initiating a change in US oil price policy that commenced what National Security Council official Roger Robinson called a policy of “economic warfare” against the Soviet Union. One of Reagan’s first moves was to decontrol the price of oil. This lowered the price of oil and markedly decreased the earnings of the Soviet government, which relied heavily on oil and gas sales to generate foreign currency reserves.

A second move was to encourage the expansion of American oil and gas production over the long-term—driving down prices. In 1984, President Reagan persuaded the Kingdom of Saudi Arabia to markedly increase oil production by seven million barrels a day, again seriously reducing Moscow’s export earnings. As an importer of oil, driving prices down would help, not hurt, the Chinese economy. Thus, the United States would need to put Chinese oil imports at risk and more expensive.

China is growing its ability to project military power astride key maritime choke points which see the transit of 60 percent of global oil production—58.9 million barrels of oil per day. This includes four choke points where China is seeking a military presence. These include: the Straits of Hormuz (with the help of Iran); the Straits of Malacca (through military construction in the South China Sea); Bab el-Mandeb (with Iranian/Houthi help); and the Suez Canal.

While China fears an oil cut-off during a military conflict, it appears China is seeking to turn the tables on the United States. As part of China’s belt and roads initiative, overland routes for petroleum export are under construction, with a specific design to prevent American interference.

Given the stakes, the United States must act with urgency and circumspection as it looks for ways to economically disentangle from China—a country which clearly seeks to supplant American global influence. As the Chairman of the Committee on the Present Danger warned in a recent “Xi’s Pearl Harbor”  broadcast, many American institutions may not be up to the challenge. Employing oil as a deterrent force is no simple task.

If China were to achieve a stranglehold on oil tanker transportation, America’s NATO allies stand to suffer most. Michael Klein and Robert Zubrin point out that it is no coincidence that each recession since 1975 began with sharp spikes in oil prices.

Currently, the United States is the largest oil producer in the world despite the Biden administration’s efforts to constrain oil production. Should administration’s change or President Biden change his position on hydrocarbons, the United States could, in a time of crisis, ramp up production to counter Chinese efforts to constrain oil flows.

There is real value in the United States securing the sea-lanes and thwarting Chinese plans to build overseas bases at key the key geographic points mentioned above. One of China’s weaknesses is that it uses economics in a purely coercive way that seem attractive at first, but always carry heavy burden on the back end. States participating in the Belt and Road Initiative are now coming to regret their decision. Buyer’s regret is a key tool the United States can use to thwart Chinese expansionist efforts.

Maintaining a sufficiently sized and capable US Navy that can patrol sea lanes remains a core capability and coercive tool of American diplomacy. The sight of American warships in foreign ports, rather than Chinese warships, speaks volumes to those countries considering which superpower to support. This is proving particularly true in the Middle East as oil rich nations are reconsidering their cooperation with the United States.

In a future strategic environment where China attempts to use oil as a coercive tool, the United States must be prepared to push back or prevent such a set of circumstances from ever materializing. The time is now for American policymakers to contemplate the role oil can play in economic warfare with China. Xi Jinping is certainly thinking about it.

Peter Huessy is a senior fellow at the National Institute for Deterrence Studies.  Views expressed in this article are the author’s own. 

Economic Deterrence: Chinese Style was originally published on Global Security Review.