In Tehran, Economic Alarm Outweighs Fear of Conflict With Trump

By Golnar Motevalli, Glen Carey and Ladane Nasseri

In the Motahari commercial district of central Tehran, Mohammad Mohammadzadeh is more concerned about soaring prices than the threat of war with America.

Folding a pile of documents in his empty printing shop, Mohammadzadeh lists the challenges facing his business, including a 10-fold increase in the cost of ink cartridges, and bemoans the lack of help from Iran’s government. He regards the deteriorating state of relations with the U.S. with wearied resignation.

“The U.S. just talks and talks and their words are meaningless now,” he said, as heavy traffic crawled past the banks, government offices and car showrooms lining the congested boulevard outside. “What can America do that they haven’t done before? They’ve been doing this sort of thing for 40 years.”

President Donald Trump and Iran’s Supreme Leader Ayatollah Ali Khamenei both say that war is not on the horizon. But with no immediate prospect of talks and lacking any obvious back channels of communication, the void is filled by a history of mutual enmity.

The U.S. has chosen “bullying and force” in its approach to Iran rather than engaging with respect, said Diako Hosseini, director of the world studies program at the Center for Strategic Studies in Tehran, which is affiliated with Iran’s presidential office. “This approach won’t yield results and can bring the situation close to a dangerous juncture.”

Perilous Drift

Breaking out of the cycle of antipathy is all the harder because Iran is unsure of Trump’s endgame—Iranian concessions or regime change—and has declined to heed U.S. calls to come to the negotiating table under duress. Tehran will take Trump’s calls for dialogue seriously “when it becomes clear who it is that Iran’s speaking to and to which U.S. policy it needs to respond,” said Hosseini.

The sense of a dangerous drift is being compounded by volleys of belligerent rhetoric lobbed from both sides. An adviser to Iranian President Hassan Rouhani, Hesameddin Ashena, taunted Trump on Twitter with the prospect of war, adding an apparent reference to National Security Adviser John Bolton, regarded as a leading Iran hawk.

In Washington the same day, Trump said that he’d send “a hell of a lot more” than 120,000 troops to the Middle East in the event of hostilities, in the same breath rejecting as “fake news” a report that his administration was planning for war.

Amid the saber-rattling, there are confused signs on the ground, whether real or intended to raise pressure. The State Department told all “non-emergency U.S. government employees” to leave Iran’s neighbor Iraq on Wednesday. The order came after the White House expedited the planned deployment of the USS Abraham Lincoln Carrier Strike Group to the Middle East in response to what it called “troubling and escalatory indications and warnings” from Iran.

‘Rush to War’

That version of events was contradicted by the U.K. deputy commander of the anti-Islamic State coalition, Major General Chris Ghika, who told reporters at the Pentagon there was “no increased threat from Iranian-backed forces in Iraq and Syria.” U.S. Central Command responded with a statement disputing the allied commander’s remarks.

In the Black Sea resort of Sochi, Secretary of State Michael Pompeo said after meeting with Russian Foreign Minister Sergei Lavrov that the U.S. “fundamentally doesn’t want war with Iran.” Democratic presidential candidate Bernie Sanders posted a Twitter message anyway warning against “this disastrous rush to war.”

Trump triggered the impasse last year when he withdrew from the 2015 nuclear accord with Iran despite personal lobbying by German Chancellor Angela Merkel and French President Emmanuel Macron. The U.S. reintroduced sanctions on Iran, sending the economy and rial currency into a tail spin and prices of basic goods surging beyond the reach of many.

It also warned Europe against trying to preserve the accord, imposing secondary sanctions to punish companies doing business with Tehran. That has left European signatories Germany, France and the U.K. frustrated with Washington, squeezed by Iran and with little room to act as intermediaries to ratchet back tensions.

‘Call Me’

German Deputy Foreign Minister Niels Annen used a speech in Berlin on Wednesday to blast the U.S. position as “short-term and inconsiderate of interests of some of its closest partners.”

Trump has said he’s willing to talk to Iranian leaders, including telling them last week to “call me,” but Iran insists negotiations are only possible after the U.S. has returned to the nuclear deal.

The accord “complies with the expectations that the American president recently mentioned—that Iran doesn’t attempt to seek nuclear weapons,” Iran’s Vice President Masoumeh Ebtekar said in an interview in Tehran. “If they go back to the original position that they had at the beginning of their government then yes, it can be considered.”

Oil Assets

Two attacks on Saudi oil infrastructure in three days have only heightened the sense of confusion. On Tuesday, a rebel group in Yemen that’s backed by Iran claimed responsibility for drone attacks that targeted two pumping stations in Saudi Arabia. That came two days after the United Arab Emirates said four ships were damaged in an unexplained incident near the Strait of Hormuz, the world’s most important choke point for oil shipments.

One undeniable reality is the impact of U.S. sanctions, including on Iranian oil. The Trump administration sought to keep up the pressure by announcing fresh measures this month targeting Iran’s copper, iron, steel and aluminum sectors. The International Energy Agency forecast that crude production in Iran, the fifth-largest OPEC member, could fall in May to the lowest since the Iran-Iraq war of the 1980s.

That’s a reminder to Tehran of the Reagan administration’s backing for Saddam Hussein in his eight-year war against Iran. More than 1 million died on both sides in the conflict, some as a result of exposure to chemical weapons used by Saddam against Iranian urban centers and troops.

CIA-Backed Coup

For Iran, it’s one example of the long-term hostility the U.S. has shown the Islamic Republic, going back as far as the CIA-supported 1953 coup that toppled democratically elected Prime Minister Mohammed Mossadegh and installed Shah Mohammed Reza Pahlavi. The Shah was ousted in the 1979 revolution in a multi-party political revolt that ultimately created the current Islamic regime in Tehran.

For the U.S. administration, including Trump and his advisers, there is a deep suspicion of Iranian behavior, grounded in the 1979 hostage crisis when Iranian students took 52 American diplomats captive and held them for 444 days in Tehran.

The Carter administration formally cut ties with Iran and put it under economic embargo in April 1980. Weeks later, a U.S. military effort to free the hostages failed after a helicopter used in the operation collided with a transport plane, killing eight American servicemen and an Iranian civilian. Two other helicopters suffered mechanical defects. Official relations have never been restored.

‘Horrible’ Deal

Trump’s predecessor, President Barack Obama, sought to constrain Iran’s nuclear program by persuading the country to change its policies through strengthening its links with the outside world, culminating in the nuclear accord. Trump abandoned it as a “horrible” deal.

“The Iranians have for decades believed that the United States wanted regime change,” said James M. Dorsey, senior fellow at Singapore’s S. Rajaratnam School of International Studies and its Middle East Institute. “The nuclear agreement appeared to suggest that an accommodation may be possible. Trump is a return to square one.”

In Tehran, Maryam, who didn’t want to give her surname because of the sensitivities of speaking with foreign media, sat behind a desk working on the accounts of a small marketing firm. She said her “real fear” is that the economic situation deteriorates to the extent that Iran shares Venezuela’s fate. She isn’t worried about war, citing European and Russian efforts to prevent it, and is instead holding out for talks.

“They might be convinced that they need to sit down and talk, not over the nuclear deal but just over these current tensions,” she said. “In terms of how bad things are now between the two countries, they need to talk.”

