May 17, 2019: In the last week Iran suffered several major economic setbacks that Iranian leaders had not expected. The worst one was China, a major customer for Iranian oil, that said it would comply with the American sanctions and halt Iranian oil imports as its 180 day import waiver expired. Until a few days ago China had not made it clear how it would react. The Chinese decision was enforced quickly and Iranian tankers in transit or waiting to unload at Chinese ports were told that their cargo would not be accepted. This was a major blow for Iran as China was Iran’s largest oil customer. China was buying nearly half a million barrels a day and was willing to pay in barter (thus avoiding the banking sanctions). China has lots of items, including high tech goods that Iran needed. Now all that was gone.

This bad news came at the same time that European allies were admitting that their new financial system, designed to get around American economic sanctions and allow payment in hard currency, was not working and not likely to. The Americans were able to block such schemes and the Europeans, like the Chinese, were not willing to go total outlaw against the United States.

The immediate Iranian response was very hostile with threats to shut down all ship traffic in the Persian Gulf and attack American diplomats and military personnel in the region, mainly in Iraq where these Americans were most vulnerable. Iran gave its European allies, especially the ones that are still abiding by the 2015 treaty that lifted sanctions, 60 days to provide Iran with meaningful relief from American sanctions. If that does not happen Iran threatens to take some vague “strong measures.”

Iranian leaders feel pressure on all sides. There are still popular protests against the religious dictatorship and its corrupt ways, and these protests are persisting and increasing. The domestic economic situation is getting worse and the government is calling on Iranians to halt their protests and unite with their hated government to confront the American sanctions. Iranian leaders are comparing the current situation to the 1980s when Iraq attempted to seize Iranian oil fields while Iran was still in the midst of a revolution against its monarchy. Iran halted the invaders and in turn sought to invade Iraq and seize their oil. The other Arab oil states came to the aid of Iraq and, after eight years bloody stalemate, Iran agreed to a ceasefire. Iran never admitted defeat but that was what it was. In 2019 no one is invading Iran and the sanctions are largely in response to Iran invading other nations, or backing factions in civil wars. The expense of these foreign wars (in Syria, Lebanon, Gaza, Iraq and Yemen) is now unpopular in Iran and has been one of the complaints that have more and more Iranians out in the streets demanding a new government, one not run by Islamic clerics who rule as dictators behind a veneer of democracy.

The government threatens to use military and terrorist forces to shut down all oil exports from the Persian Gulf if all Iranian oil exports are blocked. That is considered unlikely because it would be a declaration of war by Iran,  and even the elderly clerics who have ruled Iran since the 1980s have made it clear they understand their military is more mirage than real military capability. It is also obvious to all Iranians that war would destroy Iranian oil production and export facilities and much else. It would take years to repair that damage and there is no good outcome for Iran if there is war in the Persian Gulf.

This time when Iran made these threats the Americans responded in a manner Iran was not accustomed to. It has been noted in the past that if these threats are not answered forcefully the Iranians take that as weakness and carry out as many low-level attacks as they can get away with. But if you match the bellicosity of their threats Iran is not encouraged to actually do anything violent. So the Americans and Iranians are both making threats. The media, especially in the West, love this sort of thing because it provides an opportunity to be as bellicose and paranoid as Iranian media normally is. Actually, most mass media in the Moslem world prefers this hyper-tabloid approach. It’s a cultural thing.

Iran also threatened to resume its nuclear weapons program (which it still insists never existed) but that is not likely because the program is expensive and doing so invites special operations type attacks (the Stuxnet hack, Israeli assassinations inside Iran and so on). Iran won’t maintain the “we will build nukes” threats unless they get a useful (and not harmful) response. The Europeans might want to submit but they have nothing to offer. The Russians also have little to offer and the Chinese have removed themselves for the time being. Iran is alone and does not like it at all.

