11/22 #02

Today’s Update focuses on the ongoing, widespread protests in Iran – led originally by women protesting mandatory headscarves but increasingly spreading to other classes and groups. It also looks at the policy challenges the struggle of the Iranian people for freedom poses for Western governments and civil society.

We lead with a heartfelt plea from Germany-based Iranian journalist Yalda Zarbakhch, who asks Western governments to listen to the Iranian protestors and stop trying to seek compromise with the clerical regime in Teheran. Zarbakhch writes movingly about the at least 270 Iranians who have been killed by the regime, and how, following the traditional 40 days of mourning, their gravesites have become the focus of new protests. She says she does not want the West to get involved in helping overthrow the Islamist regime, but insists it is irresponsible for the West to keep legitimising and even strengthening that regime by seeking to engage and compromise with it. For her full argument, CLICK HERE.

Next up is top American foreign policy expert Walter Russell Mead, who says that the Iranian regime’s rogue behaviour –  both toward the protestors and through the supply of drones and other weapons to Russia to use in Ukraine – actually presents a policy opportunity.  He says that the US Biden Administration has had a string of embarrassing failures in the Middle East, but a resolute White House now has the chance to help the protestors in a way that could positively transform the region. Mead argues an end to the clerical regime in Teheran would not only greatly improve the Middle East, but also deal Russia a major setback, and promote caution in the increasingly aggressive Chinese leadership. For Mead’s explanation of how Iran’s current isolation presents a major opportunity for the US and its allies,  CLICK HERE.

Finally, Washington Institute for Near East Policy sanctions expert Henry Rome looks at the vulnerability of the Iranian regime to renewed enforcement of sanctions. He argues that Washington already has the policy tools required to target Iran’s energy sector very effectively and the Iranian regime is very vulnerable to renewed checks on its energy exports. He then offers a detailed policy roadmap for targeting those exports effectively. For this highly knowledgeable look at one of the main sanctions options against Iran, CLICK HERE. Meanwhile, Richard Goldberg and Andrea Stricker argue for a “snapback” of UN sanctions on Iran under the lapsed JCPOA nuclear deal.

Readers may also be interested in…

• Iran experts Reuel Marc Gerecht and Ray Takeyh see clear signs that the Iranian regime is starting to crack in the face of the protests. A similar argument comes from David Ignatius of the Washington Post. 
• A look at the profound strategic implications of Iran’s drone and missile sales to Russia and their use in Ukraine from Washington Institute military expert Michael Knights, with colleague Alex Almeida. Meanwhile, American writer Shoshana Bryen argues sanctions will not be an adequate response to the Iranian drone transfers to Russia.
• UAE analyst Salem al-Ketbi condemns the West for not having done more about the Iranian drone threat before Iranian drones were sent to Russia for use in Ukraine.
• A report that Russia is now giving Iran captured Western weapons to “reverse engineer” in exchange for the drones it is getting from Iran.
• A warning about escalating Iranian terror plots against dissidents in Western nations.
• The fallout from Israel’s election and victory for Netanyahu – and his likely alliance with some far-right coalition partners – continues to be debated. Worth reading in response to some of the wilder claims about the implications of the election outcome are New York Times columnist Bret Stephens, Jewish thinker Rabbi Daniel Gordis, veteran journalist Shmuel Rosner, and former senior US official Elliott Abrams.
• Israeli Arab journalist Khaled Abu Toameh suggests that what Palestinians need is some of the political freedom and democracy that Israelis have just experienced.
• Some Jewish takeaways from the US mid-term elections on Tuesday 
• Some examples from the many stories and comments now appearing at AIJAC’s daily “Fresh AIR” blog:
  • AIJAC’s Tammy Reznik, writing in the Daily Telegraph, asks why Australia is doing so much less than our allies to help the Iranian protestors.
  • Ahron Shapiro offered a deep dive into the Israeli election results in the Australian Jewish News. 
  • Video of an AIJAC webinar on the implications of the Israeli election outcome with top Israeli journalist Ehud Yaari.

Opinion: Iran’s regime cannot be fixed

Deutsche Welle (DW), November 5, 2022

For weeks now, Iranian women have been fighting for democracy and freedom. Many have been arrested, beaten or killed. DW’s Yalda Zarbakhch asks why Western governments still seek compromise with Iran’s regime.

