US Wants Security Council to Extend Iran Arms Embargo

The US has proposed a UN Security Council resolution condemning a devastating 2019 attack on Saudi oil facilities it blames on Iran and proposing an extension of an arms embargo against the Islamic Republic, sources said.

The embargo, put in place as part of a nuclear accord signed with Tehran in 2015, is set to expire in October, but Washington has been working to extend the ban as tensions with its arch-rival remain high.

On Friday, France, the UK and Germany—all signatories to the deal—issued a joint statement arguing against lifting the ban as scheduled, saying it could have "major implications for regional security and stability."

The US resolution—a draft of which was obtained by AFP—"condemns the attacks of September 2019 against Saudi Arabia carried out by Iran.”

It also calls for the body to "prohibit the supply, sale or transfer, direct or indirect... of weapons and related materials," excluding those that are approved with 30 days' notice.

No date has been scheduled for a vote on the resolution and it is unlikely to pass, as veto-wielding China and Russia have already spoken out against extending the embargo.

The 2019 attacks on Saudi state oil giant Aramco's facilities caused extensive damage and briefly interrupted production of half of the country's oil output.

Parts of the cruise missiles and drones used in the attacks were either made in Iran or exported there, according to a UN report based on an examination of the debris released earlier this month.

Observers say the US attempt to extend the embargo is part of efforts to re-impose UN sanctions on Iran, lifted in 2015 when the agreement was signed.

France, the UK and Germany have already rejected any "unilateral attempt" to re-impose UN sanctions on Iran.

Iran agreed with major world powers in 2015 to freeze its nuclear program in return for the lifting of punishing international sanctions.

But in 2018, US President Donald Trump pulled the United States out of the agreement and reimposed sanctions, prompting Iran to roll back its own commitments.

Photo: Wikicommons

Pompeo Lands in Saudi for Talks Focused on Iran

US Secretary of State Mike Pompeo landed in Riyadh Wednesday for talks with Saudi leaders focused on countering Tehran, his first visit since a top Iranian general's killing sent regional tensions soaring.

The top US diplomat, whose visit follows his first trip to sub-Saharan Africa, will hold talks with King Salman and his son Crown Prince Mohammed bin Salman as well as Foreign Minister Faisal bin Farhan, State Department officials said.

"We'll spend a lot of time talking about the security issues with the threat from the Islamic Republic of Iran in particular," Pompeo told reporters in the Ethiopian capital Addis Ababa before heading to Riyadh.

Pompeo said the United States was "prepared to talk anytime" to Iran but emphasised that the Iranian regime has "got to fundamentally change their behaviour".

"The pressure campaign continues. It's not just an economic pressure campaign, its diplomatic pressures, isolation through diplomacy as well," he said.

US President Donald Trump, who is closely allied with Saudi Arabia, in 2018 withdrew from a nuclear accord with Iran and imposed sweeping sanctions aimed at reducing Tehran's regional clout.

Pompeo's three-day visit to close ally Saudi Arabia comes in the wake of a US-ordered drone strike that killed Qasem Soleimani, Iran's most powerful general, as he visited Baghdad on January 3

Regional tensions rose following the killing and Iran responded with missile strikes on US forces in Iraq.

US officials blamed Iran for a September attack on Saudi oil installations, although Riyadh has since appeared keen to engage in cautious diplomacy to ease friction.

Pompeo faces a tough balancing act in Saudi Arabia as he said he would also discuss "human rights" during his visit.

The 2018 murder of Saudi journalist Jamal Khashoggi, which sparked global condemnation of the crown prince, has tested relations between the two allies.

After Riyadh, Pompeo will fly to Oman to meet the new sultan, Haitham bin Tariq, on Friday.

Pompeo will offer condolences over the death of his predecessor Qaboos, who was the Arab world's longest-serving leader and served as a go-between for Iran and the United States.

