This past two weeks, the full wrath of Europe and the US has settled on Iran in what US Secretary of State Hillary Clinton warned at the beginning of the Obama administration would be "crippling sanctions". Among the impacts: Oil exports have fallen more than 1.3 million barrels per day (bpd); close to $10bn in annual trade with the UAE, a key source for Iranian imports, is drying up; the Iranian rial is plummeting; inflation has ballooned to 30 per cent; and annual revenue is projected to drop by more than 50 per cent to $50bn.
Iran is becoming effectively isolated, its oil export stream squeezed off, its access to international financial networks and markets denied, and many of its companies and officials blacklisted.
The sanctions are designed to force Iran to halt its nuclear programme. The West accuses Iran of using its programme to build a bomb. Iran claims it is only for energy and medical use.
Iran has officially responded in three ways:
1. It has threatened to use its enriched uranium to fuel a submarine and to convert its Navy to nuclear power (which would require 92 per cent purity), an example of its uncanny ability to cross red lines before the West even realises there is a red line to be crossed.
2. It has released a position paper outlining its views and goals, and calling for three-monthly talks, an acknowledgement that promises on either side must wait until the upcoming presidential elections.
3. It has embarked on what the media is calling a "charm offensive". Its UN Ambassador has offered assurances it will not ratchet up conflict, a signal it won't immediately close the Strait of Hormuz - though, as sanctions reduce its flows of oil export and goods import, its own cost for doing so drops.
Iran's mild response to the draconian sanctions regime fits what Hossein Mousavian, research scholar at Princeton University and former Iranian nuclear negotiator, calls Iran's post-revolutionary character. Revolutionary idealism, he says, explains Iran's failure to adopt typical realpolitik approaches to threats from other states, such as its failure to respond in kind to Iraqi President Saddam Hussein's use of chemical weapons in the Iran-Iraq War.
It could also be why the West can still offer no hard evidence - despite the plethora of satellite reconnaissance and intelligence collection gathered over a decade of military presence on both sides of Iran's border - that Iran is developing a nuclear weapon - perhaps it simply doesn’t have one, even though it may be gaining the capacity to do so.
Negotiations to resolve the seemingly intractable nuclear issue are celebrating their tenth anniversary. Since 2006, when the US became engaged in the talks, they have made no discernible progress.
One of the reasons for this failure is that the nuclear issue is only one of a host of accumulated issues that divide Iran and the US. Locked in a bilateral relationship of suspicion - and almost paranoia - their enmity dates back to the revolution 33 years ago, which replaced the Shah - a strong US ally - with Islamic clerical rule.
From the first days of the new regime, the US took a dim view of the clerics' administration and never officially recognised it. The most acrimonious standoff in the history of modern state politics was triggered by Washington accepting the Shah into the US for medical reasons in 1979, without requiring him or his family first to renounce the throne, or informing the Iranian government of the move. From an Iranian perspective, the seizing of the US embassy in Tehran months later was aimed to protect the revolution against a CIA coup reinstating the Shah. After all, the 1953 coup - in which covert US and British agencies replaced the democratically elected Mohammad Mossadeq, who had nationalised oil resources, with the Shah as an absolute monarch - was hatched in that same embassy basement.
Cultural missteps on both sides led to the first protracted stand-off between the US and Iran, known today as the Hostage Crisis. It was an event unique in US history. It made the US feel helpless on the international stage, and stole its idealistic self-image as a country beloved for its democratic ideals. For the first time, the US heard rhetoric condemning it as imperialist and supporting a criminal dictator; it has never forgiven Iran for its sense of humiliation.
Meanwhile Iran was "bruising" for a fight and ready to take on the world with a new Islamic political doctrine, and offer a third way: "Neither East nor West". The battle it took on has proven to be an extraordinary example of what it really means to combat a unipolar power.
30 years of sanctions
Iran has been under US sanctions for 30 out of 33 years since. The US has never established diplomatic relations with Iran (yet even at the nadir of the Cold War, it had an embassy in Moscow). Following the US lead, the UN failed to denounce Iraq for invading Iran in 1980, and delayed for years condemning Saddam for using chemical weapons.
Abandoned by the UN during the Iran-Iraq war, Iran felt it could rely only on itself, a lesson it has never forgotten - and which has had significant repercussions for the nuclear issue. Iran has also been the target of the first officially acknowledged use of cyber-warfare, Stuxnet.
It was under President Bill Clinton in 2002 that the nuclear issue emerged, thanks to information provided by US-branded "terrorist" group Mujahedin e-Khalq (MEK), which killed six Americans during the Shah's era. Killing numerous clerical leaders after the Iranian revolution, it also landed on the Islamic Republic's terrorist list. From its camp just over the Iranian border in Iraq, the MEK produced information that Iran's nuclear energy programme was weaponising.
It is the only hard evidence ever produced that Iran had a weaponisation programme, which, according to subsequent assessments by the US National Intelligence Estimate (NIE), ended in 2003. In the most recent NIE, in paragraphs purged from the publicly available document, it was revealed that the weapon was being developed to target Iraq, not Israel. When the US invaded Iraq in 2003 and toppled Saddam Hussein, the Iranians shut down the programme. Iran maintains it did not reveal the information itself because it feared attack by Israel, which had already hit WMD installations in Iraq and Syria. Its reticence can also be understood in light of its mistrust of international institutions, and its perpetual labelling as a rogue, being painted on the "Axis of Evil", despite cooperating with post-9/11 Western efforts to contain al-Qaeda and the Taliban.