Photo: Bloomberg

Trump Says Iran Will `Suffer Greatly' If U.S. Is Provoked

By Margaret Talev in Washington D.C.

President Donald Trump warned Iran against a military provocation and said the country “will suffer greatly” if hostilities break out with the U.S.

“We’ll see what happens with Iran. If they do anything it’ll be a very bad mistake, if they do anything,” Trump told reporters on Monday during a meeting with Hungarian Prime Minister Viktor Orban at the White House.

“I’m hearing little stories about Iran,” Trump added. “If they do anything they will suffer greatly.”

Saudi Arabia claimed that two of its oil tankers were attacked on Sunday while sailing toward the Persian Gulf. The U.A.E. foreign ministry on Sunday reported that four commercial ships were attacked by an unknown adversary.

The precise nature of the incident remained unclear. Saudi Arabia’s state run Saudi Press Agency described it as “a sabotage attack.”

Iran’s Foreign Ministry Spokesman Abbas Mousavi described the maritime incident as “concerning and regrettable” and called for efforts to shed light on what exactly happened, the semi-official Tasnim News reported. He warned against “foreign seditious plots to upset the region’s security and stability.”

Tensions are rising between the U.S. and Iran after the Trump administration earlier this month ended exceptions to U.S. sanctions on Iranian oil sales. The Islamic Republic has threatened to block oil shipments through the Strait of Hormuz and has said it may increase uranium enrichment beyond limits allowed under the 2015 nuclear deal that Trump abandoned.

U.S. National Security Adviser John Bolton said last week that an aircraft carrier and bombers would be deployed to the region to counter unspecific Iranian threats.

Asked what Iran should be worried the U.S. might do, the president said: “You can figure it out yourself. They know what I mean.”

Photo: White House

Iran Tells Trump: Don't Wait for Us to Pick Up the Phone

By Golnar Motevalli in Tehran

Iranian officials rebuffed President Donald Trump’s suggestion that they call him to try to defuse frictions as the U.S. ratcheted up its actions against Tehran.

Several top Iranian aides and lawmakers predicted Sunday that the current tensions wouldn’t lead to war, calling the U.S. deployment of an aircraft carrier, warship, bomber jets and missile defenses to the Middle East a propaganda stunt. Antagonism between the countries, already high, has worsened this month since Trump eliminated exceptions to U.S. sanctions on Iranian oil. The Islamic Republic responded by threatening to scale back its obligations under the 2015 nuclear deal.

“Trump has not only shown that he has no respect for the signature of the previous U.S. government but that he’s willing to violate UN Security Council resolutions and other international agreements,” said Kamal Kharazi, the head of a council that advises Supreme Leader Ayatollah Ali Khamenei, according to the Islamic Students’ News Agency.

Hours earlier, U.S. Secretary of State Mike Pompeo repeated Trump’s offer to chat to try to sort out differences. The U.S. has claimed, with no details, that Iran has been mobilizing proxies in Iraq and Syria to attack its forces, and its new deployments have stirred talk of war.

“The Americans know that no other war will bring about their defeat to such an extent and that’s why there won’t be a war, because war is not part of the U.S. strategy,” Heshmatollah Falahatpisheh, the head of Iran’s parliamentary commission for national security and foreign affairs, said in a speech before lawmakers, according to ISNA.

“Nobody is going to call Trump, and eventually the Americans will be forced to raise the issue of negotiations with Iran in a serious way,” he added.

Trump has made confronting Iran the linchpin of his Middle East policy, and his withdrawal from the nuclear deal and reimposition of sanctions meant to choke off Iranian oil exports and access to international banks has pounded the Islamic Republic’s economy. Tehran responded to the U.S. removal of sanctions waivers and the new military deployments by threatening to stop abiding by the nuclear deal’s limitations on uranium enrichment if Europe doesn’t remove obstacles to foreign investment into Iran and ease the flow of Iranian oil within 60 days.

While Iran has always denied its nuclear program had a military component, its uranium enrichment activities had been controversial because Western powers said it could potentially be used in bombmaking, so the threat to abandon limits drew another round of U.S. sanctions, this time on Iranian metals.

Kharazi said Europe could show its willingness to keep the nuclear accord alive by making a trade channel for Iran operational. But the economic sanctions Trump imposed last year have made it tough, if not impossible, for European companies and banks to risk defying the U.S. and getting caught in its sanctions net.

Photo: IRNA

Trump Says 'Open to Talk' to Iran

US President Donald Trump said Thursday that he is open to talks with the Iranian leadership, amid mounting tensions between Washington and Tehran.

"What I would like to see with Iran, I would like to see them call me," Trump told reporters at the White House.

"We don't want them to have nuclear weapons—not much to ask," he said.

The US president also launched an extraordinary attack on John Kerry, claiming that the former US secretary of state was in touch with Iranian leaders and had told them "not to call."

“John Kerry, he speaks to them a lot," Trump said. "He tells them not to call.

Trump claimed this was a violation of the Logan Act, which prohibits private US citizens from negotiating with foreign governments.

"Frankly, he should be prosecuted on that," he said.

"But they should call," Trump said. "If they do, we are open to talk to them.

The United States has deployed an aircraft carrier to the Gulf amid the rising tensions, but Trump said Washington was not looking for a conflict with Tehran. 

"I want them to be strong and great, to have a great economy," Trump said, adding that "we can make a fair deal."

Prosecutions of US citizens under the Logan Act, which was enacted in 1799, are extremely rare.

Kerry, as secretary of state under president Barack Obama, was involved in negotiating the agreement aimed at curtailing Tehran's nuclear program.

The 2015 JCPOA, or Joint Comprehensive Plan of Action, between Iran and world powers including the EU offered sanctions relief to the Islamic republic for scaling back its nuclear program.

Trump pulled the United States out of the agreement in May of last year and reinstated unilateral economic sanctions.

On Wednesday, President Hassan Rouhani said Iran would no longer implement parts of the deal and threatened to go further if the remaining members of the pact failed to deliver sanctions relief to counterbalance Trump's renewed assault on the Iranian economy within 60 days.

A spokesman for Kerry condemned Trump's remarks as "theater."

"Everything President Trump said today is simply wrong, end of story," the spokesman said in a statement. 

"He's wrong about the facts, wrong about the law, and sadly he's been wrong about how to use diplomacy to keep America safe.

"Secretary Kerry helped negotiate a nuclear agreement that worked to solve an intractable problem," the statement said. "The world supported it then and supports it still.

"We'd hope the President would focus on solving foreign policy problems for America instead of attacking his predecessors for theater." 

Photo: Wikicommons

US Sending B-52s to Middle East Against Iran 'Threat'

The US Air Force is deploying massive B-52 Stratofortress bombers to the Gulf in response to an alleged possible plan by Iran to attack American forces in the region, the Pentagon said Tuesday.

Several nuclear-capable B-52s are heading to the region along with an aircraft carrier task force following what the Defense Department called "recent and clear indications that Iranian and Iranian proxy forces were making preparations to possibly attack US forces."

"The deployment of the USS Abraham Lincoln Carrier Strike Group and a bomber task force are considered a prudent step in response to indications of heightened Iranian readiness to conduct offensive operations against US forces and our interests," said acting Pentagon spokesman Charles Summers in a statement.

 "We emphasize the White House statement that we do not seek war with the Iranian regime, but we will defend US personnel, our allies and our interests in the region."