The 5-year-old daughter of Fereshteh Ahmadi, 32, who was shot and killed by Iranian security forces in Mahabad on Oct. 17, weeps beside her grave in an image that has spawned sympathy for the Iranian protestors around the world (Photo: Reddit). 

Every day another funeral: young people carried to their graves by their families, mothers carried to their graves by their children. For weeks now, these images have dominated the news from Iran.

Right now, the picture circulating around the world is of a 5-year-old weeping beside her mother’s grave. Fereshteh Ahmadi, who had two children, was shot and killed by security forces. The image of her little daughter at her grave is heartbreaking for me as a mother — for every mother, for every human being. Or so you would think.

To date, at least 270 Iranians — women, men and 30 minors — have been shot or beaten to death because they took to the streets to express their anger and outrage following the death of Jina Mahsa Amini on Sept. 16. People are being murdered because they are fighting for democratic values. They want to live according to these values. And for this they are paying with their lives.

Protests at graveyards

Every day marks 40 days since a protester’s death in Iran right now — and relatives and demonstrators turn out to observe the occasion. Despite the significant security presence, tens of thousands of people come to gather in and around the cemeteries. They mourn Jina Mahsa, Nika, Sarina, Hananeh, Asra and Hadis, to name just a few of the brave girls and women killed. Parents are being arrested in order to force “confessions” by torture — made to say that their children died of heart failure or a stroke or by suicide.

Cemeteries and universities are now the biggest sites of protest. Every innocent victim increases the anger and determination of Iranian women and men, and strengthens their unity in standing up against the government.

Human rights organizations estimate that about 14,000 people are being held and abused in Iran’s overflowing jails, including at Tehran’s infamous Evin prison. These people, too, ought to be acknowledged by name: the activists, musicians, children and students abducted from their homes, schools and residences — some of whom may now face the death penalty.

Every day, their calls grow louder and more clear: “Death to the dictator, death to a regime that murders children,” they cry. “Death to the whole apparatus of power, death to the Islamic Republic.”

A regime beyond reform

In the West, of all places, it seems that many political leaders cannot hear the screams of Iranians. Or is it that they don’t want to? Why is the West clinging to possible reform scenarios when people in Iran have known for many years that this system cannot be fixed?

With Iran in the midst of a unique feminist revolution, Germans have directed their expectations for a response to Foreign Minister Annalena Baerbock. But how is it possible that the German Chancellor, Olaf Scholz, remained silent for five weeks? It wasn’t until Oct. 31 that he condemned, in a tweet, the “disproportionate violence of the security forces” against demonstrators in Iran. And why is the West still hoping for a resumption of the Iran nuclear agreement, signed in 2015 and abandoned in 2018? This is a slap in the face of all Iranian women and men who are currently putting their lives on the line.

The demonstrators do not want reforms or compromises. Because what compromises can you make with a regime that arrests schoolgirls, rapes them, shoots them, beats them to death?

As an Iranian, and as a journalist following the pictures, videos and flood of news stories coming out of Iran every day, I speak for my compatriots who have been protesting for weeks when I say that people want regime change. They want to live self-determined lives in a free and democratic country. This is not possible with the current regime in Tehran.

Listen to the protesters

I am not calling for intervention by the West — or for outside involvement in overthrowing the Islamic Republic. That is up to the people of Iran alone. What I am calling for, though, is governments to listen to the protesters: Do not contribute to the strengthening of the regime.

It is irresponsible to strengthen or legitimize a regime that will stop at nothing to remain in power. A regime that no longer has any legitimacy among its own population cannot be legitimized by the international community as a diplomatic partner for dialogue.

Germany-based Iranian journalist Yalda Zarbakhch: “A regime that no longer has any legitimacy among its own population cannot be legitimized by the international community as a diplomatic partner for dialogue.” (Photo: Twitter). 

It is a paradox. In the liberal West, of all places, there is a widespread fear of regime change. I keep hearing warnings that a revolution in Iran would result in instability throughout the region — that it could spark a civil war and turn the country into a second Syria.

