Last month, Iran announced its intent to build nuclear-powered submarines. While some may worry that this is yet another Iranian bid for destabilizing power, there is no need to panic. Tehran will be wasting money it does not have on a tool it does not need. Iranian nuclear submarines are not a realistic threat to American security. They may even be a bluff—Tehran has announced plans for a stealth-fighter aircraft and other high-tech weapons that have never seen the light of day. However, the nuclear program shows that the leadership can commit to internationally and financially costly programs for decades if it believes it will gain security and domestic prestige.

The Iranian desire for a conventional blue-water navy that can take action far from friendly shores has its origins in the days of the shah, who acquired a number of frigates from Britain and sought advanced American destroyers. This was a mismatch with Iran’s needs, as shown in April 1988 when the United States, furious after one of its ships hit an Iranian mine, launched a series of brief attacks on the Iranian navy. One of the frigates was sunk and another critically damaged; the Americans departed unscathed.

Iran learned from the defeat. Its naval forces are now centered on swarms of light boats, midget submarines, mines and coastal missiles that offer Tehran its best hope of harming an attacking power. When so close to home, expensive and bulky nuclear propulsion is overkill compared to smaller, quieter and cheaper diesel-electric propulsion; in fact, the U.S. Navy has panicked several times in recent years after modern diesel-electric submarines slipped through its defenses undetected. Iran is far behind the major powers in submarine technology, but its forces already can seriously endanger international shipping; during last winter’s tensions, experts suggested concerns over Gulf security were adding from eight to more than twenty dollars to the price of a barrel of oil.

But Iran’s leaders still express grander ambitions than threatening the vital sea-lanes off their coast, and accordingly they have sailed into the Mediterranean and spoken of putting ships off New York City. Additionally, Iran’s top naval officer recently announced plans to build ten more surface warships. Iran longs for the international prestige to match its storied civilization and claims of religious leadership; a traditional navy might seduce Khamenei just as it seduced the shah.

The problems are Iran’s geography and enemies. In spite of its long coast, Iran is poorly positioned for global naval power. It accesses the world through the claustrophobic Persian Gulf, Strait of Hormuz and Gulf of Oman; beyond, it finds a growing Asia but also much poverty and insecurity. Its strategic competitors—chiefly the United States—dominate all these areas with aircraft, attack submarines and large surface fleets. Modern antiship weapons are deadly and have long ranges; large ships on the open ocean are extremely vulnerable. Iran’s ships would have few places to hide in the Indian Ocean and even fewer in the coastal seas, and with its limited resources and technological base, it cannot build enough ships to drive a superpower away.

The only ways out of this tough situation are stealth and ingenuity. Submarines are a perfect fit. In the shallow and noisy waters off Iran, submarines can blend in and wait for targets. With critical shipping lines in the area, a few attacks can have a major political and economic impact. Large nuclear-powered submarines are not optimal for this role. While most modern submarines need air to power their engines and charge their batteries and thus must periodically surface, nuclear submarines need no air and do not need to use weak batteries underwater. Thus, they can remain underwater indefinitely and travel long distances at depth. Their reactors, however, constantly make some noise, making them less stealthy than their slower, air-breathing counterparts. They are best suited to long-distance missions that quieter subs cannot carry out—protecting global fleets or bringing ballistic missiles to enemy coasts.

This latter mission is troublesome given Iran’s nuclear program. But ballistic-missile submarines would not be the most efficient way to build Iran’s nuclear deterrent. Iran’s missiles can already hit Israel and a large number of American bases; a few years of development could see all of Europe under threat. Submarine-launched missiles would hypothetically allow Iran to strike America, but they will be less effective deterrents. Iranian submarines would have to take long journeys around Africa or Australia, since shorter routes through the Suez Canal or the Malacca Strait would be too closely watched. A handful of subs would not be enough—some would always be traveling, getting repairs or engaged in training, requiring a large fleet to ensure that a few were always within striking distance. Missiles on the Iranian mainland aimed at American allies are a sufficient deterrent. Iran would thus spend many billions on a weapons system that is at best superfluous and at worst useless, which adds nothing to its regional power.

More likely, Iran might use nuclear submarines to justify its enrichment activities. Everything on submarines needs to be compact, so their reactors typically use enriched uranium to allow for smaller, longer-lasting reactors. Most world navies fuel their reactors with uranium enriched above Iran’s current 19.75 percent, and many use fuel enriched to weapons grade. Incredibly, the Nuclear Non-Proliferation Treaty does not prohibit the enrichment of uranium to high levels when used for fuel. Iran could argue that its enrichment activities support its nuclear-submarine program. The West would then struggle to use international law to constrain Iran’s nuclear development. But strategists should recall that Chinese naval reactors use uranium enriched to a much less risky 5 percent. If Iran cooperates in other areas, Washington might consider tolerating the transfer of China’s most basic naval-reactor knowledge, especially since the pressurized-water reactors used on submarines pose no external proliferation risk.

Still, nuclear submarines will represent an extreme expense for Iran. Oil prices are presently near Iran’s budget target, but the country is missing out on ninety million dollars per day in export capacity, and tighter European sanctions are imminent. Inflation and devaluation have made life harder for all, and if Europe’s economy suffers a major downturn, oil prices will fall more. Iran is unlikely to find a major power that will help it design the submarines—as France is doing for Brazil—which will increase cost and cut quality. Program costs will likely be many billions.

The ten new surface warships will have a more mixed impact. They should be just as vulnerable to conventional warfare as they were in 1988, though they may have unconventional roles—aiding in the multibillion-dollar military-smuggling industry or showing the flag (and perhaps aiding the fight) in Syria. Some state media have linked the new ships to the fight against piracy off Somalia and Yemen, and Iran has repeatedly boasted of a growing role there. Its claims appear to be exaggerated, but the piracy fight is still an opportunity for Iran to play a positive role in the international community, even though it will be overshadowed by the nuclear crisis.

Iran’s leaders may make nuclear submarines a national totem. But as costs rise and Iranian elites realize how much money is being dumped into the sea for such small gains, don’t be surprised to see more internal divisions.

John Allen Gay is program assistant for the Regional Security Program and the Program on American National Security in the Twenty-First Century at the Center for the National Interest.