The deployment was first announced late Sunday by John Bolton, President Donald Trump's national security advisor, who said the move was "a clear and unmistakable message to the Iranian regime that any attack on United States interests or on those of our allies will be met with unrelenting force."

The US move comes in response to intelligence about a threat orchestrated by Iran, officials said, but details of the threat have not been disclosed.

Navy Captain Bill Urban, the spokesman for the US military's Central Command, which spans the Middle east, said the threat could be land-based or maritime.

He said the Lincoln strike group was already scheduled to head to the region on long-planned deployment but that its arrival in the Gulf has been accelerated due to the threat.

That led to the cancellation of a planned port visit by the Lincoln to Split, Croatia.

The multinational carrier group, including several ships, multiple types of aircraft, and 6,000 personnel, will be deployed "where it will best be able to protect US forces and interests in the region and to deter any aggression."

The deployment comes a year after Trump pulled the United States out of a multinational accord under which Tehran drastically scaled back its sensitive nuclear work.

Since then, the Trump administration has ramped up menacing rhetoric against Iran while tightening economic sanctions on the country.

Photo: Wikicommons

Iran Set to Scale Back Nuclear Commitments as U.S. Tensions Rise

Iran signaled Monday that it may scale back some commitments made as part of the 2015 nuclear deal in response to tightening U.S. sanctions, a move that could escalate tensions after the Trump administration deployed an aircraft carrier to the Gulf.

Iran does not plan to follow Trump in abandoning the accord, which curbed its nuclear program in return for an end to some sanctions, but is set to make minor and general reductions to some of its commitments, an Iranian official involved with its implementation was cited as saying by the state-run Iranian Students News Agency.

President Hassan Rouhani is expected to make the announcement via state media on Wednesday and roll out the steps, the official said. The plans have been communicated informally to European Union officials, the official added without giving details.

The Wall Street Journal cited European diplomats as saying that Iran may step up research into centrifuges that could produce highly enriched uranium faster. It wasn’t clear if such a measure would represent a clear breach of the deal or be largely symbolic in its significance.

The nuclear accord, reached in 2015 after years of painstaking multi-lateral negotiations, put strict limits on Iran’s nuclear activities in return for an easing of years of sanctions.

President Donald Trump withdrew from the accord a year ago, reimposed measures against Iran and has made confronting the Islamic Republic a cornerstone of his foreign policy, designating its elite Revolutionary Guard Corps a terrorist entity and sending the USS Abraham Lincoln and a bomber force to the Gulf as a warning.

The Trump administration ratcheted up economic pressure early this month by letting waivers allowing eight governments to import Iranian oil expire. It has said its goal is to cut Iran’s oil exports to zero, part of a bid to force Tehran to change its policy in the Middle East, including its support for Houthi rebels in Yemen and Hezbollah, which the U.S. and some other nations consider a terrorist group.

European signatories of the nuclear deal have stuck with it and pledged to find ways to ease the impact of U.S. measures and ensure Iran gets some benefit from continuing to meet its commitments. Those efforts have proved inconclusive so far, however.

Representatives of the European Union, the French, German and British governments and Iran are scheduled to meet on Tuesday in Brussels to discuss their joint efforts and how to make operational a special purpose vehicle set up by the Europeans to facilitate trade with the country, according to an official from the bloc.

The official cited the need for mechanisms to be put in place for the EU-based Instrument for Supporting Trade Exchanges—or INSTEX—and its Iranian counterpart. It was not clear whether Iran’s plans to scale back on some of its commitments under the nuclear accord would be discussed or how they might affect European policy.

Photo: IRNA

U.S. to Extend Most Key Waivers Linked to Iran's Nuclear Program

The Trump administration will renew several key waivers that allow Iran to keep operating a limited civilian nuclear program, a move that heads off a clash with European allies and Tehran over the fate of a 2015 deal that Trump abandoned last year.

The U.S. is extending waivers that the administration had previously granted allowing nations that remain in the deal to engage in nonproliferation activities and nuclear research at three sites—Fordow, Bushehr and Arak—without facing sanctions, Assistant Secretary of State Christopher Ford said Friday. Instead of granting the waivers for 180 days, the administration will shorten their term to 90 days.

Two other waivers, allowing Iran to ship surplus heavy water to Oman and to ship out any enriched uranium that exceeds the 300 kilogram limit in exchange for natural, or “yellowcake” uranium, will be revoked. Those were allowed under the Joint Comprehensive Plan of Action, the 2015 accord that President Donald Trump withdrew from a year ago.

“We are tightening restrictions on Iran’s nuclear program as part of our pressure campaign,” Brian Hook, the State Department’s special representative for Iran, said in an interview. “Iran cannot have any path to a nuclear weapon."

Photo: IRNA

In Iran, It's Trump's America That Looks Like a Rogue State

“Who’s not acting like a normal state?” The rhetorical question from Iran’s foreign minister to a New York audience took aim at President Donald Trump’s administration for exiting global treaties on issues from arms control to climate change. Yet foremost in Mohammed Javad Zarif’s mind was the U.S. decision to rip itself free from the 2015 nuclear accord.

Trump blames the breakdown on Iranian military meddling in the Middle East, and he’s struck at the nation’s economic jugular to try and force it to change behavior. But his riding roughshod over diplomatic agreements swung the pendulum of Iranian politics toward hardliners digging in for greater confrontation, rather than engagement, with the West. More moderate politicians face a dilemma: become more strident or be pushed to the margins.

“The political camp that opposed the nuclear deal is getting stronger,” said Hamidreza Azizi, an assistant professor of international relations at Shahid Beheshti University in Tehran. Sentiment has nosedived since “it became clear that the U.S. is acting as a hegemon.”

Why Bother?

About 40 percent of Iranians now disapprove of the multiparty agreement, formally known as the Joint Comprehensive Plan of Action, according to the latest survey by research firm IranPoll. That’s double what it was in early 2016, when most sanctions on Iran were lifted, and higher than a year ago before Trump pulled out of the deal.

While most observers consider it likely that Iran will attempt to wait out the rest of Trump’s first term and hope he loses in 2020 rather than walk away from the agreement, it’s signaling its patience is wearing thin, including with European nations who want to protect their trade from U.S. penalties.

“A year has passed since the U.S. left the deal and these countries still haven’t found ways to ensure gains for Iran,” Deputy Foreign Minister Abbas Araghchi said Wednesday. “The International Atomic Energy Agency in 14 reports has confirmed that Iran is standing by its commitments.”

As the mood sours, even reformist lawmakers are calling on Zarif to appear before parliament to explain why Iran’s still bothering to abide by the deal that Trump unilaterally trashed.

U.S. ‘Bullying’

“The U.S. officially left the deal and is widening the scope of its cruel sanctions by the day,” Mahmoud Sadeghi, a member of the moderate camp, said April 24, according to a local news service. “Why isn’t the Iranian government pulling out?”

Reza Babaei, a taxi driver who works 15-hour days for what he describes as a paltry income, echoed that view. “If the U.S. is bullying, we must stand up to them,” he said. “Whether the nuclear deal is good or bad, we must decide once and for all.”

Surging prices and shortages of food and medicine that the standoff has created could yet feed into pre-existing grievances over unemployment, a lack of freedoms and official corruption to the point where the regime feels compelled to offer Trump concessions.

