Iran Watch: The bratwurst effect

Iranian President Mahmoud Ahmadinejad is making headlines for declaring over the weekend that Tehran does not fear Western military action. “You say to Iran all options are on the table,” he noted. “Leave them there until they rot.” It’s the most creative reinterpretation of the “all options are on the table” diplomatic speak since Mitt Romney’s line about military options being “not just on the table” but “in our hand.” Frankly, the metaphor is starting to spiral out of control.

But the behind-the-scenes storyline today involves fresh information about the effectiveness of the sanctions arrayed against Iran. Saudi Arabia announced that it will (reluctantly) fill any gap in world oil markets created by the sanctions regime, while Western powers are criticizing countries such as India, Pakistan, and Turkey for continuing to engage commercially with Iran. AFP has a good summary of India’s predicament, as a major Indian trade delegation visits Tehran:

The mission sees India walking a diplomatic tightrope as it seeks more business from Iran while managing a growing partnership with the United States and maintaining good relations with Israel, a key arms supplier….

Iran is India’s second-largest oil supplier after Saudi Arabia, and while India has diversified to cut its dependence on the country in recent years, New Delhi says replacement of “all Iranian oil imports” is not “a realistic option.”

But the most bizarre report on the consequences of sanctions against Iran comes courtesy of USA Today, which serves up a report from Germany on the rising price of bratwurst, which is made with sheep intestines imported from Iran:

Some suggest Iran is intentionally punishing Germany with the shortage. Rainer Heimler, president of the Society for the Protection of Nuremberg Bratwurst, which defends the good name of the sausage from the low-quality imitations, said he doubts the connection between politics and bratwurst inflation.

“I cannot imagine that as revenge on Europe, Iran might refuse to deliver intestines to prevent the Germans from eating bratwurst,” Heimler said.

The larger point in the bratwurst article is that sanctions are stoking destabilizing inflation in Iran. The Financial Times points out that a declining Iranian rial has dealt a substanial blow to Iranian consumer demand. “Iran, struggling to do business in dollars, now advocates a mix of barter deals and non-dollar transactions,” the paper adds.

Iran meter: So, could sanctions-induced economic instablity in Iran sink the Iranian regime without the need for a military confrontation, as the Washington Post‘s David Ignatius suggested on Friday? We probably can’t conclude that yet. Iran, after all, still has trading partners, and there are few concrete signs that a regime implosion is imminent. As the Wall Street Journal reported from Tehran over the weekend, Iranians may be struggling with economic hardship, but few “see themselves taking to the streets, even if things get much worse. ‘We have to keep going,’ says one merchant in a neighborhood shopping district. ‘People here are boiling, but don’t make a sound.'”

In the meantime, keep your eye on the price of bratwurst.