Photo: State Department

European Leaders Say Iran Behind Saudi Attack, Urge Dialogue

The leaders of France, Germany and Britain on Monday agreed that Iran carried out this month's attack on Saudi Arabian oil infrastructure and called on Tehran to choose dialogue over further "provocation."

French President Emmanuel Macron, German Chancellor Angela Merkel and British Prime Minister Boris Johnson backed the conclusion of the United States on the blasts at the Abqaiq and Khurais facilities.

"It is clear for us that Iran bears responsibility for this attack. There is no other explanation," they said in a joint statement released by France after meeting on the sidelines of the UN General Assembly.

But the three countries—which remain party to a nuclear deal with Iran from which President Donald Trump withdrew the United States—said the solution was diplomacy

"We call on Iran to commit to such a dialogue and to avoid any new provocation and escalation," they said.

"The attacks also highlight the need for a de-escalation in the region, for sustained diplomatic efforts and engagement with all sides."

The three nations said that they remained committed to the 2015 agreement with Iran that was negotiated under former president Barack Obama.

They called on Iran to come back into strict compliance.

Iran has taken several steps including installing centrifuges that are more advanced than allowed as a way to voice anger at not receiving sanctions relief promised under the deal.

Photo: IRNA

Pompeo Says U.S. Working on Diplomacy After Iran ‘War’ Act

By Mark Niquette

Secretary of State Michael Pompeo said the U.S. is “working diligently” toward a diplomatic resolution with Iran after accusing the Islamic Republic of attacks on Saudi Arabian oil fields, but that President Donald Trump is prepared to take other action if necessary.

“Make no mistake about it, if we’re unsuccessful in that and Iran continues to strike out in this way, I am confident that President Trump will make the decisions necessary to achieve our objectives,” Pompeo said on ABC’s “This Week” on Sunday, one of multiple TV appearances ahead of the United Nations General Assembly in New York this week.

State Secretary Mike Pompeo said Trump and the U.S. is working toward a diplomatic resolution with Iran, but also that the "Iranians are blood-thirsty and looking for war" in his TV rounds on Sunday

Top Pentagon officials on Friday said the U.S. will send a “moderate” number of troops to the Middle East and additional missile defense capabilities to Saudi Arabia in response to last weekend’s attack on oil facilities, which disrupted about 5% of global oil production.

Iranian Foreign Minister Mohammad Javad Zarif refused to rule out military conflict in the Middle East, saying in an interview Sunday on CBS’s “Face the Nation” that “I’m not confident that we can avoid a war.”

Asked whether he’s confident of avoiding a war, Pompeo said, “we’re working towards that.” In a interview airing on CBS, Pompeo said the U.S. will respond in a way that reflects what he called “an attack by Iran on the world” and a “state-on-state act of war.” He said the U.S. is looking for a diplomatic resolution, while “apparently the Iranians are blood-thirsty and looking for war.”

Pompeo said the U.S. maximum-pressure campaign, which includes sanctions on Iran’s central bank and sovereign-wealth fund, is working and that the Iranian economy will shrink by about 10% to 15% this year.

Treasury Secretary Steven Mnuchin, in an interview on NBC’s “Meet the Press,” said there’s still room for more sanctions.

“Although we’re pretty much maxed out on Iran, we will begin to sanction third-party entities where we see violations,” he said.

Republican Senator Lindsey Graham, chairman of the Judiciary Committee, said on Fox News’s “Sunday Morning Futures” that economic sanctions aren’t enough because Iranians “would eat grass if that’s what it took” and that military action is also needed. He suggested targeting Iran’s oil refineries and that Iran knows it would never win a war with the U.S.

“I don’t want a war with Iran, but I want them to stop, and the only way they’re going to stop is to pay a price,” Graham said. “And the price I want them to pay is to lose some of their military capability.”