Meanwhile, the UAE (United Arab Emirates) accuse Iran of “sabotaging” four tankers that were off the UAE coast. Details are vague and the tankers were not badly damaged. It is unclear exactly what is going on here but whatever it is there is not much substance to it. The Saudis have a more tangible complaint as the Iranian backed Shia rebels in Yemen finally carried out an attack on Saudi oil facilities that succeeded. Using small UAVs carrying explosives the rebels managed to damage some Saudi oil pipeline facilities. Nothing serious but a rare success for Iran in Yemen, where it has spent a lot of time and money to hurt the Saudis and has little to show for it. Iran has paid a lot of money to smuggle components of over a hundred ballistic missiles into Yemen. These were assembled and the Shia rebels fired them at Saudi Arabia. All of those missiles either missed the target or were shot down by Saudi missile defenses. The UAVs are easier and cheaper to smuggle in but were never seen as a decisive weapon. By late 2018 Iran was desperate because the blockade had made smuggling in ballistic missiles near impossible but the UAVs were small enough to be brought in and they were used in some successful attacks against government forces. These were low-tech and low impact but some government personnel were killed or wounded. The Arab Coalition went on the offensive against the UAV program and made it very difficult to make any more attacks on government targets. At that point, someone realized that the Saudi air defenses could shoot down missiles (and manned aircraft) but were much less capable when it came to small UAVs flying low and slow across the border to GPS locations where oil facilities were unattended and unguarded. Pipelines were the perfect target. Alas, pipelines are also quite sturdy and all the explosive laden small UAVs could expect do was some damage. That would meant a temporary shutdown of the pipeline until a repair crew could get to the remote area where the damage was done and confirm that the damage was inconsequential or make repairs if needed. In this case the precautionary shutdown lasted a few hours. A small victory but considering all the failures Iranian efforts were producing in Syria, Gaza, Lebanon and Iraq, a win is a win.

The Economy

The main thing keeping the unrest at home going is the declining state of the Iranian economy. Over the last year, since the Americans revived their sanctions, the Iranian consumer economy has been in decline. Iranians know that all this is not the fault of the Americans. For the average Iranian in the least year there has been more unemployment, more shortages and higher (40-50 percent) prices for staples like food. The government had promised that the economy would improve once the 2015 treaty went into effect and sanctions were lifted. That did not happen and ignited the popular protests which, in the past year, have become a major problem. The government tells the world that Iran will go to war if the new sanctions are not lifted but Iranians tell their leaders that war will be the end of the religious dictatorship which has misruled Iran since the 1980s. The government makes matters worse by denying any responsibility and going after Iranians with legitimate complaints. That includes labor leaders whose unions or employee organizations are full of loyal Iranians who demand economic change, even if it means replacing the government.

Yemen

In Yemen, the government points out that before the rebels were forced to recently withdraw from key Red Sea ports the UN personnel supervising the aid shipments were unable to inspect suspicious cargoes which, the government points out, obviously contained major weapons shipments. How else do you explain the appearance of nearly a hundred Iranian long-range missiles used in attacks on Saudi Arabia? Most of these missiles were shot down by Saudi missile defense systems and there were plenty of missile fragments left to analyze and conclusively prove what model of Iranian missile they were. The UN agreed with that and condemned Iran. There have been no more Iranian missiles smuggled in since the ports were shut down (by government forces surrounding with ground forces and a naval blockade) in late 2018. Now the UN plans to resume imports at Hodeida without Yemeni government forces checking incoming shipments. Or at least that’s what the rebels want and the UN is willing to concede that just to get the aid shipments moving again. This issue will be a major item at the Jordan peace talks.

One thing is clear, the Shia rebels have grown noticeably weaker and less effective. There have also been more rebel press releases describing imaginary missile and UAV attacks on Saudi Arabia or Arab Coalition forces in Yemen. While the rebels have made such attacks before there has been very little of that in 2019. Real attacks leave behind evidence (fragments of destroyed UAVs and missiles as well as damaged property and casualties, or at least people who witnessed the attacks). No such evidence for the many claimed attacks in 2019 other than a few using UAVs. This appears to be straight out of the Iranian playbook. For decades the Iranians claimed all manner of accomplishments that were fictional but effective at encouraging their supporters in Iran and elsewhere. These imaginary Shia rebel attacks apparently serve the same purpose.

