For the first time in four years, the US has a good card to play in threatening Iran. But its decision this week to try to sever Iran’s links with financial markets is revealing how successful Tehran has been in building those ties and how many friends it can claim.

The US has picked this week’s Munich security conference, which began last night, to challenge the European Union to join it in a rough and ready form of financial sanctions, in an attempt to persuade Iran to drop its nuclear ambitions. The timing is excellent: Iran is scrambling to make the most of the fading boom in oil prices, and to strike commercial deals to reduce its vulnerability to pressure.

In a gesture of defiance, Iran test-fired a new land-to-sea missile yesterday with a range of more than 200 miles (300km). “We have successfully fired a cruise missile . . . hitting targets in the Sea of Oman and northern Indian Ocean,” Ali Fadavi, deputy navy commander, said. “This missile . . . can hit all kinds of big warships in all of the Persian Gulf, Sea of Oman and northern Indian Ocean,” he added.

Recent warship deployment by the US has been an unsubtle advertisement of its military ability to strike Iran, even if that proves politically impossible.

Gregory Schulte, the US Ambassador to the International Atomic Energy Agency, the United Nations nuclear watchdog, used Munich to accuse European countries of doing too little to join the US in cracking down on Tehran, a complaint that US officials have been lobbing at Europeans in private since last year.

The US has its eye on the extensive commercial relationships between Iran and Austria, Italy, Germany, France, Spain and, to some extent, Britain. The American demand has become public since the success of its unilateral drive to shut Iran out of the financial markets. Its blacklisting of the state-owned Saderat and Sepah banks — meaning that they cannot carry out transactions in US dollars — has had a discernible impact on Iran, more than the loose trade sanctions that the UN has agreed separately.

In the past two months, Iran has been asking for payments for oil revenues and other exports in euros, not dollars. It is now believed to be conducting much of its foreign exchange transactions in euros or United Arab Emirates dirhams. The Government has also been reported to have been shifting its foreign-held assets out of dollars into euros. From one point of view, it is surprising that Iran should feel vulnerable: it is one of the world’s biggest oil producers; has a list of customers for that oil who are not about to walk away; and has enjoyed four years of unexpected high revenue from that production.

But President Ahmadinejad, whose critics at home attack him for economic mismanagement, is under pressure to return more of the benefits of the boom to ordinary Iranians, as he promised in his election campaign. Two weeks ago, in his budget for the coming year, he said that he planned to spend a fifth more than last year and to set aside more of oil revenues for infrastructure. Among other urgent needs, Iran is trying to invest more in oil refining. Because it refines so little of its own oil, it has to import petrol, and so in times of rising oil prices the Government has to pay huge subsidies to prevent ordinary people being hit by rising prices. That soaks up some of the benefit it receives from higher oil prices.

The Government’s difficulty in tackling this obvious vulnerability, an oddity in so significant an oil producer, has given hope to those who fear that it wants to develop nuclear weapons. It insists that it wants merely to equip itself with civil nuclear power stations, but analysts calculate that if it masters the technology that it says it is installing, it could be only three or four years away from a bomb. It has not yet mastered the crucial nuclear technology, and its separate difficulties in increasing refining capacity are a reminder of the barrier that its semi-isolation has proved to be.

Iran’s strongest defence against such pressure will be the web of alliances that it has carefully struck up. On Wednesday, its Armed Forces test-fired a new Russian-made air defence system, sold to Iran despite fierce US criticism. It is also in advanced talks with Indian investors about building new oil refineries.

This week Swiss banks also said that they would not stop dealing with Iranian companies or individuals, provided that they were engaged in legitimate activities. “We should differentiate between rogue states that we should not deal with and the citizens of the same country,” the chairman of the Swiss Bankers Association said.

It has been some time since the US had a clear tactic in dealing with Iran. It now does: to peel off Iran’s friends, starting with the EU. But that may not be as easy as the US, judging by its indignation, thinks that it should be.

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