In this atmosphere, and surrounded by nuclear capable agents and states (the US in Afghanistan and the Gulf, Pakistan and India further east, Russia to the north, and Israel to the west of Saddam's Iraq), President Muhammad Khatami reached out to President George W Bush, indicating Iran was willing to put everything on the table and negotiate a "Grand Bargain", including Iran's support for Hezbollah and Hamas, its human rights record, and critically, its nuclear programme. The White House reportedly never responded.
Indeed, the West, and the US in particular has mothballed engagement of any kind with Iran, defying the classic practice of building trust and communication on less sensitive issues first. Three areas stand out: 1) Afghanistan, where the US and Iran share interests in preserving a stable, anti-Taliban government in Kabul, and where Iran could offer NATO alternative supply routes to those from Pakistan; 2) Afghan heroin export control, currently costing Iran millions in blood and treasure, and which, without its constraint, could flood Europe with heroin; and 3) Syria, where if Western states were genuinely committed to peace they would welcome engagement by all significant regional powers, and not paint Iran with a different brush than Russia for its support of Assad. That Iran is shut out suggests that anti-Iranian policy trumps any peace plan - no matter what the cost in Syrian blood.
The view from Iran
How do we understand the strategies of a highly ideological, authoritarian regime, at risk of imposed regime-change by powers acting on evidence that does not exist?
Iran's first strategic goal is to be recognised as having the sovereign and legitimate right, as a signatory to the Nuclear Non-proliferation Treaty (NPT), to develop enriched uranium for peaceful purposes. The West views such rights as bearing responsibilities, which it interprets as meaning Iran must suspend all enrichment while addressing Western concerns - a scenario which gives Iran no guarantees it won't be left in infinite suspension. Iran's view is rights come first, but that even without enjoying full recognition of its rights, it is fulfilling its responsibilities, such as accepting ongoing International Atomic Energy Association (IAEA) inspections. Iran takes this very seriously. Supreme Leader Ali Khamenei has stated he would resign if Iran cannot exercise its legitimate rights to enrich.
Meanwhile, the West, finding no smoking gun, has quietly shifted focus to defend against Iran's intention to build a bomb, presuming it desires to do so as an imperative of realpolitik.
Iran cannot prove a negative, namely that it has no intention to build a bomb. Fatwas have been passed, and much ink spilled supporting the claim. But Iran has not been believed. Iran's offers to do swaps or, most recently, its offer to halt its 20 per cent enrichment and export its stockpile for sanctions relief, have consistently been spurned by the West as too little too late or simply a ploy to buy time. When the US rejected a Russian step-by-step plan to break the deadlock in 2011, which Iran had accepted, President Vladimir Putin publicly stated that it was clear the West's real design was not resolution but regime change.
Iran's second major strategy is to get sanctions lifted and its nuclear file removed from the UN Security Council. After ten years, it has a stockpile of 20 per cent enriched uranium it wants to exchange for graduated sanctions relief. It has offered to open its facilities to full transparency if its right to enrich to five per cent is recognised.
The fact is that the sanctions have not delivered the results expected. As the sanctions regime has grown, so have Iran's reported nuclear capabilities. What began ten years ago as three per cent enrichment through a few hundred centrifuges has ballooned to 20 per cent enrichment and thousands of centrifuges. Additionally, if the NIE is to be believed, Iran's decision to abandon a weapons programme had nothing to do with sanctions, but instead was determined by the fall of Saddam Hussein. Indeed, the West has illustrated that, short of war, its tactics - sanctions, isolation, condemnation, and "red lines" - have had minimal impact on the choices made by Iran's current administration.
Iran's third strategic goal is to be recognised as an important regional power. From the outset of the West's containment and subsequent isolation of Iran, it has adopted an eastern-facing strategy to secure support, trade, and influence, and to carve out a position as a regional hegemon. The pride in the scientific achievement represented by the nuclear programme is intimately tied to that strategy - and explains why it is supported by hardliners and opposition forces alike.
Iran's fourth strategy is to stolidly grow the atomic industry, but so slowly that it has crossed several red lines without triggering a shoot-out with the West. In effect, the West has grown acclimated to an industry that has gained the trappings of inexorability. In contrast, Iran’s main tool of aggression - other than funding its favoured militias - is language, manipulated to move the spotlight where it wants it. Sophisticated in its ability to use rhetoric to bully, threaten, feint and withdraw, Iran uses words to fight and manipulate its enemies, a tool against which the realist West (and Israel) are often lead-footed.
If regime change, rather than a nuclear agreement, is the ultimate Western goal, the Iranian regime's top priority is survival. It remains close to Washington's old nemeses, Iraq and Afghanistan, as they are all three in a sense victim of US wars, and Iran will want to draw the other two in should it be a victim of another round. However, as it has no WMD deterrent, its first order of business is to convince the US and Israel that it does not want war. The game-changer is if either attacks. Iran will claim innocence, and that it never intended to build a bomb. But as of right now, it must do so to protect its sovereignty.
Roxane Farmanfarmaian is a Senior Research Fellow at the Global Policy Institute, an Affiliated Lecturer for the International Relations of the Modern Middle East at the University of Cambridge, and a Visiting Scholar at the Middle East Center at the University of Utah.
A version of this article was first published as a research paper by the Al Jazeera Center for Studies
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.