David Rivkin, Constitutional Attorney and Media Commentator

Now is the time to hit the Iranian regime with lower oil prices

For the sake of the Iranian people and global stability, we need to lead the effort in suppressing oil prices beyond what Tehran can bear.

By David B. Rivkin Jr. and Nawaf E. Obaid, January 7 2018 in USA Today

Mass protests are gripping Iran as its people express their discontent with crippling poverty, governmental corruption, and Tehran’s highly expensive sponsorship of terrorist proxies around the Middle East. The protests are geographically widespread, rural and urban, and challenge the very sinews of Iran’s mullahcracy. The United States can and should support Iranian freedom by pressuring the regime at its most vulnerable point, oil revenues. This strategy should have long- and short-term components, both designed to decrease global oil prices.

Iran’s dire economic situation is at the heart of this discontent. As President Rouhani acknowledged, the government cannot meet payroll and is seeking to increase revenue and decrease expenditures. Since 80% of Iran’s budget comes from petroleum exports, the quickest and surest way to bring about regime change in Tehran is a broad campaign to reduce current global oil prices.

In order for Tehran to balance its budget, oil prices need to be around $130 per barrel, over twice what they are today. Several factors — including government-promised subsidies to wheat farmers and debt payment obligations that are headed toward default — are pushing Iran to the financial breaking point. Add to this the rising costs of Tehran’s military establishment, and the mullahs’ expanding commitment to fomenting chaos around the Arab world, and you have a recipe for financial meltdown. The doomsday scenario could only be avoided by a major rise in oil prices that would allow Iran, with 10% of proven global reserves, to rescue itself.

For the sake of the Iranian people and global stability, this cannot be allowed to happen. Washington should lead the effort. Tehran is a major American foe and a successful anti-mullahcracy effort would both improve Middle East security and enhance US global credibility.

There are four ways to suppress further the current low global oil prices. First, the ad hoc understanding between Saudi Arabia and Russia, the world’s first and second largest oil exporters respectively, to curtail oil output would need to be suspended. This would enable the Saudis, who have the highest spare capacity of any nation, to increase exports, driving down prices. Moscow would hate losing its key Middle Eastern ally and wouldn’t countenance such a suspension, but it cannot stop the Saudis, for whom Iran is also a major adversary.

Second, the United States should continue with its long-term efforts to increase both the U.S. oil output — which it has already done by just announcing a major expansion of offshore oil drilling — and increasing U.S. capacity to export oil and petroleum products by building additional pipelines and terminal facilities. While these efforts would exert some downward pressure on prices, they would need to be supplemented by the short-term measures, that are capable of having an immediate pricing impact. The key such measure would be an agreement between the United States and a Saudi-led coalition (along with UAE and Kuwait) to increase output, bringing the price down by at least $10 per barrel. Further, because Tehran suffers from a lack of indigenous capital and technology to increase sustained production capacity and hence oil exports, this same coalition should convince the few oil companies willing to invest in Iran’s upstream industry to put their efforts on hold.

Finally, because Tehran lacks access to foreign financial markets and American banks view investing in Iran as too risky, its only hope is in European, and to a much lesser extent Asian, banks. The Trump administration should send a strong message to European and Asian banks that their access to U.S. capital markets will be endangered, if they float credits to Tehran in any form.

One might ask why Saudi Arabia, a nation that also depends heavily on oil revenues, would support a lower price. The answer is simple cost-benefit analysis. Blocking Iran’s drive for regional hegemony is the kingdom’s highest foreign policy priority. The Saudis are spending tens of billions of dollars attempting to stabilize nations such as Lebanon, Bahrain and Palestine and fighting wars in Yemen and Syria against Iranian destabilization efforts. Not only are the Saudis eager to shrink these expenditures, but with about $500 billion in foreign reserves and one of the cheapest oil extraction costs in the world, they can withstand lower petroleum prices for years if necessary. In short, the regime change that low oil prices would bring in Iran represents a vital foreign policy boon and overall financial savings over the mid to long-term for the kingdom.

Tehran simply cannot survive a sustained $50 per barrel price. All those wishing to bring an end to the decades of widespread terror caused by this so-called Islamic Republic, and support the Iranian people in their own demands for change, should commit to the above-mentioned measures. Only the oil weapon can end this repressive regime.