Mood Shifts

But for now the mood appears more in tune with the argument that caving will only invite more blows from a U.S. administration that’s made suppressing Iran a centerpiece of its Mideast strategy, to the benefit of Iran’s chief regional foes: Saudi Arabia and Israel.

Iranian leaders “have logic behind their actions and they have patience,” said Foad Izadi, a conservative foreign policy analyst at the University of Tehran who’s been critical of President Hassan Rouhani’s policies. “You could see a change of policy but it will be gradual, it’s not going to be overnight.”

The economic crisis unleashed by U.S. sanctions means Rouhani’s government has little to show for its engagement with the West 10 months before elections for a new parliament. The growing despair could help set the country’s political direction for the foreseeable future.

U.S. officials contend that political moderation in Iran is “a facade,” said Vali Nasr, dean of the Johns Hopkins School of Advanced International Studies in Washington. But politicians like Zarif and Rouhani had enthused “a large segment of the Iranian public,” forcing their views to be accommodated by conservatives.

Oil Shipments

“If that portion of the population is deflated, then it’s much easier to rule over them,” he said.

Threats by Iranian military officials to close the Strait of Hormuz, a waterway vital for global oil shipments, have been dismissed by analysts as chest thumping to win concessions from Europe, China and Russia. Similarly, watchers of Iran doubt it’ll nix the nuclear deal and expand its uranium-enrichment program—doing so would carry the risk of military action and a return to pariah status—or exit the nuclear Non-Proliferation Treaty.

One response might be walking back some of its commitments under the agreement, such as limiting the scope of nuclear inspections.

And there will almost certainly be more interventions from the likes of influential Revolutionary Guards commander Qassem Soleimani, who directed many of Iran’s military operations to help defeat Islamic State and rescue allied governments in Iraq and Syria. His popularity has seen him tipped as a potential future president.

Last month, Trump formally designated Soleimani’s Revolutionary Guards, a unit of the Iranian military, as a terrorist organization.

“The enemy wants to drag us to the negotiating table,” Soleimani said this week. “These negotiations would be tantamount to surrender. We won’t agree to such indignity.”

Photo: Bloomberg

Oil Squeeze on Iran Aids Putin's Power Play in the Middle East

If President Donald Trump succeeds in cutting Iran’s oil exports to almost nothing, one of the main beneficiaries is likely to be Russia.

The economic blow to Iran will ease the Kremlin’s efforts to rein in Iranian influence in Syria, bolstering President Vladimir Putin’s efforts to project Russian power across the Middle East. Tehran and Moscow were one-time collaborators in the region, but they’ve found themselves increasingly at odds as Syria’s eight-year-old civil war winds down.

In recent months, the two main power brokers in Syria have engaged in deadly clashes, with Russian and Iranian forces and their proxies firing at one another, according to a Russian official and media reports. The relationship between the two countries is tense, three people close to the Russian government confirmed, speaking on condition of anonymity to discuss confidential matters.

Countering Iran will become easier after Trump removed waivers that allowed it to sell oil to countries including China, India and Turkey because the country “will be a lot more squeezed,” said Yury Barmin, a Middle East expert at the Moscow Policy Group research organization.

Sentiment Sours

Since Trump re-imposed sanctions last year, Iranians have been burned by a lack of solidarity from their one-time partners. Tabnak, a conservative news site founded by a former Revolutionary Guards commander, complained in a recent commentary that Moscow hasn’t shown any “serious determination” to stand with Tehran.

Iran’s ejection from international oil market also benefits Russia financially: it’ll be free to resume pumping at full capacity when output curbs agreed with OPEC expire in June, said Dmitry Marincheko, oil and gas director at Fitch Ratings. That will earn it about an extra $6 billion a year, at current prices.

As relations with Iran soured, Russia invested in unprecedented cooperation with its chief rival, Saudi Arabia, inking a joint agreement with OPEC on limiting oil production. That succeeded in stabilizing prices.

Although Moscow and Riyadh have backed opposing sides in Syria, Putin has been trying to persuade other Arab nations to drop their hostility to Syrian President Bashar al-Assad and reintegrate the nation into the Arab League. A smaller Iranian footprint in Syria makes that more palatable to Sunni Gulf states that see Shiite Iran as their primary rival, said Barmin of Moscow Policy Group.

Armed Clashes

Russian troops have been seeking to gradually push the Iranian-backed Lebanese Shiite militia, Hezbollah, out of Syria, and pro-Iranian and pro-Russian detachments have exchanged fire increasingly since late last year, with three armed incidents reported in April alone.

That included one on April 19 in the eastern province of Deir Ezzor in which two Iranian Revolutionary Guards were killed and four Russian military police wounded, according to Turkey’s Anadolu Agency. Far more deadly clashes occurred in January between rival branches of the Syrian military backed respectively by Iran and Russia, Russian newspaper Novaya Gazeta reported.

The conflict is partly over which side mans checkpoints and benefits from it financially, said Rami Abdurahman, director of the U.K.-based Syrian Observatory for Human Rights, which monitors the war through activists on the ground. But it also reflects a much broader standoff, said Nikolay Kozhanov, a Middle East expert at the European University at St. Petersburg, who served as a Russian diplomat in Tehran from 2006-2009.

Different Goals

“Although Russia and Iran are both interested in ensuring the survival of Assad, they have completely different strategic goals and priorities,” Kozhanov said.

Iran sees Syria as a key front in its battle to carve out a dominant regional role and threaten Israel. That runs afoul of Russia’s aim of using its footprint in Syria to advance Putin’s global ambitions while keeping ties to all major players in the region, including Israel, said Kozhanov. Russia has allowed repeated Israeli air raids on Iranian-backed targets in Syria, according to the ex-Russian envoy.

Russian Deputy Foreign Minister Sergei Ryabkov in January denied that Iran was an ally of Russia and said his country was committed to ensuring the “very strong security of the state of Israel.”

Financial Interests

Economically as well, Russia and Iran are competitors in Syria, London-based research group Chatham House said in a March report.

In early 2017, Syria and Iran signed a memorandum of understanding on a phosphate mining concession near the ancient site of Palmyra. But six months later, Syria signed rights over the same mine to a Russian company owned by a Putin ally, Chatham House said.

The U.S. designation of the Islamic Revolutionary Guards Corps, a branch of the Iranian army, as a terrorist organization in mid-April makes it more difficult for Iran to ship oil, and allows Russia to challenge its role as the main supplier of fuel to the Syrian government, said Barmin.

Disagreements could sharpen over which foreign forces should stay in Syria, said Diako Hosseini, director of the world studies program at the Center for Strategic Studies in Tehran, which is affiliated with the Iranian presidential office.

While the two sides continue to cooperate in efforts to engineer a political post-war settlement, there are concerns the tensions could spiral out of control.

In one possible worst-case scenario for Syria, the Russian-Iranian partnership collapses completely and military groups loyal to each side engage in a fight, said Andrei Kortunov, director general of the Russian International Affairs Council, a Kremlin-founded think tank.

“The once-implicit competition between Moscow and Tehran for influence in Damascus would then become explicit,” he said.

Photo Credit: Bloomberg

Trump Playing Hardball Gives Iran Oil Buyers Costly Headache

The biggest buyers of Iranian oil are being struck by deja vu, and it’s not conjuring up pleasant memories.

