The new sanctions against Iran have caught up with India, which is a major importer of Iranian oil. Starting February 6th India will no longer be able to pay for Iranian oil with euros but will have to use rupees (the Indian currency), and even that will be difficult. India and Iran are trying to work out barter arrangements, whereby Indian food and manufactured goods will be shipped to Iran to pay for the oil. But India pays Iran over half a billion dollars a month for oil and that’s a lot of stuff. India is the largest customer for Iranian oil.
Iran is trying real hard to beat the sanctions and it’s a battle of wits between Iranian smugglers and the lawyers, intelligence, and trade experts in the West seeking to block each new ploy. At the moment Iran is losing about half its pre-sanction oil sales. Even their largest customers (India and China) fear the sanctions which threaten to cut off any offending bank from the international financial system if they assist Iran in selling its oil. It is, however, legal to barter, which Iran is trying to do with India and China. This increases the costs of imports because India and China do not produce all the items Iran needs and to get these Western goods via India and China means higher costs.
Iran needs these barter deals because it is rapidly running out of foreign currency for needed imports (like food). There is a lot of pressure from people in the government to stop sending billions a year to Hezbollah, Sudan Hamas, Syria, and other allies in the Iranian effort to conquer the world for Shia Islam. This includes destroying the U.S. and Israel, and several decades of this effort has cost Iran dearly. Over a hundred billion dollars has been spent supporting terrorism since the 1980s and Iranians are aware of how futile and self-defeating it all has been. With the new sanctions beginning to bite, there is a growing consensus in Iran for a new foreign policy. The people at the very top are not yet interested. Despite all the damage the new sanctions have done, Iran continues to lie and delay when it comes to negotiating a deal to halt its nuclear weapons program. The nuke program is still a go.
The government is trying to convince the world, and especially its own population, that it did indeed recently send a monkey into space and safely return the animal to earth. This launch may indeed have successfully launched a monkey up about a hundred kilometers and brought him back alive. But the government PR people definitely screwed up by using pictures from a similar launch (which was a failure, the monkey died) five months ago along with photos of last week’s launch. Pictures of two different monkeys were released and there were other inconsistencies with the Iranian claim. This launch was not a scientific breakthrough, it first occurred in the West and Russia over 50 years ago, but the Iranian publicists are getting sloppy with this stuff. There are similar problems with recent claims that Iran had developed a new stealth fighter. Western engineers examining the photos point out the physical impossibility of the aircraft shown to fly or be stealthy. The government has long used these announcements (of fantastic new weapons designed and built in Iran) that are largely fantasy and help make Iranians feel better about the religious dictatorship that otherwise makes their lives miserable. The incompetent government publicists are typical, for most Iranians, of most government employees.
While many new Iranian weapons may be mostly spin, the government is developing some effective Cyber War and electronic weapons. Since Iran came under increasing Cyber War attack from the U.S. and Israel over the last few years, the government has managed to muster a significant Cyber War force of its own. This sort of counterattack is popular within Iran. Most Iranians may hate their government but they are very proud of being Iranian. Last year the government warned Iranians to brace themselves for more Cyber War attacks by the U.S., Britain, and Israel. Two months earlier the U.S. admitted that several successful Cyber War attacks on Iran (Stuxnet, Duqu, and Flame) were indeed the product of a joint American-Israeli effort. Iran always includes Britain in these foreign conspiracies because Britain has been successfully interfering with Iranian diplomacy for several centuries and is greatly resented for this.
But the Cyber War attacks are all apparently coming from the U.S. and Israel and the program is huge, with many of these secret software programs (Gauss being the latest to be discovered) still not known to the Iranians. When these programs are discovered, the investigation usually reveals that the stuff has been active for several years. This has been a major defeat for Iran, which had operated a successful smuggling and money laundering program for decades because of their ability to keep the details secret. Much of that secrecy is now gone because of the American/Israeli Internet espionage/sabotage campaign. Iran is striking back with cruder (and more readily available) cyber weapons (like hacking Western web sites or shutting some down with DDOS attacks). Iran is also developing GPS jammers and planning to sell them to anyone who can pay. Iran has a lot of smart, patriotic, and well educated people who don’t have good jobs. A serious Cyber War capability could be built and that appears to be what is going on.
In Iraq the Sunni Arabs of western Iraq (one of the few parts of Iraq where Sunnis are the majority) have blocked the road to Jordan. This is one of the few land routes Iran can use to ship supplies to their Assad allies in Syria. Most of eastern Syria is under Sunni rebel control and is not safe for cargo from Iran. The Gulf Arabs are the main financial supporters of the Syrian rebels (who are mostly Sunni Arabs) but have been reluctant to provide advanced (bought from Western nations) weapons because of the corruption and chaos within the rebel movement which might see those weapons end up in the hands of Islamic terrorists. The rebel coalition is trying to remedy this lack of trust by imposing more discipline among the many rebel factions. This has proved very difficult and gives Iran hope that their man Assad may yet regain control over all of Syria. But more and more Iranian officials are openly commenting on the failure of their ally Basher Assad to defeat the rebels and the likelihood that Syria would fall under the control of its Sunni Arab majority. Assad is part of the Shia (Alawite) minority in Syria and his family has ruled Syria since the 1960s. Gaining such an ally in the 1980s was considered a major coup by Iran. But Syria is poor and ineptly run. It has cost Iran tens of billions of dollars to prop up the Assads. Many Iranian officials now admit it appears that Assad is doomed and that the loss of Syria will be a major defeat for Iran.
