The ending of sanctions is starting to produce results for Iran. Oil exports (at two million barrels a day) were up 43 percent in April. This going better than expected as at the beginning of the year the government planned to increase oil production from the then current million barrels a day to 1.5 million by the end of 2016 and to two million by late 2017. This is still less than the 2.3 million barrels a day produced before the 2012 sanctions were imposed but it will take a while to restore production. Most (75 percent) of this oil heads east to China, Japan, India and South Korea. Despite the additional Iranian oil hitting the market the world price rose from $35 a barrel to $44 by the end of the month.
Foreign experts believed that it might take until the end of the decade to match 2012 production. As Iran’s neighbors have learned over the centuries it is not wise to underestimate the Iranians. Iran quickly sold off more than 40 million barrels it has stored in tankers offshore or in land facilities. Unfortunately the price of oil is much lower ($43, up from 29 a barrel) now than it was in 2012 ($108) and pumping a lot more does not mean as much. The Saudis and other Gulf oil states are keeping oil prices low in an effort to destroy the American shale oil industry (which most oil experts believe will not work) and hurt Iran (that is working). The lifting of sanctions also frees about $50 billion in cash frozen in foreign banks. This can be used to buy equipment needed to maintain and expand the oil industry, as well as other parts of the economy hurt by the sanctions. Iranian oil facilities are way overdue for refurbishment as much maintenance has been put off since the 1980s. Without massive investment the oil industry will become less productive and profitable. The government does not like to discuss this openly because the needed investments are huge and mean that other infrastructure needs will have to wait and that will hurt nearly all Iranians.
While some nations are eager to invest in Iran many are not. All major international companies constantly refer to risk management reports on Iran and these point out that Iran is still potentially unstable because it is ruled by a corrupt and unpredictable religious dictatorship that most Iranians oppose. Moreover this government’s use of terrorism and military intervention, especially in Yemen, Lebanon, Syria and Iraq has created hostility with most neighbors (especially Turkey and the Gulf oil states) in the region. These countries have allies in the West that then consider Iran a very risky place to invest.
The official Iranian response to all this is to blame America and Israel for spreading lies and disinformation about Iran in an effort to discredit Iran. The neighbors don’t consider themselves dupes of U.S. and Israeli propaganda and conspiracies and have some pretty tangible current and historical reasons for mistrusting Iran. This includes the contempt Iranians have long had for their neighbors, especially the Arabs. Turkey and Russia, who have proved impossible to defeat militarily in the past, get some respect for that but are otherwise considered vulnerable to Iranian manipulation.
The U.S. and its Sunni Arab allies fear that Iraq is still on its way to becoming subordinate to Iran. Because of effective Iranian aid in dealing with ISIL the Iraqi government has become less dependent on American and NATO support. Meanwhile Iran still supports the aggressive and autonomous behavior of the Iran-backed Iraqi Shia militias that are assisting the Iraqi Army. The Shia militias are also taking control of territory in urban and rural areas, displacing the police and local government. At the end of 2015 there were several thousand American troops already in Iraq and more (most of them Special Forces) on the way. There are now nearly 5,000 (including contractors that are military veterans). The government has made it clear to Iran (which is very hostile to U.S. forces in Iraq) that some American troops are essential. The presence of American troops also makes it less likely that Iran will attempt anything too ambitious (like invading or backing a takeover by Shia militias) and everyone knows that. But Iraqi leaders also know that American troops come and go while Iranian forces are always next door. Most Iraqis are more concerned with Iranian meddling than anything the Americans might do. At the same time Iraqis are wary of the other Gulf Arabs, especially Saudi Arabia. The Shia politicians running Iraq have to move carefully because Iran, Saudi Arabia and America are all making demands, often contrary ones. Iran has assured Iraqi leaders that Iranian military trainers and advisers with the many Shia militias are under orders to keep those militias from misbehaving (murdering Sunnis, looting or interfering with army operations).