Photo: State Department

Trump Announces Sanctions on Iran Central Bank for Saudi Attack

By Saleha Mohsin and Josh Wingrove

The U.S. slapped terror-related sanctions on Iran’s central bank and sovereign wealth fund on Friday in retaliation for last weekend’s attack on Saudi Arabia, moves aimed at squelching any remaining trade the country conducts with Europe and Asia.

“These are the highest sanctions ever imposed,” President Donald Trump told reporters during a meeting with Australian Prime Minister Scott Morrison at the White House. “We’ve never done it at this level.”

Friday’s action sanctions the central bank under a George W. Bush-era executive order designed to disrupt terrorist groups’ financial networks, over what the administration says is the bank’s support for the Islamic Revolutionary Guard Corps. It’s a controversial step, as sanctioning the central bank may also limit the ability to import humanitarian goods into the country.

Proponents such as Mark Dubowitz of the Foundation for Defense of Democracies argue that by linking the central bank to terrorism, the move will scare away remaining market participants and subject companies to potentially devastating secondary sanctions. It may also create a chilling effect even if a Democrat beats Trump in 2020 and seeks to re-enter the Iran nuclear deal that Trump walked away from in 2018.

“It creates a wall of market deterrence,” Dubowitz said in an interview. “When you set aside the technical gobbledygook, what’s left is that if you do business with Iran, you are supporting terrorism.”

The Treasury Department issued a statement saying Iran’s sovereign wealth fund, the National Development Fund of Iran, was also a major source of foreign currency and funding for the IRGC. The move is aimed partly at tying up any NDF money kept in overseas bank accounts.

Trump said he’ll meet Friday with his national security advisers to discuss further responses to the attack on the Saudi oil facilities, which the U.S. has blamed on Iran. He’s under pressure from hawks among congressional Republicans to order a military attack on the Islamic Republic but has resisted, and has drawn comparisons to the Iraq War that he says he opposed.

Trump said a U.S. attack would be the “easiest thing,” adding, “and maybe it’s even a natural instinct.” But he said that he was showing U.S. strength by not immediately ordering a strike. He could take out 15 different targets in Iran if he wanted to, Trump said.

“I could do it right here, in front of you, and that would be it,” he said. “It shows far more strength to do it the way we’re doing it. I think restraint is a good thing.”

More than 80% of Iran’s economy is under U.S. sanctions already, the Trump administration has said, and the U.S. is looking to target sectors that continue to function, such as trade in manufactured goods and transportation equipment. The U.S. is already sanctioning significant sectors including oil, banks and steel, leaving smaller targets including certain exports and government officials.

The U.S. has previously targeted the country’s central bank, sanctioning one of its governors and another senior official in May 2018 for allegedly providing support for terrorist activity. Tensions have steadily risen between the U.S. and Iran since 2018, when Trump abandoned the 2015 accord negotiated by President Barack Obama to curb Tehran’s nuclear weapons program and began re-imposing sanctions relaxed under the deal.

Friday’s action may also complicate plans by European nations to launch a mechanism known as Instex that would serve as a financial go-between for humanitarian trade with Iran. Iran’s counterpart to Instex, the Special Trade and Finance Institute, is closely linked to the Iranian central bank.

The Trump administration argues that there are already carve-outs for humanitarian trade with Iran and Instex isn’t needed. Critics say the new rules will only make that trade more difficult, and regular Iranians will suffer.

“The end result of this shift in policy—whether out of criminal negligence or willful vindictiveness—is likely to be pain for the Iranian people in the form of more medicine shortages for drugs produced in the West and sharply rising prices for food,” Ryan Costello, the policy director at the National Iranian American Council, said in a statement.

Photo: IRNA

Pompeo Favors 'Peaceful Resolution' to Crisis After Saudi Attack

US Secretary of State Mike Pompeo Thursday said he preferred a “peaceful resolution” to a crisis sparked by attacks on Saudi oil infrastructure, as Iran warned against “all-out war.”