Syria Stagnation

Russia, rather than Iran, has become the most reliable and least threatening ally of the Syrian government. Turkey is seen as a foreign invader by the Syrians, while Iran is appreciated for all its help in defeating the rebels but resented for trying to turn Syria into an extension of Iran rather than treating Syria as a sovereign nation. Syria cannot ignore Iran because the Iranians still have a large force of mercenaries in the country and these are useful in dealing with the remaining Islamic terrorists. Syrian army troops are not as enthusiastic about fighting as are the Iranian mercenaries. Most of these mercenaries are not Iranian but Shia from other nations. Iran has been spending a lot less on Syrian operations because Iran has less cash to operate with. Even at that level the cash and material Iran is still sending is essential for the Syrians. The IRGC (Iranian Revolutionary Guard Corps) budget for foreign operations (especially Syria and Lebanon) have been cut, apparently in a big way. The Iranian mercenary forces are Syria is undergoing a reorganization and downsizing. The IRGC explains this away by describing it as a “redeployment for the attack on Israel.” The reality is that there is a lot less cash to pursue that goal and the IRGC is actually trying to avoid more Israeli airstrikes if only because this implies that Israel continues to win this war with Iran. In Lebanon the well-established (since the 1980s when founded by the IRGC) Hezbollah has done the unthinkable and is asking the public for donations because Iranian subsidies have been cut in Lebanon as well. The Iran government is spending more money to relieve the economic problems most Iranian face back in Iran. Beyond that, the American revival of economic sanctions has left the Iranian government will less cash, a lot less. Iran has a major problem in that no one wants them in Syria much less acting as an occupying military force dedicated to starting a war with Israel.

Israeli intelligence noted earlier in the year that Iran had scaled back their plans and operations in Syria until they can come up with more effective tactics to cope with Israeli airstrikes and border defenses. Iran is not pulling its forces out of Syria, just trying to make them less of a target for the Israelis. This is especially necessary for Iranian weapons shipments into or through Syria as well as efforts to build weapons manufacturing or upgrading facilities. Some of the suspended IRGC efforts in Syria are being moved to Iraq. The Iran government is spending more money to relieve the economic problems most Iranian face back in Iran. Beyond that, the American revival of economic sanctions has left the Iranian government will less cash, a lot less.

Israel wants Iran out of Syria and would prefer that the Syrian Kurds get their autonomy. Israel is willing to make a peace deal with Syria and Turkey. While Iran has backed off from the Israeli border there are still plans to “destroy Israel.” These apparently revolve around upgrading over 10,000 of the longer (50 kilometers or more) range rockets Iran has provided Hezbollah in Lebanon. The upgrade is mainly about adding GPS guidance systems that will allow for precision attacks on Israeli targets (especially populated areas). Mass use of these rockets could overwhelm Israeli anti-missile defenses. Iran is also seeking to rebuild the Syrian missile factories and supply Syria with more modern missile technology. These efforts are regularly hit by Israeli air strikes.

Meanwhile, there are a number of complications in Syria that have led to a military stalemate. Many of these revolve around what to do with the Syrian Kurds and the remaining Islamic terrorists. Iran has problems with Israel in Syria, as well as with its own allies. The Iranians want the Syrian government (controlled by the Assad clan) to accept Iranian domination (as Hezbollah does in Lebanon) and agrees with Turkey that the Syrian Kurds should not get autonomy and should accept rule by Iranian backed Syrian government as well as the existence of Turkish controlled border areas. Iran has a major problem in that no one wants them in Syria much less acting as an occupying military force dedicated to starting a war with Israel.

The Russians would prefer that the Turks and Iranians got out of Syria and that the Assads and Kurds worked out a compromise, which the two seem willing to do. Iran is a major impediment to such a deal. The Americans, Israelis and most other Middle Eastern nations agree with this approach and are pressuring Iran to get smart and get out. That is unlikely to happen voluntarily.

May 15, 2019: In Yemen, Iran-backed Shia rebels used small UAVs equipped with explosives to damage two pumping stations that were part of a major oil pipeline delivering oil to Red Sea oil export facilities. The damage was not serious and exports were not interrupted.

