The Trump administration faces criticism for temporarily lifting sanctions on Iranian oil. Critics argue Washington has given Tehran a substantial economic advantage. Some even suggest retroactively amending the waiver by channeling Iranian oil revenues into escrow accounts, a proposal Iran would reject.
The goal of diplomacy is achieving realistic outcomes. The agreement with Iran is not ideal from the U.S. perspective. It includes concessions many Americans dislike, such as lifting oil sanctions.
The key question is whether the benefits to Iran justify risking the agreement’s collapse, which helped partially restore traffic through the Strait of Hormuz. The answer is no. Much of the backlash is based on the incorrect belief that Iran gains unprecedented oil revenues with the waiver. However, Iran has been selling oil, notably to China, despite sanctions. The waiver’s primary effect is enhanced revenue from ongoing sales, with estimates suggesting only an additional $1.5 billion in revenue for Iran over 60 days.
Although more than a billion dollars is substantial, foreign policy does not exist in a vacuum. Policymakers must weigh costs and benefits, not focus solely on dislikes. Even if the U.S. imposed escrow requirements, it assumes Iran’s acceptance, which was unrealistic.
Critics wrongly compare the current agreement with an impossible one. The choice was between an acceptable agreement and none. If the U.S. revises terms, Iran has alternatives, like closing the Strait of Hormuz. Reopening the strait was vital for stability in global energy markets, and concessions were necessary.
A successful diplomatic outcome was never about dictating every condition to Iran. Politically unpalatable, it served a greater purpose than merely a slight increase in Iranian oil revenues. Attempts to renegotiate could endanger vital achievements. The real challenge was choosing between an imperfect deal and no deal. This understanding of diplomacy is vital for future negotiations.
Brett Erickson is managing principal of Obsidian Risk Advisors and an advisory board member at the Seton Hall School of Diplomacy and International Relations and DePaul University Driehaus College of Business.
