Gary Sick, a White House adviser in the late 1970s, has suggested that Tehran may have chosen Conoco partly to signal that Iran is now prepared to improve relations with the United States. If so, it can only read this week's decision as a U.S. rebuff.
Marr says previous policy has been "gray," partly to enable U.S. policy-makers to use a "carrot-and-stick approach" in attempts to get Iran to change--offering incentives instead of just threatening penalties.
Hard-liners contend that the United States would do better to keep the pressure up--and tighten it if possible.
With global oil prices stagnant, Iran already has been undergoing severe economic strains. The value of the rial, Iran's currency, has plummeted more than 40% over the last four months. Prices of imported goods are soaring, and Tehran needs new income sources.
But others argue that Washington is unlikely to be able to squeeze Tehran much more. Not only are American firms already enmeshed in Iran's economy--their subsidiaries receive about 24% of its crude oil, for example--but European corporations can easily fill any trade vacuum.