Iran: Place Your Bets


December 7, 2015: The sanctions removal deal was acceptable inside Iran because it eased an economic crises that even the hardline religious conservatives had to admit was causing more and more hardship to their supporters as well as to the growing reformist majority. If the sanctions deal is implemented (on schedule through the first half of 2016) the conservatives believe they have the muscle to suppress any popular moves against the religious dictatorship. It is also believed (mainly by the more reform minded) that the removal of sanctions means the Iranian government can rely less on using terror and other forms of official suppression to keep popular discontent under control. More cash in the economy means most Iranians will be less angry at the government. Still, the basic problem, for all the things that bother Iranians, is that an Islamic conservative minority has veto power over any attempts at reform from within. Independent reformers are considered enemies of the state by the ruling clerics. Most Iranians just want a better life. The supply of peaceful solutions is drying up. After that comes another revolution and even most of the ruling clergy can see and appreciate that. There are some more complications. Half the population consists of ethnic minorities (mainly Turks and Arabs), and some of these groups (Arabs, Kurds and Baluchis) are getting more restive and violent (for different reasons). These minorities oppose the treaty as well because they want revolution, not peace and contentment. Meanwhile, the Islamic conservatives believe priority should be support for pro-Shia terrorism overseas and building a stronger military (including nuclear weapons) at home, rather than concentrating on improving the economy and living standards. The new treaty shows that the government is looking out for the people while still preserving its power to mess with the neighbors and the West.

Even with the sanctions lifted Iran still has the problem with the Saudi ability to keep the price of oil so low that Iran cannot maintain living standards or modernization of their military and oil industry. The nightmare scenario is the Arabs standing up to Iranian nuclear threats. The Saudi price war makes many Iranians more eager to get nukes because that would give them a weapon that might be capable of getting the Saudis to back off and let the price of oil rise (by cutting Saudi production). But there is no guarantee that would work. Even if it does there is the problem with the growing use of fracking to obtain oil and gas trapped in shale formations. These shale formations are found worldwide and production from this source will ultimately lower the value of Iranian (and Arab and Russian) oil fields. It gets worse. Oil industry experts point out that lifting the sanctions will drive the world price of oil even lower, for a while at least. That’s because Iran has at least 30 million barrels of oil stored in tankers just waiting for sanctions to be lifted so this stuff can be delivered. Iran has even more oil stored in land-based facilities.

The Saudis say their oil price war is directed at American frackers but savvy Iranians (especially those with kin in America) know that is a lie or a delusion on the part of the Saudis. The American oil industry has proved itself very resilient and innovative since the Americans invented the oil business in the 19th century. The frackers, as expected, shut down much of their production as it got unprofitable but are hibernating, not dying. Iranians believe they are the real target of the Saudi oil price campaign because low oil prices (from a 2014 peak of $120 a barrel/159 liters to less than $40 now) keeps Iran weak. At the same time the math indicates that the Saudis cannot keep it up for more than another five or ten years. At that point the Saudis run out of cash reserves and borrowing ability. The Saudis are betting that Iran will crack first while the Iranians believe they can outlast the Saudis. Place your bets.

Meanwhile Iranian conservatives continue to use violence against public (and often legal) demonstrations calling for reform and an end to the oppressive rule of the Revolutionary Guard (whose loyalty is to the clerics who run the country) and the Basij (a part time militia used by the clerics to terrorize the population into obedience). Despite the popularity of the nuclear program, the number of Iranians unhappy with their government continues to increase. This despite the hopeful attitude that the lifting of sanctions will bring more prosperity. Thus the government has become more violent against reformers and those who openly complain. For most Iranians this means unpleasant encounters with the secret police, the religious police or groups of Basij who roam the streets attacking “enemies of the state.” This street violence is increasingly common. This is believed to be the result of conservatives fearing that, despite control over who can run, the upcoming national elections will put more “less conservatives conservatives” in parliament and make the reformers stronger. Iranian religious conservatives, unlike many Arab conservatives, are very pro-technology. Because of that the religious dictatorship uses surveys and a large informer network to monitor actual public opinion and they believe that the huge post-Iraq war (which ended in 1989) generation wants change and within that generation reformers far outnumber religious conservatives. One complaint of the reformers is the huge financial empire the religious conservatives have built up since the 1980s by taking over companies for a lot of largely bogus reasons. These huge holdings make the religious conservatives much wealthier, on average, than ordinary Iranians and that is a very unpopular situation. Too much reform would threaten that cozy, and quite corrupt, arrangement.