In Syria Iran admits to having troops (over 3,000) there. Iran insists they are all volunteers, which explains the presence of army troops, who are rarely sent overseas. Until recently nearly all were from the IRGC (Islamic Revolutionary Guards Corps) and most of them officers and career NCOs from combat units who were sent to Syria for a few months to get some combat experience by working with government, Hezbollah and militia units. But now many of the IRGC are being replaced or augmented with regular army commandos. Most of the Iranian deaths (over 240 so far) in Syria are mentioned in Iranian media and until 2016 they were mostly officers or NCOs who were obviously working in or very near to the combat. This year most of the dead have been soldiers.
Russia and Iran continues to work closely together to support their mutual friend the Assad government in Syria. This includes supporting a ceasefire in Syria which the Assads get away with violating in part because of Russian support (particularly in the UN, which overseas the ceasefire) and less public Iranian support. Although Russia and Iran don’t agree completely on how to keep the widely hated (especially inside Syria) Assads in power both agree that the Assads need all the help they can get to survive and prevail. Iran and Russia, who have often been hostile (even at war) with each other in the past, exemplify the concept of “frenemy” (and friend who is also an enemy.) The current situation is made worse because the presidents of Russia and Iran apparently don’t like each other personally.
Despite the mid-March Russian announcement that it is withdrawing troops from Syria Russian warplanes are still supporting Syrian government forces advancing in the northwest around Homs, Palmyra and Aleppo. Russia has made it clear that it is only withdrawing some of its air power and military personnel. The departing forces can be returned quickly if needed. Russia will maintain control of port facilities on the Syrian coast and nearby airbases. Iranian leaders admit they are glad to see Russians leaving as many Iranians believe there is always a possibility that the Russians will side with Israel if Iran makes a serious threat to Israel. The withdrawal announcement is believed to be a Russian effort to get the Assad government to go along with whatever peace deal can be arrived at in the upcoming UN sponsored peace talks. Whatever the peace deal terms are everyone would apparently cooperate to crush the most troublesome Islamic terrorists. These would mainly be al Qaeda and ISIL Islamic State in Iraq and the Levant) affiliated groups. Russia and Iran pitch their efforts in Syria as an important part of the war on terror.
Peacekeeping With The Russians
Russia and Iran are cooperating to maintain the ceasefire they arranged to end nearly a week of fighting between Armenia and Azerbaijan. Iran has more influence over Azerbaijan and is doing what it can to persuade the Azerbaijanis to stop violating the ceasefires. Both these countries were formerly part of the Soviet Union. Forces from the two nations began firing at each other on April 2nd and a ceasefire was negotiated and implemented on the 5th. Since then that deal has been in danger because not everyone has been persuaded to stop shooting. Since April over 110 have died and many more wounded. Nevertheless the peacemaking effort is succeeding as the violence is declining. Russia considers itself the “protector” of Armenia but has managed to maintain good relations with Azerbaijan as well. In doing that Russia established one of the more successful peacekeeping operations since the Cold War ended in 1991 by getting Armenia and Azerbaijan to agree to a ceasefire in 1994 after another round of fighting over a territorial dispute. Russia became a military ally of Armenia as part of that arrangement. Iran has tried, and not always succeeded, to be on good terms with Azerbaijan, if only because about a quarter of the Iranian population are Azeris. At the same time Iran and Russia, traditional enemies, have become allies and those links are being used to deal with latest round of violence. Iran has long harbored an intense interest in Azerbaijan. This is because most of the Turkic and Moslem Azeris live in Iran. Up until 1813, modern Azerbaijan was part of Iran. Then the Russians showed up. Armenia and Azerbaijan were the last Russian conquests as the tsar’s soldiers and Cossacks advanced down the Caucasus region (between the Black and Caspian Seas) in the 18th and 19th centuries. The Russians stopped when they ran into the Turkish and Iranian empires, but not before taking a chunk of Azerbaijan from Iran. The Iranians have not forgotten. In effect, most of "Azerbaijan" is in Iran and Iran has long hoped to reunite all Azeris under their rule. Many Iranian Azeris have risen to senior positions in the government. Despite that, most Azeris would like all Azeris united in a single Azerbaijan. This is not a popular idea within Iran. The Russians, on the other hand, have come to accept the 1991 loss of Azerbaijan and Armenia.
