WASHINGTON — The escalating confrontation with Iran poses a major new political threat to President Barack Obama as he heads into his campaign for re-election, confronting him with choices that could harm either the economic recovery or his image as a firm leader.
Sanctions against Iran's oil exports that the president signed into law on New Year's Eve started a fateful clock ticking. In late June, when the campaign is in full swing, Obama will have to decide whether to take action against countries, including some staunch allies, if they continue to buy oil from Iran through its central bank.

After fierce lobbying by the White House, which opposed this hardening in the sanctions that have been its main tool in pressuring Tehran, Congress agreed to modify the legislation to give Obama leeway to delay action if he concludes the clampdown would disrupt the oil market. He may also invoke a waiver to exempt any country from sanctions based on national security considerations.

But using either of those escape hatches could open the president to charges that he is weak on Iran, which is viewed by Western powers as determined to build a nuclear weapon. Republican candidates, led by Mitt Romney, have threatened to use military action to prevent Tehran from building a bomb, and have criticized Obama for not doing enough to stop it from joining the nuclear club.
"If we re-elect Barack Obama, Iran will have a nuclear weapon," Romney declared in South Carolina in November. "And if we elect Mitt Romney, they will not have a nuclear weapon."

Few inside the administration see a surefire way of preventing Iran from developing nuclear weapons capability, though none are ready to discuss moving to a focus on containing a nuclear Iran.
The administration is deeply reluctant to use military action, and the United States strenuously denied involvement in the recent killing of an Iranian nuclear scientist. Instead, it has focused mainly on using economic pressure to make Iran pay a high price for expanding its nuclear efforts despite international sanctions.

"To appear to back off, when the Iranians are proceeding pell-mell with their nuclear program, would be very difficult for the administration, particularly in an election year," said Stuart E. Eizenstat, a former senior official at the Treasury and State departments who helped draft sanctions against Iran during the Clinton administration.
"On the other hand," he said, "sanctions could harm the economy and his re-election chances. It is an excruciatingly difficult set of choices, and one he will face sooner rather than later."

Sen. Mark Steven Kirk, R-Ill., who sponsored the sanctions bill, along with Sen. Robert Menendez, D-N.J., added another variable to the president's difficult calculus, arguing that sanctions may be the only thing that dissuades Israel from mounting a pre-emptive military strike on Iran's nuclear installations.
"The first waiver would trigger a whole lot of other waiver applications, potentially gutting the policy," he said. "The more you gut the policy, the more likely you make military action by Israel. The pro-Israel community would not want a gutting of the sanctions."

The administration says it plans to implement the sanctions rigorously, and that the modifications it negotiated with Congress will allow Obama to do so without rattling the oil market. The European Union is expected to impose its own sanctions on Iran's oil exports next week, making it easier for the United States to carry out its measures.
Administration officials point to some encouraging signs: Major importers of Iranian oil, like Japan and South Korea, are searching for alternative suppliers. And Iran's currency, the rial, has plummeted since the sanctions were signed, raising pressure on the regime.

Referring to the tense negotiations with Congress, a senior Treasury official said, "It was a question of tactics and timing, not the target."
With his ending of the Iraq war and the assassination of Osama bin Laden and other al-Qaida leaders, Obama has projected an air of competence on national security, and he is arguably less vulnerable in that field than previous Democratic presidents.

But trying to influence the world's oil market is a different kind of challenge, experts say. Already, Iran's leaders are maneuvering to drive up oil prices, whether to signal that sanctions could bring repercussions, or to mitigate the effects of reduced sales. Iran's threat to shut off the Strait of Hormuz, through which a fifth of the world's oil passes, sent prices soaring earlier this month. (Agencies)