In Syria the arrival of Russian forces and the growing international anti-ISIL (al Qaeda in Iraq and the Levant) coalition has taken a lot of pressure off the Assad government. Assad forces are gaining ground in the north and the NATO coalition is bombing ISIL targets with greater effect. That’s because recent ISIL terror attacks in the West led NATO to ease its ROE (Rules of Engagement) to ignore the ISIL use of human shields and hit ISIL targets wherever they are. Despite these gains Russia and Iran do not see complete victory for the Assads and apparently agree that a negotiated peace deal is possible. Iran has persuaded Russia to drop support for removing the Assad government from power in order to get such a deal. At one point Russia was proposing a deal that would remove the Assads but leave the Shia dominated Baath party in charge. Iran did not believe abandoning the Assads was a price worth paying to achieve peace and now Russia openly agrees. In Syria one thing everyone can agree on is that ISIL has to go. The main stumbling block here is that many of the non-ISIL Islamic terrorist groups are not in agreement with each other or anyone else and believe they are on a Mission From God and cannot be expected to compromise. Negotiating with these groups is difficult and often impossible. Iran is also an Islamic terrorist organization, but one that is willing to make deals. This involves negotiating settlements in disputes with allies. One such dispute involves the Iranian supported and trained Shia militias in Syria. Russia wants to incorporate these into the Syrian armed forces, which makes sense from a military point of view. But Iran wants to maintain Iranian control over these militias and turn them into something similar to Hezbollah in Lebanon. This would mean the Syrian Hezbollah would be, like the Lebanese original, dependent on Iran for much of its cash and supplies and would, in turn, obey Iran even if asked to do something the Syrian government opposed. The Assads do not want this but given their current desperate situation they have to depend on Russia to oppose Iran on this issue.

Iranian power and potential in the Middle East has led to a curious alliance with Iran, Russia and China becoming allies in part because they are all hostile to the West and all the victims of some kind of Western sanctions. Iran believes that the end of economic sanctions on Iran in 2016 will enable trade with Russia to more than double by 2018. China stands ready to invest billions in Iran. Russia needs the business because the Russian economic sanctions are still in place. These economic links creates a coalition of three nations (Iran, Russia and China) that are all accused of armed aggression against their neighbors and increasingly isolated from the rest of the world because of it.  Each of these three aggressors blames others for their situation. Russia insists that NATO is engaged in a scheme to surround and strangle Russia. China insists that long dormant territorial (except, for now, the ones with Russia) claims be resolved now and in China’s favor. The claims on India and the South China Sea are seen as illegal by the victims and international law. China ignores these issues as irrelevant. Iran has claims on Saudi Arabia, all in the name of religion because the Shia Iranians believe they would be more effective guardians of Islam’s most holy places in Mecca and Medina. Less loudly Iran believes it would make better use of Saudi oil as well. Iran believes the Arabs are resisting these propositions mainly because of pressure from the West and the United States. China finds itself allied with some powerful but dangerous friends.

UN organized peace talks between Iran backed Shia rebels and the Yemen government will finally begin on December 15th. For most Gulf oil states the war in Yemen is more important than the fight against ISIL in Iraq and Syria. That’s because the Arabs see Yemen as a bold Iranian attempt to seize control of the most populous, but poorest, country in the Arabian Peninsula. The Arabs were shocked at how close Iran came to succeeding. The scope of the Arab involvement in Yemen can be seen by the fact that for the first time since 1991 these Arab states have sent their regular troops (as opposed to a few commandos) into combat. Although these Arab states publicly sent their warplanes to join the American led coalition bombing ISIL in Iraq and Syria, soon after the Arab coalition aircraft began attack Shia rebels in March the Arab warplanes began disappearing from Iraq and Syria and now all are devoted to attacking targets in Yemen and keeping an eye on Iran. For the Arabs Iran is, and always has been, the most dangerous foe and defeating Iran in Yemen is a big deal.