May 12, 2019: In Yemen, the Iran-backed Shia rebels have finally begun to pull their forces out of Red Sea port facilities (essential for bringing in foreign aid), as they had agreed to do at the end of 2018 but delayed doing for months. A month after the Shia rebels said they would finally implement the December peace deal that was supposed to reopen the Red Sea port of Hodeida, Saleef and Ras Isa, they are finally moving their forces out of these areas today and turning security over to local forces. The departure of the Shia rebels, especially from Hodeida, is essential for delivering emergency food and other aid to northern Yemen. Iran had persuaded the Shia rebels to stall but that advice lost its appeal as the rebel situation worsened everywhere, not just at Hodeida. Iran had problems of its own at home and elsewhere and as not been able to help much. Per the December peace deal, the Shia rebels have until the 14^th to get all their forces at least five kilometers from the ports. At that point, both the government and rebel forces will move their troops back 18 kilometers from the ports and their heavy weapons (artillery and long-range rockets) 30 kilometers.

The Shia rebels have not given up control over all the export facilities near Hodeida. The rebels still control a large oil tanker (the Safer) moored 50 kilometers northwest of Hodeida and until seized by the Shia rebels in 2015, a key element for exporting Yemeni oil. At the time of its capture the Safer had about a million barrels of oil on board and the rebels have not allowed anyone to examine the Safer since then, despite warnings that without maintenance explosive gasses build up in the storage tanks and that creates the risk of large explosions and a massive oil spill into the Red Sea. The rebels were demanding that the oil on the Safer be sold and they receive most of the proceeds. The government refused to allow this.

May 11, 2019: The Yemeni government revealed that it had recently shot down eleven rebel UAVs equipped with explosives. These UAVs were sent to attack the Yemen parliament which has resumed meeting in the southeast (Hadramawt province). There is still some threat from these Iranian supplied UAVs, but while these are smaller and easier to smuggle in there appears to be a limited number of them left in Yemen because of the numerous Arab air raids during 2019 against bases they operate from. While the ballistic missile attacks have been halted there has only been a reduction in the use of armed (with explosives) UAV attacks. Government forces first encountered Iranian UAVs equipped with explosives in early 2018. There were a few successful attacks with these UAVs used as cruise missiles but since late 2018 the coalition has been quick to detect and destroy these UAVs, either in the air or on the ground.

In a major concession Iran agreed to abide by the rules of international sports competition (and the Olympics) and agree to compete with Israeli athletes. For years Iran compelled its athletes to fake injury or illness and default when matched with an Israeli during an international competition. This was not popular with athletes, especially the Iranian ones. The policy was also a clear violation of the rules that governed international competition. Years of Iranian refusal to even acknowledge what they were doing led to the Olympics and other international competitions to threaten Iran with a complete ban on their athletes. That, plus more Iranian athletes openly complaining of the policy and many Iranian fans also coming out against the problem, forced the government to back down and agree to play by the rules.

May 10, 2019: Pakistan told Iran that joint work on a natural gas pipeline from Iran to Pakistan had to be suspended because of U.S. sanctions.

In Yemen, Iran-backed Shia rebels claim to have fired 17 Iranian Zelzal long range (160 kilometers) rockets at Arab Coalition forces. There was no evidence of this happening.

May 9, 2019: The United States announced it was going to block all Iranian oil exports by the end of May. Iran responded that it would shut down all traffic in the Persian Gulf it the Americans blocked Iranian oil exports and resume its nuclear program. By the end of the day, the U.S. warned merchant shipping operating near Iran to take into account the fact that Iran might open fire on merchant shipping. European nations that are still adhering to the 2015 treaty (to lift sanctions) told Iran that resuming any nuclear activities would be a violation of the 2015 treaty and the European nations would join the Americans in resuming sanctions.

May 6, 2019: Israel is holding Iran responsible for the recent escalation of violence in Gaza. Iran backs the smaller, but more extreme Gaza Islamic terror group Islamic Jihad.

May 5, 2019: Israel used a UAV missile attack in Gaza to kill Hamed Ahmed Khudari, the man responsible to smuggling Iranian cash to Islamic Jihad in Gaza. The next day Israel posted a video showing the missile strike. Khudari ran a money transfer business in Gaza and was long known as the main reason that banned cash contributions were still getting into Gaza. In 2018 Israel revealed details of the Khudari operation and put him on their “known terrorist” list.

Iran has resumed smuggling oil to Syria with two tankers arriving with Iranian oil. One tanker was Iranian but the other was hired by a Syrian businessman. The Iranian oil shipments to Syria have been halted so far in 2019 because of American sanctions but now Iran has found ways to resume deliveries to Syria.