Pompeo has blamed Iran for the weekend assault on two facilities which wiped out half of Saudi oil production, dismissing its denials and condemning the “act of war.”

The rhetoric has raised the risk of an unpredictable escalation in the tinderbox region where Saudi Arabia and Iran are locked in a decades-old struggle for dominance.

Visiting the United Arab Emirates, Pompeo however said his country would prefer a “peaceful” solution to the crisis.

“We’d like a peaceful resolution,” he said.

“I hope the Islamic Republic of Iran sees it the same way,” he told reporters after talks with the leaders of the United Arab Emirates.

Iran’s Foreign Minister Mohammad Javad Zarif earlier warned any US or Saudi military strike on Iran could cause “all-out war.”

“We don’t want war, we don’t want to engage in a military confrontation,” he told CNN in an interview aire Thursday.

“But we won’t blink to defend our territory.”

Pompeo arrived in Abu Dhabi from the Saudi city of Jeddah, where late Wednesday he met Crown Prince Mohammed bin Salman, the kingdom’s de-facto ruler who has said the assault poses a “real test” of global will.

The two sides agreed “the Iranian regime must be held accountable for its continued aggressive, reckless, and threatening behaviour,” State Department spokeswoman Morgan Ortagus said.

The “unacceptable and unprecedented attack… not only threatened Saudi Arabian national security, but also endangered the lives of all the American citizens living and working in Saudi Arabia,” she added.

‘Glass Towers’

Saudi officials Wednesday unveiled what they said were fragments of 25 drones and cruise missiles fired Saturday at the facilities in the country’s east, engulfing them in flames.

“The attack was launched from the north and unquestionably sponsored by Iran,” defence ministry spokesman Turki al-Maliki said, but did not say whether Saudi officials believed Iran would ultimately be found to be the culprit.

Tehran-linked Huthi rebels in Saudi Arabia’s southern neighbor Yemen have claimed responsibility, but both Washington and Riyadh have ruled that out, saying it was beyond their capabilities.

French Foreign Minister Jean-Yves Le Drian also said the Huthi claim “lacks credibility”.

The Huthis have hit dozens of targets in Saudi Arabia, and their rapidly advancing arsenal has exposed the vulnerability of the kingdom despite its vast military spending.

Huthi military spokesman Brigadier Yahya Saree said Saturday’s assault on the two facilities was launched from three locations inside Yemen, using advanced drones with long-range capabilities.

He also threatened the United Arab Emirates, a key member of the Saudi-led coalition fighting the Huthis, saying it was ready to attack dozens of targets including the skyscraper-filled cities of Dubai and Abu Dhabi.

“If you want peace and security for your facilities, and towers made of glass that cannot withstand one drone, then leave Yemen alone,” he said.

‘List of Iran Targets’ ‘

US military planners weighing retaliation have reportedly forwarded a list of Iranian targets including the Abadan oil refinery, one of the world’s largest, or Khark Island, the country’s biggest oil export facility, the New York Times said.

Other potential targets include missile launch sites and other assets of the elite Islamic Revolutionary Guard Corps, and bases in the southwest where unusual activity suggests they had a role in the strikes.

“Any strikes against Iran would almost certainly be carried out by volleys of cruise missiles from Navy vessels. Strike aircraft would be aloft to carry out attacks if Iranian retaliated against the first wave,” the newspaper said.

Cinzia Bianco, a Middle East analyst at the European Council on Foreign Relations, said the incident could “trigger an out-of-control chain of escalatory events.”

“Inside Saudi Arabia, there is uncertainty over the most appropriate course of action,” she told AFP.

“However the dominant thinking there points to the US targeting critical infrastructure in Iran as to minimise or exclude any human cost.”

Late Wednesday, CBS News cited an unnamed US official as saying Iran’s supreme leader Ayatollah Ali Khamenei approved the attack, on condition it be carried out in a way to deny Iranian involvement.