December 6, 2015: In the southeast police found and disabled a large (21 kg/46 pounds) bomb near the Pakistani border. The bomb apparently belonged to Baluchi Sunni rebels who operate in the area.

Turkey went public with its anger over Iranian leaders openly accusing Turkey of supporting ISIL by allowing ISIL to smuggle oil into Turkey and sell it on the black market. There has always been a lot of smuggling activity in Turkey, something which Iran has taken advantage of. The Turks can restrict but not stop the smuggling of some things; like Kurdish separatists and anti-Turk Islamic terrorists. The Turks consider Iran unfair in accusing the Turks of doing something everyone knows is impossible. Then again Iran and Turkey have a long history of supporting rebels in each other’s territory. This is an ancient tactic but the Turks point out that ISIL is hostile to both the Turkish and Iranian governments. The Turks made no mention of the accusation, throughout the Middle East, that ISIL is the creation of the United States and Israel and secretly supported by those two countries as part of an effort to destroy Islam.

December 5, 2015: In Yemen government forces seized several tons of Iranian weapons and ammo being hidden in six trucks carrying commercial goods. The drivers picked up the weapons at a small coastal town in southern Yemen where they had apparently gotten past the Arab/U.S. naval blockade, probably using fishing boats of the numerous small wooden coastal transports. That blockade has been largely, but obviously not entirely effective. The weapons were headed for the Iran backed Shia rebels.

December 4, 2015: Russia announced that deliveries of the long delayed (since 2007) S-300 anti-aircraft missile systems Iran had. Iran will have everything by 2017. The S-300 version Iran is receiving can use the latest S-300 missiles with a range of 200 kilometers. The new contract was signed in October and Russia now expects to be the major supplier of weapons to Iran once the sanctions are lifted. Russia and Iran have settled disputes over the 2007 S-300 contracts.

November 30, 2015: The government announced that another IRGC (Iranian Revolutionary Guard Corps) commander (a colonel) had been killed in Syria on the 27th. That makes at least 70 Iranians that have died in Syria since October. Before the Russian intervention there the government played down Iranian deaths in Syria and denied there were many Iranians there at all. Now Iran admits that their troops have been actively involved in Syria since 2013 and nearly 300 have died so far. A thousand or more Iran recruited and supported foreign mercenaries in Syria have also died.

November 24, 2015: Iranian media revealed that the commander of the Quds Force, general Suleimani, was wounded in Syria on November 12th. There is some debate over how serious his wounds are. Suleimani has spent a lot of time in Syria since 2012. He is responsible for creating the Iranian mercenary force (currently over 10,000 fighters) all recruited and trained by the Quds Force. The Quds Force specializes in this sort of thing. In 2012 the Revolutionary Guards commander openly bragged that members of the Quds Force were operating in Syria. Quds has long been Iran's international terrorism support organization. The Quds Force supplies weapons to the Afghan and Pakistani Taliban as well as Islamic radicals in Somalia, Iraq and elsewhere. Quds has been advising Syrian forces and occasionally helping with raids and interrogations. Iran is also bringing in some badly needed special weapons and equipment.  As part of his duties in Syria Suleimani has made at least two semi-secret trips to the Russian capital recently. Suleimani is currently back in Iran receiving medical treatment in a hospital. The government denied that Suleimani had been injured.

November 22, 2015: Israel believes that the Syrian government has, since 2011, used about 90 percent of its operational ballistic missiles against rebels. While Israel has bombed several attempts to move some of the remaining ballistic missiles to Lebanon, Israel believes it is possible that Hezbollah may have gotten some of these missiles to bunkers in southern Lebanon. Iran can provide personnel to help train Hezbollah on how to maintain and use the missiles. The Israeli air strike in Syria on November 2nd was apparently an effort to destroy ballistic missiles being moved to Lebanon. Israel also believes that Hezbollah now has 150,000 other rockets, most of them short range (20 kilometers or less) installed along the border, often in or close to homes and government buildings. Because of its commitments in Syria Hezbollah is not interested in another war with Israel just now but that attitude is expected to change depending on how the war in Syria ends.





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