It was recently confirmed that Iran is behind the large quantities of unidentified AK-47 ammunition flooding into Africa over the last few years. There has been a major effort to keep new AK-47s and ammo for them from getting onto the illegal arms markets in Africa. Keeping new weapons out of the continent has been easier than blocking delivery of ammo for the millions of assault rifles already there. This was especially true of the mystery ammo, which had no identifying marks on the shell casings and comes in plain brown boxes and crates. For the last several years the source of this stuff has remained a mystery. This ammo also showed up in Gaza and in southern Lebanon (where Iran-supported Hezbollah rules supreme). That indicated Iran might be involved, as Iran is a major supplier of weapons to both areas. Iran has always denied it was the source of this ammunition. Iran has long sought to export the weapons it does produce (mostly low-end infantry gear) and saw an opportunity to do so with the resulting bad publicity by selling unmarked ammo to African warlords and arms merchants.
February 1, 2013: The Iranian currency (the rial) hit an all-time low against the dollar. It now costs about 40,000 rials to buy one dollar. Fourteen months ago it only cost 12,000. The value of the rial (in buying dollars) has dropped over 20 percent in the last week. The rising costs of imports (because you need more Iranian rials to buy dollars) means a lot of poor families cannot afford medicines. Even the hospitals are often short and the black market for medicines is back and booming. The middle class can’t buy a lot of consumer goods because of this and even the wealthy have to pay more for their goodies.
January 30, 2013: Israeli warplanes hit at least two targets in Syria (a military research facility outside Damascus and a convoy carrying weapons into Lebanon). The last time Israel carried out raids like this was in 2007, when a nuclear weapons research facility was destroyed.
January 29, 2013: The UN arms inspectors agreed with Iran that news reports of a large explosion in the underground Fordo nuclear fuel plant were false.
January 28, 2013: An Iranian rocket sent a monkey about 100 kilometers into space and returned the animal safely.
January 26, 2013: In the capital the secret police arrested twelve journalists in five pro-reform newspapers. Those arrested were accused of antirevolutionary acts.
The government declared that any country that attacks Syria is attacking Iran. That is an unusually frank admission of the relationship between Iran and Syria but it will not have much impact. Iran has been at war with the rest of the world for decades. Because the Iranian military never recovered from its disastrous 1980s war with Iraq, Iran has used Islamic terrorism as their primary weapon. Their threat to fight would, at worst, mean fewer restraints on Iranian sponsored Islamic terrorists. But others can fight this way as well. The Sunni Arabs in the region are increasingly at war with Iran and don’t want open warfare. As weak as conventional Iranian forces are, the Iranians have been defeating Arabs for thousands of years and are currently calling for Shia (Iranian) control of the Moslem holy places in Saudi Arabia. This has caused a growing unofficial war between Iran and the Gulf Arabs. The Sunni Arabs stick it to the Iranians in more subtle ways by encouraging Iranian Arabs and Sunnis to rebel. The Gulf Arabs also provide more cash and weapons support for the local opponents of pro-Iranian groups throughout the region.
January 23, 2013: Acting on a tip from the U.S., the Yemeni Navy boarded a dhow (wooden sailboat) off the coast and found several tons of Iranian weapons on board. The eight man crew was arrested and admitted they had picked up the cargo in Iran and were delivering it to an arms dealer in Yemen.
January 21, 2013: German customs officials arrested Tahmasb Mazaheri, the former (until 2008) head of the Iranian Central Bank, when a bank check (from a Venezuelan bank) for $70 million was found in his luggage. Mazaheri had not declared the check and was accused of money laundering.
January 18, 2013: A Shia propaganda video appeared on the Internet showing Iraqi Shia gunmen fighting to defend the Assad dictatorship in Syria. The Iraqi Shia were also shown cooperating with Lebanese gunmen described as members of the Shia Hezbollah militia that controls southern Lebanon. Both Hezbollah and Shia radical groups deny that they have gunmen in Syria. Many Iraqi Sunnis are fighting with the Syrian rebels, who are largely Sunni Arabs (as are about 80 percent of Syrians).
January 16, 2013: Oil exports hit 1.4 million barrels a day last month. The new sanctions came into force in July, and for August and September oil shipments fell from 2.6 million barrels a day to one million a day. But by October the aggressive efforts to arrange illegal sales increased shipments to 1.3 million barrels a day. These sales yield a lot less income, since the customers have to be offered lower prices and there are additional expenses in shipping some of the oil.