President Donald Trump's decision to slap sanctions on Iran's elite Revolutionary Guards is the "exact opposite" of what Washington should be doing if it wants to effect peaceful change in the Middle Eastern country, one analyst has told CNBC.
Trump's decision has forced Iranian moderates such as President Hassan Rouhani and Foreign Minister Javad Zarif to rally around the hardline Guards, said Barbara Slavin, director of the Future of Iran Initiative at the Atlantic Council.
Maintaining Iran's cooperation is crucial to securing its nuclear ambitions and the foreign business deals that were struck when sanctions were officially lifted on the country's economy in January 2016. Companies such as Boeing, Siemens and Total have since established their interests in the once-pariah state.
Losing Iran's favor could have a negative impact on the world economy, too. "Direct confrontation in the Gulf is a major risk to the global oil market, given that 20 percent of the world's oil travels through an Iranian-controlled chokepoint at the Strait of Hormuz," Pat Thaker, regional director for the Middle East and Africa at the Economist Intelligence Unit, told CNBC.
Following Trump's statement Friday, Rouhani said in a televised speech that the Guards "always protected our nation against terrorists." This is a departure from his previous stance on the group, whose dominance in the Iranian economy is a foil against his plans for reform.