US officials quoted said the most damning evidence against Iran was unreleased satellite photos showing Iran’s Revolutionary Guard Corps making preparations for the attack at its Ahvaz airbase.

But the commander of Iran’s Revolutionary Guards, Major General Hossein Salami, said Thursday his country was “so powerful that they are forced to falsely accuse us to be behind any incident”.

An international inquiry is under way, with the the United Nations saying Thursday experts had arrived in the kingdom and begun their mission “at the invitation of the Saudi authorities”.

Trump, who has already re-imposed sanctions that have crippled Iran’s economy, promised on Wednesday to “substantially increase” the measures, winning quick praise from Riyadh.

Zarif, himself under US sanctions since July 31, described the measures as “illegal” and “inhuman” and designed to hurt ordinary citizens.

Photo: State Department

Trump Seeks New Iran Sanctions as Pompeo Consults Saudi Arabia

By Nick Wadhams, Glen Carey and Josh Wingrove

President Donald Trump said he wants tougher U.S. sanctions on Iran as his top diplomat arrived in Saudi Arabia to consult with leaders and build a case against Tehran following weekend attacks on the kingdom’s key oil facilities.

“We’ll be adding some very significant sanctions,” Trump said Wednesday in Los Angeles, adding that the administration will be announcing them over the next 48 hours.

Trump announced the plan to impose more sanctions earlier Wednesday by tweet, just hours before Secretary of State Michael Pompeo landed in Jeddah, Saudi Arabia. Pompeo told reporters that the U.S. believes with “high confidence” that Iran was behind the strikes on Saudi Aramco facilities, regardless of whether they originated in Iranian territory. The attack was initially claimed by Houthi rebels in Yemen.

“It’s not the case that you can subcontract out the devastation of 5% of the world’s oil supply,” Pompeo told reporters. He said his goal during the trip to Saudi Arabia and United Arab Emirates is to “build out a coalition to develop a plan to deter” Iran.

Trump on Wednesday signaled reluctance to engage in a military operation that could lead to a prolonged conflict.

“It’s very easy to attack,” he said, but added: “How did going into Iraq work out?”

But the president also warned that he has “plenty of time to do some dastardly things” to Iran in response to the strikes on the Aramco facilities.

‘Unquestionably’ Iran

Earlier in the day, Saudi Arabia’s defense ministry said the attacks were “unquestionably sponsored by Iran,” adding that an assessment of the parts of drones and missiles recovered indicate Iranian origin. The ministry displayed pieces of what it said was the weaponry involved.

“We were blessed that there were no Americans killed in this attack, but any time you have an act of war of this nature there’s always a risk that could happen,” Pompeo said in Jeddah.

Iran has denied involvement in the attacks, which were claimed by the Yemeni rebels allied with the Islamic Republic. Saudi defense officials, however, said the strikes came from the north, though they didn’t directly say they originated on Iranian territory, a nuance echoed by Pompeo.

West Texas Intermediate crude for October delivery declined 76 cents to $58.58 a barrel at 11:08 a.m. on the New York Mercantile Exchange.

Trump has been ramping up sanctions on the Islamic Republic since quitting the 2015 nuclear deal with Iran, including adding severe restrictions on the country’s oil sales. Additional U.S. economic sanctions could be a route to avoiding direct military conflict. While Trump initially said the U.S. is “locked and loaded” to respond to the Aramco attack, he has since signaled that he isn’t eager for another Middle East conflict.

Sanctions Targets

Iran’s economy has already been under severe pressure from existing sanctions, yet some analysts said there are still a number of potential targets for restrictions, including in the construction sector, additional companies on the Tehran stock exchange and foundations controlled by the regime or Iranian Revolutionary Guard Corps. But with the vast majority of Iran’s economy dependent on oil sales, additional sanctions may have little more than a marginal impact.

Soon after the strikes took place, Pompeo quickly blamed Tehran. The attacks crippled oil output from the world’s biggest exporter, but the international response has so far been more measured. The United Nations said it is sending a team of inspectors to investigate the incident.