Six months ago they were scrambling to secure alternative supplies as the U.S. prepared to impose sanctions on Iranian oil exports, though last minute waivers eventually gave them a reprieve. Now, the Donald Trump administration says it won’t renew those same waivers, forcing the buyers to find a replacement for the Persian Gulf barrels.

Asia is more dependent on oil imports than any other region and has been repeatedly buffeted by America’s campaign to isolate Iran, once OPEC’s second-largest producer. While they’ll be able to find other supplies, they face the prospect of having to pay more, potentially accelerating inflation and putting pressure on their economies.

Importers had been expecting the waivers to be extended, perhaps with a cut in permitted volumes instead of an outright ban, according to refinery officials in Asia. They’d put purchases for May on hold as they awaited the U.S. decision.

One buyer, South Korea’s Hanwha Total Petrochemical Co., said it’s possible to find alternatives, but they’ll cost more and potentially affect the firm’s profits because they largely depend on the price of raw materials. The company has been importing and testing other supply from areas such as Africa and Australia, a spokesman said.

The White House said on Monday that its decision is intended to bring Iran’s oil exports to zero and squeeze the Persian Gulf state’s principal source of revenue. The U.S. wants to force Iran back to negotiations over its nuclear program. Any buyer importing crude after the waivers expire on May 2 faces the risk of being cut off from the American financial system.

Elusive Alternatives

While Trump said in a tweet that Saudi Arabia and other producers in the Organization of Petroleum Exporting Countries will make up for any shortfall, that prospect will not necessarily bring relief to buyers. South Korea, for example, is highly dependent on a type of ultra-light oil known as condensate from Iran that’s used by the Asian nation’s petrochemical producers.

These companies will be hit especially hard by the U.S. decision to eliminate waivers, according to four condensate traders interviewed by Bloomberg. That’s because Saudi Arabia and the United Arab Emirates—among the biggest OPEC producers—export only limited supplies of the ultra-light oil, which is used in units known as splitters to produce petrochemicals and plastic components, they said.

Unipec, the trading arm of China’s state-owned refining giant Sinopec, hasn’t been approached by Saudi Arabia or the U.A.E. with more oil offers, said a person familiar with its procurement plan who asked not to be identified as the information is private. While the firm expected America to renew waivers at least with limited volumes, it had a contingency plan for an end to shipments, said the person, adding that it will seek to import more from the Middle East, West Africa and the U.S.

Caught by Surprise

An official at another major South Korean refiner also said it was caught off-guard by the U.S. decision, and still remained hopeful that the U.S. would ultimately extend waivers allowing at least some Iranian imports. Based on Bloomberg’s ship-tracking data, Asian buyers such as China, India, Japan and South Korea accounted for more than 80 percent of the Islamic Republic’s total crude and condensate exports in March.

Saudi Arabia, for its part, will coordinate with other crude producers to ensure that adequate supplies are available and the market “does not go out of balance,” Energy Minister Khalid Al-Falih said after the Trump administration announced the end of the waivers.

One person familiar with the U.S. decision announced Monday said that some of the countries that had previously received waivers would be given a little more time to wind down purchases. The person described that not as a waiver but more as a brief grace period.

Crude Gains

Global benchmark Brent crude rose to a six-month high, moving toward $75 a barrel in London after the U.S. decision. Front-month futures were at $74.33 a barrel at 11:43 a.m. in London. West Texas Intermediate, the American marker, also jumped and is trading near $66 a barrel in New York.

Some refiners in India—which had been negotiating hard with the U.S. for the waivers to be renewed—sought to play down the impact on Monday. Indian Oil Corp., the nation’s top importer of Iranian crude, has enough supplies of alternative feedstock, said a company official who asked not to be identified because of internal policy.

The company intends to use built-in options in its oil contracts with Kuwait, Abu Dhabi, Saudi Arabia and Mexico to procure more crude from those sources, thus making up for any shortfall from the Persian Gulf state, the official said. Fellow domestic refiner Hindustan Petroleum Corp. is confident there won’t be supply constraints, according to Chairman M.K. Surana.

HPCL has reduced its purchases from the Islamic Republic and has limited exposure to U.S. sanctions, he said in a phone interview, though he added that a halt in supplies from Iran would likely push oil prices higher in coming months.

Photo: Bloomberg

Trump to Sanction Allies Over Iran Oil, Risking Friction

The United States said Monday it would start imposing sanctions on friends such as India that buy Iranian oil, in its latest aggressive step to counter Tehran that could jeopardize US relationships.

The announcement sent global crude prices spiraling higher, although President Donald Trump tweeted that Saudi Arabia and other US allies would "more than make up" for decreases in Iranian oil.

In seeking to reduce Iran's oil exports to zero, the Trump administration is targeting the country's top revenue maker in its latest no-holds-barred move to scale back the clerical regime's influence

"The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime's destabilizing activity threatening the United States, our partners and allies and security in the Middle East," the White House said in announcing its move.

Eight governments were initially given six-month reprieves from the unilateral sanctions imposed last year by the United States on Iran.

They include India, which has warm ties with Washington but disagrees on the US insistence that Iran is a threat.

Other countries that will be affected include China and Turkey, opening up new friction in contentious relationships if the United States goes ahead with sanctions over buying Iranian oil.

Secretary of State Mike Pompeo insisted that the United States would punish countries that buy Iranian oil after May 2, without spelling out the scope of the sanctions.

“We've made clear—if you don't abide by this, there will be sanctions," Pompeo told reporters. "We intend to enforce the sanctions."

The others—Greece, Italy, Japan, South Korea and Taiwan—have already heavily reduced their purchases from Iran.

Pressure Keeps Building

Trump last year withdrew the United States from an accord negotiated by his predecessor, Barack Obama, under which Iran drastically reduced its nuclear program in return for promises of sanctions relief.

Pompeo said the United States would keep raising pressure until Iranian leaders come back to the table, although he appeared little concerned with wooing them, saying he was making his demands to "the ayatollah and his cronies."

Trump's tough Iran policy has already alienated close allies, with the Europeans supporting the 2015 accord—with which UN inspectors say Iran is complying—and setting up a way for their businesses to evade US sanctions.

A key backer of Trump's push is Israeli Prime Minister Benjamin Netanyahu, who hailed the latest move as "of great importance."

Just two weeks ago, Trump took another key step by designating Iran's elite Revolutionary Guards—who are in charge of preserving the regime and have amassed vast commercial interests—as a terrorist group, the first time such action has been taken against part of another government. 

Iran earned USD 52.7 billion from petroleum exports in 2017, according to the oil cartel OPEC, before the reimposition of US sanctions.

Experts say it is unlikely that Iranian exports will ever be reduced completely to zero, with a black market likely to exist.

Oil Prices Rise

Oil prices jumped overnight on reports of the action by the United States.

US benchmark West Texas Intermediate for May delivery went up another 2.2 percent shortly after opening to $65.39 a barrel.

Backing Trump's comments, Saudi Arabia's Energy Minister Khalid al-Falih said that the kingdom would work to "stabilize" the oil market.

Energy-hungry India stands to be among the most affected by the decision and is also facing US pressure not to buy from Venezuela, where Trump is seeking to topple leftist President Nicolas Maduro.

According to Indian commerce ministry data, oil imports from Iran in the 10 months to January rose 16.3 percent to 21.3 million tonnes—although they have declined since the initial US sanctions announcement.