The Forgotten War
In Yemen Iran is believed to still support the Shia rebels but the air and naval blockade has been very effective and most, if not all, recent Iranian smuggling attempts have been detected and blocked. Cut off from material (as opposed to diplomatic and media) support the rebels are in a bad situation that is getting worse. Still Iran counts its efforts in Yemen as a success as for a small investment it caused its arch foe Saudi Arabia a lot of trouble and loss. Iran is still advising the Shia rebels, who appear to be bargaining hard because they believe that Iran will continue backing them, especially when the current war is over and the blockade is lifted.
May 7, 2016: The government revealed that thirteen Iranian troops (soldiers and IRGC) have been killed in Syria over the last few days. All the casualties occurred around the northern city of Aleppo where the Assad forces are involved in some major fighting with ISIL and al Nusra rebels. As usual Iran is supplying combat leaders, commandos and advisors on the ground while Russia supplies air and artillery support.
May 3, 2016: President Rouhani finished a three day visit to South Korea by saying that Iran does not approve of North Korea getting nuclear weapons. While some may doubt that, South Korea has long been a major export customer for Iranian oil and an eager investor in the Iranian economy. The sanctions halted all that but now South Korea is talking about loaning Iran $25 billion so that South Korea firms have an inside track on getting major contracts to do the work. South Korean firms have a good track record in Iran and the Iranians want to maintain that relationship. As a bonus these close relations with South Korea annoys many Americans. At the same time all this good-will with South Korea masks the fact that Iran and North Korea have been trading military technology and exports for decades.
April 25, 2016: In northern Iraq fighting broke out between Kurdish troops and a local Turkmen Shia militia. The shooting went on for two days and at least twenty were killed and over fifty wounded before Iraqi soldiers and tribal leaders arranged a ceasefire. The Kurds played a major role in pushing ISIL out of this area in late 2014 but did so with the help of local Turkman and other militias. Most Shia militias are supported and heavily influenced by Iran. While many Kurds blame Iran for instigating the violence here there is also the ethnic issue. There have always been ethnic and religious tensions in this part of Iraq and there was a similar clash in late 2015 that also involved the same Turkmen militia. This is all connected to the ongoing problem with the Arab dominated Iraqi government recognizing Kurdish control of Kirkuk province.
April 20, 2016: The U.S. Supreme Court upheld a 2007 court case that held Iran liable and awarded $2.64 billion in compensation to the families of victims in terror attacks from 1983 to 2011 that killed Americans. The money will be taken from Iran frozen funds that are in the process of being returned to Iran because of the July 2015 treaty. Over a thousand families of victims will share in the $2.64 billion.
April 19, 2016: The GCC (Gulf Cooperation Council, the Arab oil states in the Persian Gulf) and the U.S. announced a new agreement to tighten the naval blockade around Yemen. In the last two months at least four Iranian attempts to smuggle weapons (to Yemeni Shia rebels) have been intercepted. The new agreement includes joint patrols and more sharing of information to make it more difficult for smugglers.
April 17, 2016: The government confirmed what Iranian Kurds have long neem complaining about; that the security forces are arresting a lot of Kurds. In the last year 12,000 Kurds were arrested for various offenses. Sixty percent were heads of families. Kurds claim that most of the arrests were related to government attempts to shut down armed Kurdish separatists that have been operating in the northwest (where 12 million Kurds live) for decades.
April 15, 2016:
The U.S. has clarified its interpretation of the 2015 treaty that lifts sanctions on Iran by confirming that Iran only has to shut down its nuclear development program. There are no such restrictions on the ballistic missile program or the Iranian support for Islamic terrorism. This includes aggressive actions against Israel and Sunni Arabs. Many American allies, especially Israel and the Gulf Arab states, were disappointed with this U.S. “clarification.”