May 1, 2019: In the northwest, pro-Iran Iraqi PMF militias that arrived in mid-April to assist with disaster relief in flooded areas. Now Iranians in Kurdish areas claim that the Iraqi militias are switching to military functions and replacing Iranian troops as security forces for areas where Kurdish separatists sometimes operate. The Iraqis don’t speak the language or get along with the locals and recently two unarmed Kurds were shot dead by Iraqis.

The same heavy rains have caused flooding in northern Iraq and assistance is needed there as well. The Iraqi Shia leaders insisted that Iraq came first. The PMF militias are now part of the Iraqi armed forces and are paid for that. Iran backed PMF militias are unpopular in Iraq because they tend to do what they want and disobey orders from Iraqi military leaders who, in theory, oversee PMF militias.

April 29, 2019: In Gaza, Iran backed Islamic Jihad launched a rocket towards Israel but the rocket was defective and veered off into the Mediterranean where it exploded. Islamic Jihad takes orders from the IRGC and there is little Hamas can do about as Hamas needs Iranian support as well.

April 28, 2019: The IRGC released video backing their claim that they are able to monitor American warship operations in the Persian Gulf. The video was allegedly taken by an IRGC UAV that was able to pass close to and over the American carrier without being detected. Within a week French video experts demonstrated how the IRGC video was fake and actually assembled by an older video that was freely available on the Internet.

April 26, 2019: In Gaza, Hamas mobilized about 7,000 Palestinians to stage several violent demonstrations at the border fence. Israeli soldiers fired on Palestinians who threw rocks, explosives or firebombs at them. The return fire left up to fifty Palestinians injured. Hamas had assured Israel that this demonstration would be kept away from the fence as part of a ceasefire deal but that has not been happening. Hamas has been trying to negotiate and implement a ceasefire with Israel but has been unable to get all factions in Hamas (and Gaza) to agree. While there are more radial factions in Hamas, there are also Iran-backed Islamic terror groups (like Islamic Jihad) who take their orders (and millions of dollars a month) from Iran and Iran does not want a ceasefire. Iran is less hostile to Hamas and Fatah (which controls the West Bank) forming a united Palestinian government for the first time since 2007 (when Hamas split and became independent in Gaza). Iran wants Hamas to be the dominant partner in a united government and Fatah, Egypt and Israel agree that would not be a good thing. Egypt considers itself in competition with Iran for the loyalty of the Gaza Palestinians. Actually, most Gazans would prefer to be on good terms with Egypt but Iran has several very radical Gaza groups on the payroll and these thugs will not tolerate Egyptian dominance in Gaza.

April 24, 2019: In the northwest (Kurdistan province), Kurdish separatists clashed with some IRGC troops and killed one of the IRGC men. Kurdish separatist casualties were unknown. No one took credit for the incident but there are several Kurdish separatist groups operating in this area.

April 21, 2019: The Pakistani prime minister visited Iran and one item that came out of this was Iran and Pakistan agreeing to form a joint border force to improve security along their common border and ensure that any misunderstandings are quickly worked out.

April 20, 2019: France has cautioned Lebanon to oppose Iran building missile assembly and upgrade facilities in Lebanon. France has long been pro-Lebanon, in part because of the large number of Arab Christians who have been there for nearly two thousand years. Lebanese generally see France as a friend and respect French advice. The French pointed out that the Israelis are quite serious about attacking Iranian facilities no matter where they are in Lebanon. Iran-backed Hezbollah represents a minority of Lebanese but has managed to gain veto power over the elected Lebanese government. Most Lebanese do not want a repeat of the devastating 1975-90 civil war but Iran and Hezbollah are less concerned about that.

Iraqi officials hosted a one day conference in Baghdad on regional security attended by senior politicians from Iraq, Iran, Saudi Arabia, Turkey, Kuwait, Syria and Jordan. This was a rare event in that it got Iranian officials meeting with Arab officials.

April 19, 2019: In northeastern Syria (Deir Ezzor province), a convoy of IRGC troops was stopped at a checkpoint by Russian military police who refused to let the Iranians. The dispute escalated to a gun battle that left four Russians wounded and several IRGC men dead.