Hardliners on U.S. policy toward Iran warned the president that a sanctions-only approach may embolden the regime, especially after a spate of tanker attacks in the Persian Gulf and the shooting down of an American drone over the region’s waters earlier this year.

“U.S. presidents who are unwilling to use all instruments of national power always default to sanctions,” said Mark Dubowitz, the chief executive of the Foundation for Defense of Democracies and a prime architect of U.S. sanctions against Iran. “While the administration can cause even more severe pain economically for the regime, Tehran will interpret this as a sign of American weakness, not strength.”

Trump rebuked an ally, Republican Senator Lindsey Graham of South Carolina, on Twitter on Tuesday after Graham suggested that Iran interpreted Trump’s reluctance to retaliate earlier this year for the downing of a U.S. drone as weakness.

The strikes on Saudi Arabia have diminished expectations that Trump and Iranian President Hassan Rouhani could meet on the sidelines of the UN General Assembly next week in New York.

U.S. defense officials have said they are preparing an assessment, which could be made public soon, on who was responsible for the attacks. U.S. experts are conducting an intense examination of evidence on the ground in Saudi Arabia and reviewing intelligence such as radar tracks from the region, according to the first official.

Photo: Wikicommons

Iran Warns U.S. on Retaliation as It Denies Role in Saudi Attack

By Arsalan Shahla

President Hassan Rouhani said Iran is not looking for a war in the Persian Gulf following weekend strikes on Saudi Arabia’s biggest oil installation, as the Islamic Republic sent a cable to Washington formally denying any role.

The attacks raised the specter of a broader war in the Persian Gulf as any military retaliation by the Saudis and their U.S. ally could draw in Iranian proxy groups around the region, and provoke a dramatic spike in oil prices at a vulnerable time for the world economy.

The Iranian appeals come hours before Saudi Arabia unveils what it says is evidence of Iran’s involvement in the attack, which shook crude markets and slashed output at OPEC’s largest producer. U.S. Secretary of State Michael Pompeo is also due to arrive in the kingdom on Wednesday.

Addressing a cabinet meeting, Rouhani said the assault was carried out by Yemeni Houthi rebels retaliating against Saudi Arabia’s military campaign in their country and should serve as a “warning and lesson,” according to state TV.

Iran backs the Houthis, one of several militias it supports around the region, from Lebanon to Iraq. In its note sent to the U.S. via the Swiss embassy, Iran also warned it would respond “swiftly” to any action against it. The Swiss mission has represented U.S. interests in Iran since the 1979 Islamic Revolution.

The U.S. has imposed swingeing sanctions on Iran’s economy -- especially its oil sales -- since exiting the landmark 2015 nuclear deal last year in an effort to curtail Tehran’s regional influence and military capabilities. Tightening U.S. sanctions have battered the Iranian currency, driving up prices and causing shortages. Iran is gradually scaling back its commitments under the deal and has said it will not reopen talks without sanctions relief.

The confrontation has sporadically convulsed the Gulf, with the strikes on oil tankers, an American drone and a key pipeline, pushing the region to the brink of open conflict. Saturday’s attack on the heart of the Saudi oil industry drove tensions to new heights.

While President Donald Trump hasn’t directly blamed Iran for the attacks, Pompeo has, and U.S. officials have said the location of the damage and weapons used suggest the attack was not launched from Yemen. The Houthi rebels have claimed responsibility and have carried out numerous strikes on Saudi territory during a four-year war with a military coalition led by the kingdom.

The U.S. and its Gulf allies “assumed the Iranians would take the maximum pressure without any significant reaction,” said David Roberts, an assistant professor at King’s College London who studies the Persian Gulf. “They’ve all been completely blindsided by the potent nature of the Iranian response.”