Trump's move has also been good for US business, with India's oil purchases from the United States skyrocketing 350 percent from 2017 to 2018.

In the case of Turkey, Ibrahim Kalin, the spokesman for President Recep Tayyip Erdogan, recently told reporters in Washington that "we are expecting" a waiver extension as the country had reduced imports from Iran, despite disagreeing with US policy.

The United States still has an exemption in place for Iraq, which relies on electricity from its neighbor to cope with chronic blackouts that have triggered unrest.

Photo: Bloomberg

Macron Urges Iran's Rouhani to Avoid 'Escalation' of Tensions

French leader Emmanuel Macron on Tuesday urged his Iranian counterpart Hassan Rouhani to avoid an escalation of tensions after Washington blacklisted Iran's elite Revolutionary Guards as a terrorist organization.

In a telephone conversation, Macron urged Rouhani to "avoid any escalation or destabilization of the region," the French presidency said in a statement.

President Donald Trump called the unit—which has some 125,000 troops and vast interests across the Iranian economy—Tehran's "primary means of directing and implementing its global terrorist campaign."

It was the first time that the United States has branded part of a foreign government a terrorist group.

In response, Rouhani on Tuesday accused the United States of being the real "leader of world terrorism".

The Revolutionary Guards are the ideological arm of Iran's military and deeply embedded in the country's political and economic life.

Photo Credit: Wikicommons

Iraq Says Tried to Stop US Blacklist of Iran Revolutionary Guard

Baghdad tried to stop Washington from blacklisting Iran's Revolutionary Guards as a "terrorist organization," Iraqi Prime Minister Adel Abdel Mahdi said Tuesday, warning that the decision could further destabilize the region. 

The United States declared the Islamic Revolutionary Guard Corps a "terrorist" group on Monday, prompting Tehran to quickly slap US troops with the same designation. 

"We tried to stop the American decision. We reached out to all sides, to the US and the Saudis," Abdel Mahdi said during a weekly press conference on Tuesday.

He said he had warned Washington and its ally Riyadh that the move would have "negative repercussions in Iraq and in the region,” but stopped short of denouncing it. 

Any escalation, he said, "would make us all losers.”

The premier has repeatedly said Baghdad would seek good ties with both Tehran and Washington, and the new sanctions have forced it to walk an even tighter rope.

They mark the first time Washington has branded part of a foreign government a terrorist group, meaning anyone who deals with the Revolutionary Guard could face US prison.

The IRGC was integral during Iraq's years of fighting against the Islamic State group, with the head of its foreign wing Major General Qassem Suleimani coordinating fighting across various Iraqi battlefields. 

Since the battle against IS ended in late 2017, Suleimani has continued to meet with Iraq's top political brass.

Officially, the IRGC has no presence in Iraq, and it remains unclear whether these sanctions impact Iraqi figures, institutions or military groups. 

Washington reimposed tough sanctions on Tehran's energy and finance industries last year, but granted Iraq several temporary waivers to continue importing Iranian gas and electricity to prop up its frail power sector. 

At the same time, Iraq and Iran seem to be deepening trade ties, with Iranian President Hassan Rouhani visiting Baghdad in March and Abdel Mahdi returning the visit at the weekend. 

The premier has also said he is planning trips soon to both Riyadh and Washington, Tehran's main foes. 

Photo Credit: IRNA

Zarif Calls for US Forces to be Put on Iran 'Terror' List

Iran's top diplomat Mohammad Javad Zarif on Monday urged President Hassan Rouhani to place US forces in the region on Tehran's list of "terrorist" groups, the foreign ministry said.

The foreign minister requested the move against US Central Command (CENTCOM), which has forces stationed from Central Asia to Egypt, shortly after Washington announced it was designating Iran's Revolutionary Guards a terrorist organization.

 The Iranian foreign minister wrote to Rouhani asking him "to put the American Forces in Western Asia known as CENTCOM on the Islamic Republic of Iran's list of terrorist groups", the ministry said.

Zarif also blasted the US move on Twitter, saying it was done to support Israeli Prime Minister Benjamin Netanyahu ahead of Tuesday's parliamentary election in the Jewish state.

"A(nother) misguided election-eve gift to Netanyahu. A(nother) dangerous U.S. misadventure in the region," he wrote.

Part of America's vast military presence around the globe, CENTCOM's area of command covers multiple war zones and hotspots including Afghanistan, Iraq, Syria, Yemen and the Gulf.

The US decision came as part of already far-reaching attempts to undermine the Iranian government.

President Donald Trump said the "unprecedented" move "recognizes the reality that Iran is not only a State Sponsor of Terrorism, but that the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft."

"The IRGC is the Iranian government's primary means of directing and implementing its global terrorist campaign," Trump said in a statement.

It is the first time the United States has applied the designation to part of a foreign government, rather than guerrilla groups or other more informal entities.

The move follows Trump's decision to pull the United States out of a multilateral deal with Iran that was meant to lift crippling economic sanctions in return curbs on Tehran's nuclear program.

Photo Credit: IRNA

Trump's Sanctions Staff Defects as U.S. Expands Economic War

The U.S. office in charge of financial sanctions, President Donald Trump’s favorite weapon against American adversaries, risks being hobbled by staff departures due to management turmoil and growing private-sector demand for its expertise.

Trump has nearly doubled the number of people and companies under U.S. sanctions. But in the last two years, about 20 staff have left the office in charge of implementing and enforcing sanctions, the Office of Foreign Assets Control—about 10 percent of its workforce.

The sanctions office, part of a Treasury division overseen by Sigal Mandelker, has the power to freeze billions of dollars in assets, blacklist individuals and companies from participating in the U.S. economy and punish violations. The Trump administration has turned to sanctions to pressure countries including North Korea, Venezuela and Turkey.

The increased tempo and sophistication of the work of the sanctions office, known as OFAC, has contributed to attrition. Washington law firms, Wall Street banks and other companies have sought to hire Treasury’s sanctions officials to help them translate the agency’s decisions, which can have sweeping effects on financial markets.

But some who have left also blame Mandelker, 47, the undersecretary for Treasury’s Terrorism and Financial Intelligence unit, or TFI, which is composed of four offices, including OFAC.

While they say Mandelker is smart and well-versed, people familiar with her work also call her disorganized, indecisive and short-tempered and say she has embroiled her staff in feuds with a deputy, Marshall Billingslea.

Mandelker’s poor leadership has hurt morale across the units she oversees, according to more than 20 people familiar with the inner workings of her department, all of whom asked not to be identified because of the sensitivity of the situation.

Attrition Risks

The Treasury Department made Secretary Steven Mnuchin available for an interview after it was asked for comment from Mandelker. He expressed confidence in her work and said criticism of her is “completely inconsistent” with the operations of her division.

“Sigal and I have tremendous confidence in the career staff and their opinions,” he said. Mnuchin said attrition rates are lower at TFI than other parts of Treasury, though the department declined to provide numbers.

Mandelker said in written testimony for a House hearing last week that she was “humbled to supervise TFI’s career professionals who work day-in and day-out, often behind the scenes, to keep America safe.” She called OFAC the “beating heart of U.S. sanctions.”

Mnuchin has taken an increased interest in TFI’s work compared to his predecessors, often saying that he spends half his time on sanctions. Some of the people who blame Mandelker or Billingslea for the attrition say Mnuchin’s involvement in the office helps speed decisions, and that the secretary was more willing to hear and follow advice from civil servants than Mandelker.

