Iraq is the focal point of a strategic competition between Iran and the United States. Ever since U.S. forces invaded Iraq in 2003, Iran has relentlessly sought to impose its will on the country and expand its power in the region. Although not entirely successful, it has gained strategic depth in Iraq and has been able to use the support it garners from Iraqi Shias and Kurds to disrupt those U.S. operations that run counter to its agenda. And when U.S. and Iranian interests overlap, the Islamic Republic has been able to support the United States in ways that enhance its own power. The apparent contradiction in Iran's activities makes Iran what I call a "spoiler power" in Iraq; it is insufficiently powerful to impose its own agenda on Iraq but influential enough to disrupt U.S. operations through asymmetrical means. Over time, Iran's behavior as a spoiler power has also undermined the United States' ability to contain it.
The Bush administration's thunderous march to Baghdad in 2003 shocked and awed all the way to Tehran. Feeling encircled by the U.S. troops operating across its eastern border in Afghanistan and then across its western border in Iraq, the Islamic Republic feared that it would be the next target. Yet by removing Saddam Hussein -- the person who had inflicted more destruction on Iran than anyone else in centuries -- the U.S. invasion also handed Tehran a priceless strategic gift: the opportunity to promote a friendly Shiite government in Saddam's stead. The Islamic Republic decided to respond to the situation with a three-pronged strategy: it sought to empower Shias in Iraq, make the occupation of Iraq as difficult and costly for the United States as possible without directly confronting U.S. troops, and develop a retaliatory capability inside Iraq to deter the United States from attacking Iran.
When the United States dissolved the Iraqi army soon after its invasion, moreover, it opened the door for Shias, including those who supported Iran, to join the reconstituted security forces. It also allowed the Iranian security forces to establish their network inside Iraq. On top of that, Iran was already the most important backer of the two largest Shiite organizations in Iraq: the Dawa and the Supreme Council for Islamic Revolution in Iraq (SCIRI), a party that boasted a corresponding militia with some 15,000 Revolutionary Guard-trained fighters. It also shared excellent relations with the two main Kurdish political parties and Iraq's Shiite clerical establishment. All of this ensured Iran's influence within the new Iraq.
In the early phase of the occupation, then Iranian President Muhammad Khatami apparently expressed willingness to cooperate with the United States in Iraq, just as the two countries had worked together in Afghanistan to dismantle the Taliban. Washington declined the offer, and Iran responded in kind. It demanded the withdrawal of U.S. troops; questioned the legitimacy of the U.S.-backed transitional government, the Coalition Provisional Authority; and called for the formation of an indigenous Iraqi government. Just as U.S. President George W. Bush was calling for democracy in Iraq, the Islamic Republic pushed aggressively for national elections there. Tehran's ayatollahs recognized that, if held, elections would surely bring Iraq's Shia majority to power.
Iranian leaders were not fully confident, however, in the reliability of their partners, SCIRI and the Dawa, both of which were cooperating with the United States, or in their ability to govern Iraq. So they hedged their bets by supporting other Shiite groups -- especially the Mahdi Army, led by Muqtada al-Sadr, an Iraqi cleric who was critical of Iran but ready to fight U.S. troops. Tehran saw the young cleric as a useful idiot who sometimes needed to be restrained. In mid-2004, for example, Washington voiced concerns that confrontations between U.S. troops and the Mahdi Army in southern Iraq could delay elections scheduled for 2005. Tehran promptly sent a delegation to pressure Sadr to end the uprising. Eventually, by the end of August 2004, Iraq's Grand Ayatollah Ali al-Sistani brokered a cease-fire. The elections were held as scheduled, and a coalition of the Shiite-dominated United Iraqi Alliance and the two main Kurdish parties -- all of which were on friendly terms with Iran -- won control.
This was a major victory for Iran, but the situation soon spun out of control. Iraq quickly descended into a bloody sectarian war, which culminated in al Qaeda's 2006 destruction of al-Askari mosque, a holy Shiite shrine. Although AQI sought to provoke war between Shias and Sunnis throughout the Islamic world, the violence largely did not spread outside of Iraq. Fearing that a sectarian war would complicate the rise of Shias to power, Iran and Sistani called for Shias to resist retaliating against Sunnis. In conjunction with the U.S. military surge, which began shortly thereafter, the efforts started to stabilize Iraq.