I wonder what these warnings are based on. The region is already far from stable, and the Islamic Republic and its Revolutionary Guard, supported by Hezbollah, play a significant part in that, as well. The narrative of a second Syria or impending civil war as the sole alternatives to the Islamic Republic has put the brake on change for years now, both at home and abroad.

Apart from the machinery of power that is centered on the Revolutionary Guard and Basij militias — who would give everything for their religious ideology and their leader, Ayatollah Khamenei — the vast majority of the population is united in the struggle against the Islamic Republic. This has seldom been as apparent as in the past six weeks: People of all ethnicities and minorities, Kurds, Baluchis, women and men, old and young, Muslims, people of other faiths, atheists: All are protesting together across the entire country — with and without hijabs.

Despite all the repressive measures, a strong civil society has developed in Iran in recent years. A great many activists, lawyers, women’s rights activists, and others who could provide an alternative to the Islamic Republic are currently being held in Evin prison. If they are freed in time, they would be able to build a new Iran. This could stabilize the entire region. If they are not released, they face show trials and execution.

Ever since it was established, the Islamic Republic has cemented its power with brutality, oppression, and human rights abuses. It is still doing so 40 years later, and before the very eyes of the international community. For how much longer?

Yalda Zarbakhch is head of DW Persian. This article has been translated from German.

Iran’s Mullahs Throw Biden a Lifeline

Supporting freedom would aid U.S. interests and take a toll on Russia.

Walter Russell Mead 

Wall Street Journal, Nov. 7, 2022

The bravery of Iranian women, and the sacrifice of hundreds of them, has given the Biden Administration a rare foreign policy opportunity, Mead argues. (Photo: Shutterstock, Phil Pasquini)

Joe Biden is a lucky man. The heroism of the Ukrainian people saved him from a Russian victory. Now the people of Iran, led by their women, are offering him a historic opportunity to weaken Russia, reduce long-term American vulnerabilities in the Middle East, and even return a sense of caution and sobriety to Chinese foreign policy.

Like many great opportunities, it comes unexpectedly. The Middle East has been a dreary place for Team Biden. The failure to enlist the Iranians in a renewed nuclear deal, the shambolic Afghan withdrawal, the embarrassing fist bump with a price-hiking Mohammed bin Salman, Benjamin Netanyahu’s electoral victory: Nothing in the Middle East has gone Joe Biden’s way.

This string of embarrassing failures has confirmed the administration’s determination to downgrade the Middle East as a strategic priority. But the Middle East refuses to stay quiet.

Blowing off Biden administration threats dating back to last summer, Iran is selling sophisticated drones to Russia for use in the war on Ukraine. Those drones have enabled Russia’s latest assault on Ukraine’s electrical infrastructure, threatening shutdowns of Ukrainian industry and leaving civilians without light or heat as winter nears. As Robin Wright observes in the New Yorker, Russia salvaged Iran’s position in Syria in 2015 by bolstering the criminal Bashar al-Assad regime. Now Iran is returning the favor by helping Russia in its flagrantly illegal attack on Ukraine.

Enter the women of Iran, whose resistance to clerical bigotry opens the door to a new era in Iranian and even world history.

We do not know whether the Iranian protesters can win. The track record of democratic revolutions across the Middle East is anything but inspiring, and the protesters in Iran have yet to coalesce behind a single group of leaders or political program. But using all the diplomatic and economic tools at America’s disposal to help the Iranian people’s fight for freedom is both the right thing to do and the best way to advance U.S. interests at a critical time.

The time for action is now. Iran’s arrogant, incompetent rulers have isolated themselves to an unprecedented degree. Their ruthlessness at home has silenced regime apologists across the West. Their cynical alliance with Vladimir Putin places them in opposition to Europe as well as the U.S. Their weapons sales to Russia violate a Security Council-imposed arms embargo. Their unconscionable intransigence at the nuclear negotiating table has convinced most Europeans that Iran, not the U.S., is the chief obstacle to a reasonable agreement. The combination of recklessness abroad and instability at home has persuaded smart European businesses that the current regime is a bad bet.