“Given the activity and the impact on the private sector both here and abroad I can see why companies would want to hire experts to deal with this,” Mnuchin said.

It’s difficult to pinpoint risks from staff attrition at TFI, but one vulnerability could be legal. People under U.S. sanctions sometimes sue the government for relief. Russian billionaire Oleg Deripaska, who was sanctioned last year in response to Moscow’s interference in the 2016 election, filed a lawsuit last week claiming $7.5 billion in losses related to the U.S. penalties.

Deripaska’s lawsuit names OFAC’s current director, Andrea Gacki, as a defendant.

OFAC has never lost such a case, but if it does, it “could tie OFAC’s hands in actions in the future, while also making a mess of economies facing sanctions,” said Erich Ferrari, who founded Ferrari & Associates in Washington and helps people get removed from U.S. sanctions.

“Sanctions are hard. It takes a long time to really understand how the tool can be effective and what the legal bounds are,” said Ferrari, one of the lawyers representing Deripaska. “When you lose all of that institutional knowledge, you could end up getting sued for not understanding which actions may not be in accordance with the law.”

Sanctions Power

OFAC’s work is as enigmatic as it is powerful. One day in February, trading of some Venezuelan debt came to a standstill after Treasury updated its sanctions guidelines on transactions tied to Maduro’s regime. OFAC’s complex instructions were interpreted as forbidding most transactions. Treasury clarified its guidance a week later.

OFAC also has the ability to punish anyone who violates its financial restrictions, whether it’s BNP Paribas, one of the world’s largest banks, which agreed to pay a $9 billion fine in 2014, or a beauty company using North Korean materials to make false eyelashes.

Recent departures from TFI include Sarah Runge, who left after about 10 years to lead regulatory strategy at Credit Suisse Group, Jennifer Fowler, who left after 17 years for Brunswick Group in Washington and Heather Epstein, who is now at Barclays Plc. Neither responded messages seeking comment.

The more than 20 people interviewed who blame Mandelker for the departures from TFI said she has ignored the advice of veteran civil servants in the unit, frequently loses her temper and often leaves dozens of employees waiting up to 40 minutes for her to arrive at meetings.

Office Friction

Her clashes with Billingslea, a fellow political appointee who is a subordinate but like Mandelker is Senate-confirmed, have also discomfited some staff, the people said.

Trump has nominated Billingslea to be an assistant secretary at the State Department.

Treasury Department officials asked some of Mandelker’s subordinates and supporters to contact Bloomberg News in her defense, including Isabel Patelunas, an assistant secretary in TFI; Kenneth Blanco, who heads another unit Mandelker oversees called the Financial Crimes Enforcement Network; Paul Ahern, assistant general counsel at Treasury; and others who asked not to be named. They said Mandelker deserves credit for her leadership of a division of Treasury undertaking challenging and high-pressure work.

They said she’s passionate about her work, aggressively advocates for resources and has helped break silos within TFI. Stuart Levey, one of Mandelker’s predecessors who also worked with her during the post-9/11 era at Justice Department, said she operates well under pressure.

“In every administration from Clinton to Bush to Obama to Trump, I saw conflict within the agency because they were incredibly passionate people who cared deeply about the mission,” said John Smith, who worked for Treasury for 11 years and left OFAC as director in May due to personal reasons.

Mandelker has said she takes pride in a career directed at fighting human rights abuses, including in her current role at Treasury. The daughter of Holocaust survivors, she held various positions at the Justice and Homeland Security departments during President George W. Bush’s administration. She was a partner at New York law firm Proskauer Rose LLP before she joined the Trump administration.

The departures at TFI echo instability earlier in Trump’s administration at Treasury’s International Affairs unit, led by David Malpass. Following a Bloomberg News report that Malpass’s mismanagement pushed more than 20 civil servants out of the office, Treasury officials started hosting listening sessions, lunches between civil servants and Malpass, and increased transparency into decision-making, according to two people familiar with the matter.

Photo Credit: Bloomberg

Pompeo on Middle East Tour to Counter Iran, Boost Netanyahu

Top US diplomat Mike Pompeo sought Wednesday to bolster a united front against Iran during a Middle East tour that will include talks with key ally Prime Minister Benjamin Netanyahu ahead of Israeli elections.

The US secretary of state kicked off his regional tour in Kuwait where he met Emir Sheikh Sabah al-Ahmad Al-Sabah on the first stop of a trip that will also take him to Israel and Lebanon.

Pompeo told reporters on the flight from the United States that he would discuss "strategic dialogue" and the need to combat "the threat posed by the Islamic Republic of Iran" with leaders in the region.

He will also push for a greater role for the Middle East Strategic Alliance, a US-sponsored Arab NATO aimed at uniting Washington's Arab allies against Tehran.

After Kuwait Pompeo will fly to Israel where an election campaign is in its final weeks with Netanyahu locked in a close battle with centrist rivals.

While Washington insists it is not interfering in Israeli politics, his visit is seen as a sign of support for Netanyahu, who is struggling to keep his grip on power as he faces allegations of bribery, fraud and breach of trust ahead of the April 9 polls. 

"I'm going to Israel because of the important relationship we have," Pompeo said.

"Leaders will change in both countries over time. That relationship matters no matter who the leaders are."

Israel is one of the most outspoken members of the anti-Iranian grouping assembled by the US, and Iran is sure to be a central focus of Pompeo's talks in Jerusalem. 

'Important Relationship'

No meetings with Netanyahu's opponents are scheduled, and the secretary of state will not meet with representatives of the Palestinian Authority. 

"They'd have to want to talk to us," Pompeo said of the Palestinian officials. "That'd be a good start."

President Donald Trump's decision in December 2017 to recognize Jerusalem as the capital of Israeli delighted Netanyahu's government.

But it enraged Palestinians, who want to make the eastern, mainly Palestinian part of the city the capital of their future state.

Washington has taken a series of steps deemed so "hostile" by the Palestinian Authority that it now refuses any contact with the US administration. The moves include cutting most of the US aid to the Palestinians.

Pompeo's two-day visit to Jerusalem also includes a symbolic stop at the new US embassy, which was transferred from Tel Aviv on Trump's orders last year.

Netanyahu will travel to Washington in the last week of March for the annual conference of the American Israel Public Affairs Committee (AIPAC), an event sponsored by the influential lobbying group that draws thousands each year.

While a meeting has not been officially confirmed, the Israeli premier hopes to use the opportunity of his Washington visit to meet with Trump. 

Peace Plan Countdown

A shift in semantics and policy has marked the Trump term, particularly related to the Middle East. 

The US has ceased to refer to Syria's Golan Heights as "Israeli-occupied" and instead calls the territory "controlled" by Israel—a change seen by some as a prelude to US recognition of Israeli sovereignty over the strategic plateau.

“That language reflects the facts as we understand them," Pompeo said. “This was a factual statement about how we observe the situation. And we think it's very accurate, and we stand behind it."

The April 9 vote in Israel will also start the countdown for the presentation, expected before the summer, of the Israeli-Palestinian peace plan that a small White House team—strongly pro-Israeli, analysts say—has been quietly preparing under the president's son-in-law, Jared Kushner. 

