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Closing Iran's oil spigot: Robert Haddick explains why there is one last chance for a peaceful resolution to Iran's nuclear ambitions.

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What happens next in the standoff with Iran over its nuclear program will depend upon decisions taken by statesmen in Brussels and Beijing. If the European Union and the Chinese government were to follow the United States and enforce a ban on investment in Iran's oil sector, it could provide the leverage the United Nations Security Council has thus far lacked in its dealings with the Iranian government. With crude oil selling at record high prices, it may be the worst possible time to squeeze Iran's future oil production. But an international investment ban may also be the last best chance to achieve a peaceful outcome to the Iranian nuclear issue.

Since the world first learned in 2003 about Iran's previously covert nuclear program, the United States and the European Union have attempted to organize an international diplomatic effort to rein in the project. After five years of steadily increasing efforts by the West, the results have been dismal. Iran continues to reject all entreaties to suspend its enrichment of uranium and is instead expanding its enrichment program. The U.N. Security Council has passed four resolutions requiring Iran to halt uranium enrichment, without any effect on the Iranian program. Neither the Security Council nor the West has employed sufficiently powerful leverage against Iran, leverage that would change Iranian behavior.

The Iranian government is highly dependent on the revenue it receives from crude oil exports. Income from Iran's oil exports constitutes 85 percent of the Iranian government's revenue. Yet Iran could face a financial crisis early next decade due to a possible drying up of its oil export income. The United States, Europe, and others concerned about Iran's nuclear ambitions could achieve the leverage over Iran that they have thus far lacked if they implemented policies that helped strangle Iran's oil income. Without its oil income, Iran's government would be hard pressed to maintain social order....

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