David B. Rivkin Jr. served in the Departments of Justice and Energy and the White House Counsel’s Office during the Reagan and George H. W. Bush administrations.  Nawaf E. Obaid, a visiting fellow for intelligence & defence projects at Harvard’s Belfer Center, is a former advisor to the Saudi government.

Source: https://www.usatoday.com/story/opinion/2018/01/07/wielding-oil-weapon-against-iran-best-way-end-its-oppressive-regime-david-rivkin-nawaf-obaid-column/1005225001/

January 8, 2018
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The Lawless Underpinnings of the Iran Nuclear Deal

By DAVID B. RIVKIN JR. and LEE A. CASEY

The Iranian nuclear agreement announced on July 14 is unconstitutional, violates international law and features commitments that President Obama could not lawfully make. However, because of the way the deal was pushed through, the states may be able to derail it by enacting their own Iran sanctions legislation.

President Obama executed the nuclear deal as an executive agreement, not as a treaty. While presidents have used executive agreements to arrange less-important or temporary matters, significant international obligations have always been established through treaties, which require Senate consent by a two-thirds majority.

The Constitution’s division of the treaty-making power between the president and Senate ensured that all major U.S. international undertakings enjoyed broad domestic support. It also enabled the states to make their voices heard through senators when considering treaties—which are constitutionally the “supreme law of the land” and pre-empt state laws.

The Obama administration had help in its end-run around the Constitution. Instead of insisting on compliance with the Senate’s treaty-making prerogatives, Congress enacted the Iran Nuclear Agreement Act of 2015. Known as Corker-Cardin, it surrenders on the constitutional requirement that the president obtain a Senate supermajority to go forward with a major international agreement. Instead, the act effectively requires a veto-proof majority in both houses of Congress to block elements of the Iran deal related to U.S. sanctions relief. The act doesn’t require congressional approval for the agreement as a whole.

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July 27, 2015
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Taking the Iran Deal Disaster Seriously

By David B. Rivkin, Jr., and Lee A. Casey; July 21, 2015, in The National Interest

The best approach to Iran in the wake of President Obama’s deal is to recognize the complex nature of the problem, and the absolute need for a well-considered and comprehensive approach. The agreement cannot and should not be simply repudiated on the next president’s first day in office, as some Republican presidential contenders have suggested. The agreement is terrible, but once concluded, the national interest requires that it be undone only with care, patience, and masterful diplomacy—an approach championed by Gov. Jeb Bush and Senator Lindsey Graham. Indeed, to suggest otherwise, is to fail to appreciate the full extent of the damage done by the deal and the difficult foreign-policy legacy President Obama is leaving for his successor.

First and foremost, simply abrogating the deal—which already has been enshrined in a Chapter VII UN Security Council Resolution binding on the United States and all members of the United Nations—would actually put the United States in violation of its international obligations and will hand tremendous strategic benefits to Tehran. This may be inevitable, since Russia and China will certainly take advantage of any American action against Iran to score diplomatic and strategic points against us. But, we do not have to make it easy for them, and we should not.

In addition, whatever action the new president takes on January 20, 2017, Iran will remain free of the vast majority of the sanctions that brought it to the bargaining table in the first place. While the next president will be able to vitiate promptly President Obama’s waivers of the existing statutory sanctions—some of which are certain to go beyond his lawful waiver authority—thereby making the existing domestic statutory sanctions available, it would still make sense to consult with Congress on whether the sanctions regime needs adjustment in light of new circumstances.

Although President Obama has ignored Congress, or affirmatively sought to curtail its constitutional prerogatives, the next President should work with Congress and must seek to build a bipartisan consensus on how to meet the Iranian challenge. As Supreme Court Justice Robert Jackson wrote in the landmark case of Youngstown Sheet & Tube Co. v. Sawyer (1952), a president acts at the height of his constitutional authority when working with, rather than against, Congress.

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July 21, 2015
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Another Obama Collision With the Constitution

By MICHAEL B. MUKASEY and DAVID B. RIVKIN JR, February 19, 2015

President Obama last week sent to Congress a draft resolution regarding an authorization for use of military force, or AUMF, against the terrorist group Islamic State. Although presidents have constitutional power to defend American national-security interests, seeking an AUMF is both constitutional and sound. The measure enables Congress to show its support for military efforts and encourages public approval of them. From the nation’s founding, dozens of AUMFs have been enacted. The 2001 resolution authorizing war against al Qaeda and its affiliates and the 2002 authorization of the Iraq war are only the most recent.