Scenes from a Russian attack on Kyiv, using Iranian drones, on Oct. 17. The Iranian regime’s cynical alliance with Putin has left it isolated to an unprecedented degree (Photo: Sipa USA / Alamy Stock Photo). 

A resolute White House bent on supporting the Iranian people would have many useful options to pursue. Working diplomatically with Europe for a “snapback” of U.N. sanctions to punish Iran for arming Russia, cracking down on black-market Iranian oil exports, and otherwise crippling the regime economically would undermine the regime at a critical hour.

Assuring the Iranian people that normal economic relations would quickly follow the establishment of a law-abiding government in Tehran would encourage regime opponents. Taking steps to restore internet service where the regime seeks to cut communications and providing other nonviolent, nonmilitary assistance to democratically minded protesters would further help the Iranian people regain control of their future. American cooperation with interested neighboring states could support the protests, make life more difficult for Iranian proxies such as Hezbollah, and put more pressure on both Russia and Iran.

The end of the clerical dictatorship that has blighted the lives of the Iranian people and troubled the peace of the Middle East since 1979 would be an unmitigated blessing for the U.S., its Middle East allies and the cause of freedom around the world. Russia would lose access to some of the missiles with which it hopes to crush Ukraine. Russia’s position in Syria would become unsustainable, and the Assad dictatorship would face a just reckoning.

The pressures on world fuel prices would dramatically shrink as Iran’s oil returns to the market. The reintegration of Iran into the world economy would offer a historic opportunity for European and other businesses at a difficult time. The U.S. could reduce its military footprint in the Middle East without compromising the security of its allies. China would reflect on the resilience of American power. A world order that now looks fragile would suddenly seem much more robust.

There are risks to supporting the Iranian people, but America’s current Iran policy offers only the certainty of failure. The mullahs have offered President Biden an unprecedented opportunity; let us hope he seizes it with both hands.

Walter Russell Mead is the Ravenel B. Curry III Distinguished Fellow in Strategy and Statesmanship at Hudson Institute, the Global View Columnist at The Wall Street Journal and the James Clarke Chace Professor of Foreign Affairs and Humanities at Bard College in New York.

Iran’s Oil Exports Are Vulnerable to Sanctions

by Henry Rome

PolicyWatch 3669
Nov 9, 2022

An Iranian oil tanker in the Persian Gulf, near the Strait of Hormuz. Iran’s dependence on oil exports leaves the regime vulnerable to a renewed US focus on enforcing energy sanctions.  (Photo: dpa picture alliance / Alamy Stock Photo)

Iran continues to export significant volumes of oil, providing a key source of revenue for the regime—and a potential target for increased economic pressure.

In recent months, Iran has increasingly engaged in violations of UN resolutions and international norms, from sending weapons to Russia for use against Ukraine, to brutally suppressing mass protests at home, to advancing its nuclear program in irreversible ways. Although Western governments have responded to these actions by imposing limited new sanctions and attempting to isolate Tehran diplomatically, they have not significantly upped the pressure so far.

One potential area in which to do so is the energy sector, where concerted pressure could cut into a key source of government income. The Biden administration has kept its predecessor’s “maximum pressure” sanctions in place but has not rigorously enforced them, allowing Iran to increase its energy exports over the past two years. While the Treasury Department sanctions issued on November 3 are a step in the right direction, they fall short of a systematic campaign. Taking a stronger approach could impose greater costs on Tehran for its nuclear, regional, and domestic policies.

The Oil Lifeline

Over the past three months, Iran’s oil exports averaged between 810,000 and 1.2 million barrels per day (bpd) of crude and condensate (a light liquid hydrocarbon), according to estimates from TankerTrackers, Vortexa, Kpler, and United Against Nuclear Iran. Most of this flow went to companies in China, with entities in Syria, the United Arab Emirates, and Venezuela receiving some as well (the oil sent to the UAE is likely reexported to Asia).

These numbers are far below the roughly 2.7 million bpd Iran was exporting in early 2018, before the Trump administration withdrew from the Joint Comprehensive Plan of Action (JCPOA) and reimposed secondary sanctions. But they are much higher than at the peak of Trump’s maximum pressure campaign, when oil import waivers expired in May 2019 and Iranian exports fell to 500,000 bpd or less.