Even as Saudi oil behemoth Aramco fixes the damage at its Abqaiq facility, the possibility of further military conflict hangs over the oil market. Brent edged higher on Wednesday after tumbling Tuesday as Aramco said it had revived 41% of capacity at the crude-processing unit. It’s expected to return to pre-attack levels of about 4.9 million barrels by the end of September.

Trump —who said his country was “locked and loaded”—in the immediate aftermath of the attacks, has since dialed back his rhetoric, signaling that he expects Saudi leaders, who have bought billions of dollars of American military equipment, to lead and pay for any response.

The Pentagon is preparing a report on who was responsible and intends to make it public within 48 hours, a U.S. defense official said Tuesday. The official couldn’t confirm or deny a CBS News report that the U.S. has identified locations in southern Iran from which it believes more than 20 drones and cruise missiles were launched.

The prospect of a U.S. strike on Iran in retaliation for an attack that didn’t target Americans or even a country with which the U.S. has a defense treaty is proving divisive in Washington, with debate over whether Congressional approval would be needed.

“Trump is utterly loath to order military action near election time and the Saudis are aware ever more so of the growing vulnerability that they have,” Roberts said. “A meaningful diplomatic response is the most likely reaction from the U.S. and its allies.”

The violence has damped speculation, for now, that Trump might meet Rouhani at the annual United Nations General Assembly next week.

The president said on Tuesday that he doesn’t want to meet Rouhani in New York, as the Iranians weren’t “ready” for talks. Iranian Supreme Leader Ayatollah Ali Khamenei ruled out negotiations with Washington at “any level” while country’s economy remained under sanctions.

State-run Islamic Republic News Agency reported on Wednesday that Rouhani and Foreign Minister Mohammad Javad Zarif may cancel their visits to the UN if the U.S. doesn’t issue visas “in the next few hours” potentially closing another opening for potential dialogue.

Photo: IRNA

Iran Shows Trump That It’s Too Big to Be Crushed or Marginalized

By Marc Champion and Zainab Fattah

Earlier this year, President Donald Trump warned that “it’s going to be a bad problem for Iran if something happens.” Something big has happened with an attack on Saudi oil infrastructure, and yet the administration in Washington looks like the one with the problem.

After leading voices in the Trump administration laid the blame squarely on Iran, it isn’t obvious how the U.S. can effectively retaliate against a country that is already under maximum economic sanctions. Iran is too big for the U.S. to invade even if there were appetite among U.S. voters for another Gulf war, and has demonstrated its ability to strike back hard should the U.S. decide to escalate.

U.S. sanctions have cratered the Iranian economy. Yet administration hopes that this would lead to a popular backlash against the government in Tehran, forcing it to cave to American demands, have yet to bear fruit.

Instead, the regime has relied on responses honed over 40 years of international isolation, upping the ante to show that if the U.S. continues forcing Iranian oil exports to zero in an attempt to bankrupt its government, Iran has the power to halt the oil exports of U.S. ally Saudi Arabia, too.

“We are caught in this vicious circle,” said Ali Vaez, Iran Project Director at the Brussels-based International Crisis Group. “The U.S. has to realize that Iran is part of this region. Iran cannot be excised.”

Revolutionary Guard

Rather than retreat in the face of withering revenues, which was a part of the logic that informed U.S. withdrawal from the 2015 nuclear deal that had lifted sanctions, the elite Islamic Revolutionary Guard Corps is increasingly active in Iraq, Lebanon, Syria, Yemen and even Afghanistan.

For the Guard—which has long defined itself as the Middle East’s ultimate bulwark against U.S. military power—sanctions are almost seen as a call to arms.

“Saudi Arabia’s Backbone is Broken; The U.S. and al Saud are in Mourning!” crowed the front page headline in Monday’s edition of Kayhan newspaper, whose chief editor is directly appointed by Iran’s Supreme Leader Ayatollah Ali Khamenei.

