Tensions between Iran and the United States over oil shipments through the Strait of Hormuz rose Thursday, with Iran saying that if it is blocked from shipping oil through the strait it will block all others from doing so too, and the U.S. responding that the U.S. Navy stands ready to ensure free navigation and the flow of commerce through the strategic waterway.
The European Union has proposed a plan for salvaging the 2015 international nuclear deal with Iran in the wake of the U.S. pullout in May and the reimposition of U.S. sanctions on Iran.
But Iranian President Hassan Rouhani said on Thursday that the package does not go far enough.
Rouhani and some senior military commanders have threatened in recent days to disrupt oil shipments from Persian Gulf countries if the U.S. tries to strangle Iranian exports.
Foreign ministers from the U.K., China, France, Germany and Russia met with the Iranian foreign minister in Vienna this week for the first time since the U.S. left the pact, but diplomats see limited scope for salvaging it.
"The objective is to save the deal," a senior European diplomat said. "We've made some progress, including on safeguarding some crude sales, but it's unlikely to meet Iranian expectations. It's also not just about what the Europeans can do, but also how the Chinese, Russians, Indians, others can contribute."
The pillars of the EU strategy are European Investment Bank lending, a special measure to shield EU companies from U.S. secondary sanctions, and a European Commission proposal that EU governments make direct money transfers to Iran's central bank to avoid U.S. penalties.
"The Iranians expect the others to say what we are going to do to keep the deal alive. We will have to see if it is going to be good enough for them," an EU source said.
According to Iranian state media and his own website, Rouhani spoke with French President Emmanuel Macron and German Chancellor Angela Merkel by phone, and told them he was disappointed with their package, which did not go far enough.
Rouhani has warned that Iran could reduce its cooperation with the U.N. nuclear watchdog, the International Atomic Energy Agency, and has threatened U.S. President Donald Trump of the "consequences" of fresh sanctions against Iranian oil sales.
The parties were expected to meet again on Friday for what Iranian officials described as an "important" meeting. The officials said that the key for them is to ensure measures that guarantee that oil exports can continue and that Iran will still have access to the SWIFT international bank payments messaging system.
"SWIFT is the key, but Iran has to stay in [the nuclear deal] at least until the end of the year to maintain divisions between the EU and U.S., keep some credibility and try and survive amidst forthcoming sanctions," said Sanam Vakil, an associate fellow at the London-based think tank Chatham House.
While talks are expected to focus on the nuclear deal, they come amid increasing rhetoric from the Trump administration, which says Iran poses a serious security threat.
An Iranian diplomat based in Austria was among four people arrested on suspicion of plotting an attack on an Iranian opposition group in France last week.
The issue could be a distraction in the Vienna talks.
Iran has said it had nothing to do with the plot and has demanded the official be released without delay.
But any confirmation that Iranian authorities were behind the plot could make it politically difficult for European leaders to continue to back the nuclear deal.
Maj. Gen. Mohammad Ali Jafari, commander of the Revolutionary Guard Corps, said Thursday that if Iran cannot sell its oil due to U.S. pressure, then no other Gulf country will be allowed to do so either.
"We are hopeful that this plan expressed by our president will be implemented if needed," he said. "We will make the enemy understand that either all can use the Strait of Hormuz or no one."
In response, U.S. Central Command spokesman Navy Captain Bill Urban said, "The U.S. and its partners provide and promote security and stability in the region."
Asked what would be the U.S. naval reaction if Iran blocks the strait, he said, "Together, we stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows."
The Revolutionary Guards' naval arm lacks a strong conventional fleet. However, it has many speedboats and portable anti-ship missile launchers and can lay mines.
A senior U.S. military leader said in 2012 that the Guards have the ability to block the strait "for a period of time," but the U.S. would take action to reopen it in such an event.