AUMFs also have legal significance. They buttress the president’s powers and, consistent with Supreme Court precedent, provide legal support when such aspects of war-fighting as electronic surveillance, detention of enemy combatants and use of deadly force against American nationals who have joined the enemy are challenged in court.

One can argue whether Congress’s constitutional power to declare war serves principally to distinguish formally among enemies, friends and neutrals, or has broader effect. However, AUMFs have become particularly important in the aftermath of the 9/11 terror attacks, as federal courts have involved themselves to an unprecedented degree in scrutinizing such activities. The relevant judicial decisions often cite the existence of an AUMF.

Despite the benefits of traditional AUMFs, President Obama’s proposal is fundamentally flawed. Attempting to obtain political cover for his strategy to fight Islamic State, also known as ISIS or ISIL, he has asked Congress to ban “enduring offensive ground operations” and to terminate the authorization after three years.

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February 20, 2015
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How Congress Can Use Its Leverage on Iran

By DAVID B. RIVKIN JR. And LEE A. CASEY, Jan. 20, 2015

Nuclear talks between Iran and the U.S. recommenced Jan. 14, ahead of full international talks with senior officials from the U.S., U.K., France, Russia, China and Germany two days later. A final agreement is to be reached no later than June 30. Nothing less than Middle Eastern and global security hangs in the balance.

That security depends on verifiable elimination of Iran’s nuclear-weapons and ballistic-missile programs. Unfortunately, the Obama administration is likely to accept a deal leaving in place a substantial Iranian nuclear-weapons infrastructure, including uranium-enrichment capability, long-range ballistic missiles and the ability to deploy a rudimentary nuclear force on short notice. A course correction that only Congress can effect is urgently needed.

It is difficult for Congress to stop a president determined to sign an agreement with foreign leaders. And as this newspaper pointed out in a recent editorial, President Obama has threatened to veto any legislation to impose further sanctions on Iran if the June 30 deadline is not met. Still, Tehran’s insistence that existing U.S. sanctions be lifted as part of a nuclear-weapons agreement gives U.S. lawmakers substantial leverage. The collapse of oil prices, which dealt a heavy blow to the already weakened Iranian economy, has further increased this leverage. Here is what Congress should do:

First, Congress should insist that any Iranian agreement take the form of a treaty. The Constitution requires that treaties be made only with the advice and consent of the Senate. At the time it was adopted, and throughout most of U.S. history, agreements fundamentally ordering the relationship between the U.S. and foreign nations took the form of treaties, not executive orders. A mere executive agreement, which Mr. Obama may use to evade congressional constraints here, would be constitutionally insufficient. Read more »

January 22, 2015
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Let the President Decide on Jerusalem

By DAVID B. RIVKIN JR. and LEE A. CASEY

Since the 1990s, Congress has maintained that Jerusalem should be recognized as Israel’s capital. Since Israel’s founding in 1948, presidents have stated that Jerusalem’s status can only be decided as part of a broader peace settlement. On Monday this dispute again reached the Supreme Court, and it offers the justices a unique opportunity to elucidate the proper way to resolve separation-of-power disputes between Congress and the executive.

Zivotofsky v. Kerry involves Menachem Zivotofsky, a 12-year-old Jerusalem-born American citizen. His parents want Israel identified as his birthplace on his passport. Section 214(d) of the Foreign Relations Authorization Act, Fiscal Year 2003, permits this choice, but the secretary of state refused to comply, listing Jerusalem alone as his place of birth. The secretary argues that the law violates established U.S. foreign policy and interferes with the president’s exclusive power to recognize foreign states and their territorial extent.

In the first round of this litigation, the U.S. Court of Appeals for the District of Columbia concluded that this contest presented a political question that the courts could not answer. The Supreme Court reversed that decision, explaining that however “political” the circumstances, the question was a straightforward one of constitutional law suitable for judicial resolution.

The D.C. Circuit reheard the case last year and concluded that section 214(d) is unconstitutional because the president has the exclusive authority to determine the territorial boundaries of foreign states, their capitals and their governments—at least for purposes of U.S. diplomatic intercourse.

This authority is based in clear constitutional text that gives the president the power “to receive Ambassadors and other public Ministers.” Although the court found this language ambiguous (relying instead on historical practice and Supreme Court statements that the president alone has the power to recognize a foreign state as sovereign), the framers used this language precisely and to a purpose.

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November 7, 2014
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