During Friday's Beirut leg of his trip, Pompeo will focus on the Hezbollah movement, which the US considers a pro-Iranian "terrorist" group even though it is represented in the coalition government of Lebanese Prime Minister Saad Hariri, himself a US ally.

Photo Credit: State Department

Before Saudis Go Nuclear, They May Have to Follow Iran's Lead

International monitors reminded Saudi Arabia this week that it still has work to do before delving deeper into an ambitious nuclear program that could transform how the kingdom generates its energy.

Focus on Saudi Arabia’s nuclear program has risen in the last month after the U.S. Congress opened an investigation into the potentially illegal transfer of sensitive technologies to the kingdom. This week the International Atomic Energy Agency, responsible for verifying that countries don’t divert material for weapons, weighed in on what its inspectors need before the kingdom can start generating nuclear power.

Riyadh’s nuclear program is developing “based on an old text” of safeguard rules, even as it expects to complete its first research reactor this year and plans to tap uranium reserves, according to IAEA Director General Yukiya Amano, who told journalists this week in Vienna that he’s “appealing to all countries to rescind” those old ways of doing business.

“We’re encouraging all countries to conclude and implement an additional protocol and that includes Saudi Arabia,” said Amano, who’s also in charge of enforcing the 2015 nuclear deal struck between Iran and world powers. The Japanese career diplomat has called the set of rules established by that accord, which U.S. President Donald Trump withdrew from in May, as “the most rigorous monitoring mechanism ever negotiated.”

Rising power consumption and desalination costs are pushing Saudi Arabia to look at nuclear energy. The world’s top crude exporter currently burns oil to generate most of its power and provide drinking water. Pivoting toward nuclear would reduce greenhouse gas emissions and free up more crude to sell on world markets.

But the IAEA comments could strike a precautionary note among vendors lining up to service the kingdom’s nuclear ambitions. Receiving the imprimatur of IAEA inspectors, who account for gram-level quantities of nuclear material worldwide, is a precondition for receiving technologies and fuel. Without reaching a new understanding with monitors, Saudi plans for 3.2 gigawatts of atomic power by the end next decade could flounder.

Saudi Arabia didn’t respond to emails and phone calls placed to its IAEA mission in the Austrian capital.

In order to get its nuclear program on track, Saudi Arabia may need to look at the allowances made by its regional rivals in Iran, according to Robert Kelley, a U.S. nuclear engineer and former IAEA director.

The Iran deal “is unprecedented in terms of previous monitoring regimes,” according to Kelley, who worked in the Department of Energy’s nuclear-weapons complex before overseeing inspections in countries including Libya, South Africa and Iraq.

Maintaining that level of IAEA access to Iran’s nuclear program is the reason that China, France, Germany, Russia and the U.K. continue to defy U.S. calls to abandon the 2015 deal and reimpose sanctions. Diplomats from those countries convened Wednesday in Vienna in their first meeting since the European Union established a trade channel to skirt U.S. threats.

For Saudi Arabia, which threatened a year ago to develop nuclear weapons if Iran did, aligning its atomic rule book with current best practices may be the best option for it to accelerate its nuclear program.

“It has a ridiculously weak agreement right now,” Kelley said. “The additional protocol is the gold standard and has some teeth to it. Getting that in place should be straightforward.”

Photo Credit: Bloomberg

IAEA Says Iran Adhering to Terms of Nuclear Deal

Iran has been adhering to a deal with world powers limiting its nuclear program, the UN atomic watchdog said Friday, as diplomatic wrangling continues over the future of the accord.

The latest report from the International Atomic Energy Agency confirmed that Iran was still complying with the 2015 Joint Comprehensive Plan of Action (JCPOA) with global powers under which Tehran drastically scaled back its nuclear program in return for sanctions relief.

The IAEA's latest report showed that over the past three-month period, Iran's stock of heavy water had risen from 122.8 to 124.8 metric tonnes and that it held 163.8kg of enriched uranium, up from 149.4kg in November.

Both levels are within the limits foreseen by the JCPOA.

Last week European states rejected a call from US Vice President Mike Pence to follow the US lead in withdrawing from the Iranian nuclear deal.

Photo Credit: MSC

Trump Says US Intelligence Services 'Naive,' 'Wrong' on Iran

President Donald Trump on Wednesday attacked the US intelligence services as "naive" and "wrong" on the threat he says is posed by Iran.

"Perhaps Intelligence should go back to school!" Trump said in a blistering tweet.

 "The Intelligence people seem to be extremely passive and naive when it comes to the dangers of Iran. They are wrong!" Trump tweeted.

Although especially vehement, it was not the first time Trump has publicly criticized his own intelligence services.

The broadside, which included separate tweets where Trump praised the success of his policies in Syria and North Korea, followed testimony Tuesday by top intelligence chiefs that were widely seen as contradicting the president's rosy assessments.

In a hearing on global threats at the Senate Intelligence Committee, the top officials took issue with Trump's assertion that the Islamic State group has been defeated, and that North Korea can be convinced to forego its nuclear weapons.

They also challenged the president's claim that Tehran is actively seeking nuclear weapons, the justification Trump gave for withdrawing last year from a multilateral treaty on Iran.

They underscored again that they believe Russia meddled deeply on Trump's behalf in the 2016 presidential election—which he has repeatedly denied—and can be expected to do the same in 2020.

The hearing took place weeks after Trump cited a victory over Islamic State to justify his sudden announcement of an immediate pullout from Syria, a move that alarmed the US defense establishment and allies in the Middle East.

And it came just weeks before Trump plans a second summit with North Korean leader Kim Jong Un to negotiate a hoped-for denuclearization of the deeply isolated state.

Photo Credit: Wikicommons

Iran's Rouhani Tells Critics: Blame 'Oath-Breaker' US

Iran's President Hassan Rouhani slammed his critics on Wednesday, defending the political achievements of a landmark 2015 nuclear deal and calling the US an "oath-breaker".

"One should not condemn the government or the great Islamic system instead of America—this is the greatest damage that can be done," he said on state TV.

Hardliners have repeatedly hammered the 2015 nuclear deal with six world powers since the early stages of negotiations, calling it a fool's errand and a deception.

They contend that Iran has gained nothing from the agreement despite complying with its restrictions on the Islamic republic's nuclear program, intensifying their criticism after Washington withdrew from the treaty last  year.

Speaking during an annual ceremony of allegiance to the late founder of the Islamic republic, Ayatollah Ruhollah Khomeini, Rouhani said: "America has not been an oath-breaker only to us, but also to Europe, China, NAFTA and the Trans-Pacific Partnership (TPP)."

President Donald Trump withdrew Washington from the deal—technically called the Joint Comprehensive Plan of Action (JCPOA)—last May, reimposing punishing sanctions on the Islamic Republic.

Washington also withdrew from the TPP trade agreement in 2016, the Paris Agreement on climate change control the next year and forced Canada and Mexico to renegotiate and sign a new deal in 2018 replacing the North American Free Trade Agreement.

The other parties to the Iran nuclear deal—Britain, China, France, Germany and Russia along with the European Union—have insisted it remains in force and is working.

Rouhani took another jab at opponents who have criticized Iranian diplomats' lack of foresight over not predicting the US withdrawal.

"No agreement is based on whether the other party remains, but the main basis is the country's interests," he said.

He ended his speech by calling for "unity", saying Khomeini's main concern was not foreign forces but domestic "discord.”

Photo Credit: IRNA