A 2017 clip of Saudi Crown Prince Mohammad bin Salman saying “we won’t wait for the war to come to Saudi Arabia, we’ll take the war to Iran,” has been widely recirculated and mocked in recent days. “Well Bin Salman my brother, tell me how’s Aramco doing?” said one Twitter user’s caption for the clip, referring to Saudi Arabia’s leviathan oil company.

Regional Influence

That bravado is ultimately misplaced, because nothing Iran has done to date has brought the lifting of sanctions—the central problem for the country of 82 million as a whole—any closer, according to Michael Knights, senior fellow at the Washington Institute for Near East Policy. At the same time, Iran’s capacity to make its interests felt across the region has been on full display.

“We have a sequence of events since about May 12, where the Iranians have pushed on one red line and relationship after another,” said Knights. “From a military perspective it has really been superbly executed, from tanker attacks that didn’t spill a drop of oil into the Gulf, to these now, which were of the same quality that the U.S. would have displayed in the mid-90s, using the cruise missiles it had then.”

Each tactical success has further raised Iran’s prestige in the region, a higher priority for regime conservatives and the IRGC than restoring the economy, according to Knights.

That forward-leaning approach is part of a longer term game plan, as Iran seeks to benefit from a gradual U.S. withdrawal from the region that’s likely to continue regardless of who is elected president in 2020.

“The U.S. has been looking for years for a re-posturing in the Middle East that would entail a lighter commitment on their end,” said Cinzia Bianco, Arabian Peninsula research fellow at the European Council on Foreign Relations in Berlin, a think tank. “This is crucial to what happened with Aramco, because the IRGC is fully aware of this context and is trying to test its new limitations.”

Balance of Power

The attack could have a lasting impact on the balance of power in the region, because it cruelly exposed the scale of an ongoing change in the U.S.-Saudi relationship, according to Pierre Noel, senior fellow for economic and energy security at the International Institute for Security studies, in London. “The Saudis lost in 30 minutes the war they had been preparing for for 50 years,” Noel said in a briefing on Tuesday. “They lost 50 percent of their national oil output, to Iran, and without the U.S. being immediately able or willing to offer cover.”

That has rendered empty, or at least severely limited, the absolute U.S. security guarantee for Saudi Arabia and its oil fields that Saudi and other countries in the region have long assumed.

Much of what happens next will depend on how hard the U.S. and Saudi decide to push their case that Iran, rather than its Houthi proxies in Yemen, was responsible for Saturday’s bombing of Saudi Arabia’s oil infrastructure at Abqaiq. If the U.S. decides to force the issue and produce hard evidence in public, the pressure to be seen to retaliate will be high, according to Knights and others.

Iran has denied responsibility for the attack, which the Houthis have claimed for themselves. It won’t negotiate with the U.S. at any level, Khamenei said on Tuesday. That would appear to rule out a meeting of Trump and President Hassan Rouhani at the UN General Assembly in New York this month.

Missiles and Drones

The European signatories to the Iran nuclear deal that Trump abandoned unilaterally last year in a precursor to re-imposing sanctions are content to stay on the fence for now. The governments of France and Germany, both of which were instrumental in establishing a special purpose vehicle meant to aid Iran over U.S. opposition, condemned the attacks without laying blame.

Iran’s military, at least, appears to be calculating that Trump will prefer to leave the case inconclusive and stick with less risky, costly and unpopular alternatives to an act of war.

“It’s necessary for everyone to know that all U.S. bases and their vessels are within a 2,000 kilometer (1,240 mile) reach of our missiles,” the IRGC’s aerospace forces commander, Brig. Gen. Amirali Hajizadeh said in an interview with the Iranian news agency, Tasnim, on Sunday.

Iran has about 50 medium range ballistic missiles deployed and others in development, as well as about 130 drones, according to the International Institute for Strategic Studies in London. “Neither we nor the Americans have any intention of going to war,” the brigadier general said.

Photo: IRNA