U.S. Offers Billions in Arms to Ease Mideast’s Iran Anxiety

by Nicole GaouetteAnthony Capaccio
July 9, 2015 — 12:00 AM EDT
Updated on July 9, 2015 — 7:52 AM EDT

An agreement to curb Iran’s nuclear program could create a bonanza for U.S. defense contractors who already are benefiting as the Obama administration tries to assuage Israeli and Gulf Arab concerns by cutting deals for more than $6 billion in military hardware.

The details of a potential deal being negotiated between Iran and six world powers -- China, France, Germany, Russia, the U.K. and U.S. -- would determine what steps the U.S. takes to help its allies. A nuclear agreement is likely to prompt Mideast partners to seek improved defense systems from American contractors such as Boeing Co., Lockheed Martin Corp. and Raytheon Co. as well as weapons-makers in France and elsewhere.

“In theory, an Iran deal could lead to a reduction in tensions in the region that would reduce the demand for advanced weaponry,” said William Hartung, director of the Arms and Security Project at the Center for International Policy in Washington. “In the short-term, a deal could actually boost the demand for arms.”

Gulf states and Israel have said they wouldn’t trust any pact forged in Vienna to curb Iran’s pursuit of nuclear weapons. They also worry that if economic sanctions are lifted and Russia’s push to lift an arms embargo on Iran succeeds, that would let the Islamic Republic upgrade its aged military hardware. Those concerns could lead them “to seek more imported weaponry regardless of whether there is an Iran deal,” Hartung said.

Michael Rubin, a Middle East military analyst with the American Enterprise Institute, said an estimated $100 billion in Iranian oil revenue now frozen by sanctions “will make possible an Iranian military shopping spree that it will be near-impossible for Israel to keep up with.”

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http://www.bloomberg.com/news/articles/2015-07-09/u-s-offers-billions-in-arms-to-ease-mideast-s-iran-deal-anxiety