Although Iran joined discussions with the United States in Baghdad in 2007 to talk about the security situation in Iraq some Iraqi officials and the U.S. military have consistently accused Iran of providing weapons and financial support -- an estimated $3 million per month in 2009 -- to the Mahdi Army and other Shiite militias. The United States also believes that the Quds Force, the faction of Iran's Revolutionary Guard responsible for extraterritorial operations, has worked with the Lebanese Shiite Hezbollah to train Shiite Iraqi militants inside Iran and provided them with explosively forced projectiles, the armor-penetrating explosives responsible for 200 U.S. soldier deaths in Iraq since 2003. Of course, Iran has dismissed these allegations. But that defies credibility. Indeed, such support is quite consistent with Iran's strategy; it wants Iraq to be a stable Shiite neighbor but also wants to have retaliatory capabilities against the United States and make the U.S. occupation difficult to bear.
By 2008, Iran's most important strategic objective in Iraq, the formation of a friendly Shiite-dominated government in Baghdad, was secured. Tehran turned its attention to the status-of-forces agreement that would govern the U.S. withdrawal. The draft agreement was too open-ended for Iran, so the regime persuaded Iraqi Prime Minister Nouri al-Maliki to demand two provisions: a December 2011 deadline for the United States' complete withdrawal from Iraq and an agreement that "Iraqi land, sea, and air shall not be used as a launching or transit point for attacks against other countries."
With this protection, Iran's fears of U.S. attack subsided. Still, Iran's political tone, set by President Mahmoud Ahmadinejad, had become more confrontational. The prevailing view in Tehran was that the United States had fallen into a quagmire in Iraq and needed Iran to stabilize the situation. In Tehran's eyes, the United States had become hostage to its hold over Iraq, with U.S. troops a target for possible retaliatory operations by Iran's Revolutionary Guards should Iran's nuclear facilities be attacked.
Iran continues to believe that it can resist the United States' containment policy if it builds up its sphere of influence in Iraq, as it has already done in the Herat region of Afghanistan. Iran's considerable clout within the Iraqi government and security forces, and the growing economic ties between the two countries, have made it unlikely, for example, that Iraq will uphold UN sanctions against Iran's nuclear program.
Iraq is Iran's second-largest importer of non-oil goods. In 2003, Iraq's non-oil imports from Iran totaled $184 million; by 2008, this figure was $7 billion and is expected to top $10 billion by 2012. Iraq is also largely dependent on energy imports from Iran. In 2009, it imported $1 billion in energy -- 40 percent of which was electricity and 30 percent refined petroleum products. Iran has also been involved in rebuilding Iraq's energy infrastructure. In 2007, for example, Tehran signed a $150 million contract to build a 300-megawatt power plant in Baghdad, and in 2008 it agreed to build a 400-megawatt electricity line between Abadan, a port city in southwestern Iran, and Alharasa in southern Iraq. Iran is also heavily invested in Basra, a strategically important port and Iraq's second-largest city: Iran plans to develop a free-trade zone there and build crude-oil and oil-product pipelines between the city and Abadan. Its commercial relations with Kurdistan have expanded as well; there are more than 100 Iranian companies operating there, and Kurdistan has been exporting its surplus oil to Iran in exchange for the import of Iranian electricity.
Iraq therefore can hardly afford to antagonize Iran. Iraq's implementation of sanctions would have deleterious consequences for its reconstruction. Even if Baghdad -- under U.S. pressure -- tried to implement sanctions, it would likely only reawaken the dormant smuggling network that developed between Iran and Iraq when the UN imposed crippling sanctions on Iraq from 1991 to 2003. That network simply enriched the powerful Iranian and Iraqi kleptocrats who ran it. And if the sanctions by some European countries that had been providing Iran with much needed high-tech products did not convince the Islamic Republic to change its nuclear policies, it would be naive to think that ending Iraq's limited, low-tech trade with Iran would cause Iran to change course.
For its part, Tehran views the United States as an impatient power. According to Hoshyar Zebari, Iraq's foreign minister, Ahmadinejad recently told him that "Americans planted a tree in Iraq. They watered that tree, pruned it, and cared for it. Ask your American friends why they're leaving now before the tree bears fruit." And indeed, at the same time that Iran has invested heavily in Iraq with the intention to stay, the United States has started departing -- something former U.S. Ambassador to Iraq Ryan Crocker has lamented as a lack of "strategic patience."