As negotiations to revive the JCPOA began last year, the Biden administration decided not to aggressively enforce maximal sanctions in word or deed, seemingly concluding that this would dampen diplomatic prospects and was ultimately unnecessary because the nuclear deal would be revived quickly. Although officials reportedly prioritized private diplomatic efforts to encourage China to curtail its purchases, the United States did not issue any energy-related sanctions on Iran until June 2021 and imposed only two other batches the rest of the year (in August and September).

Enforcement measures picked up in 2022—in all, Biden’s Treasury Department has issued ten rounds of sanctions tied to Iranian energy sales. Yet these efforts have been intermittent rather than part of a wider campaign, and they have not had a noticeable impact on Iranian export numbers or the regime’s decisionmaking. The policy of limited enforcement may also have reduced Tehran’s urgency to revive the nuclear deal by giving it valuable economic support and eroding the potential benefits of formalized sanctions relief. Overall, the signal to oil markets was clear: the risk of handling Iranian oil had declined.

Follow the Money

The above export numbers tell only part of the story because they do not account for how much Iran actually earns from its exports. The gap between how much the regime should earn and how much it reportedly does earn demonstrates how costly it is to trade oil clandestinely—and U.S. policymakers should seek to widen this gap.

Oil plays a major role in the Islamic Republic’s ability to generate revenue and access hard currency. In the current fiscal year (March 2022-March 2023), the country expected to export 1.4 million bpd at $70 per barrel, accounting for about one-third of its total revenue. Yet the government does not keep all of the money from these sales—40 percent is owed to the National Development Fund (NDF) and 14.5 percent to the National Iranian Oil Company (NIOC). The government gets the remainder (45.5 percent), with a small portion earmarked for projects in less-developed parts of the country. (Though if the government does not reach its expected targets, it is permitted to dip into the NDF to cover the gap.)

Iran’s budget sets aside a portion of oil revenue to fund imports of basic goods at a subsidized exchange rate. Yet President Ebrahim Raisi and his predecessor steadily winnowed down the list of goods eligible for this discount; Raisi did away with the system almost entirely this year, causing market turbulence and inflationary pressure. Some oil revenue is also funneled directly to military organizations, including the Islamic Revolutionary Guard Corps (IRGC).

Although the government only releases budget data periodically, the available information allows for some estimation of what it actually earns from oil revenue. From April to July 2022, it reported earnings of 650 trillion rials from oil sales. When accounting for the oil conversion rate (230,000 rials to the dollar) and allocations to the NDF and NIOC, the government received about $6.2 billion—but should have earned much more.

Iranian President Ebrahim Raisi’s Government has ended almost all the subsidies on basic goods that energy exports used to pay for, fueling public anger against the regime (Photo: Wikimedia Commons | Licence details). 

Because of U.S. restrictions, Iran does not receive “sticker price” for the oil it sells. A number of factors slice into its revenue: the regime must sell at a discount to encourage risk-averse buyers, engage in costly clandestine efforts to conceal the oil’s origin, and navigate banking restrictions that limit its access to the resultant revenue. Moreover, the IRGC helps smuggle this oil and siphons off some of the sale money to support its activities and fund its foreign militia proxies.

According to various tracking firms, Iranian oil exports during this April-July period averaged 620,000-980,000 bpd (including Iranian exports of condensate, but excluding exports to Venezuela and Syria, since the government may not be paid directly for these sales). When one multiplies these volumes by the average Brent price of $113 and subtracts the allocations discussed above, the government should have earned between $8.6 and $13.5 billion from those sales. In other words, it lost as much as half of its oil revenue to discounts, transaction costs, lack of accessibility, and other impediments.

Policy Options

To widen the gap between the regime’s potential and actual earnings from oil sales, the United States should take steps that force Tehran to adopt even more costly and complex black market strategies—mainly by increasing the risk perceptions of companies, banks, and governments that engage in or permit this trade. Specifically, Washington should:

• Pressure countries to increase their domestic enforcement efforts by pointing out that every barrel sold by Iran funds the regime’s support for Russia’s invasion of Ukraine, its domestic repression, and its malign regional activities. In particular, U.S. officials should elevate the importance of this issue in bilateral conversations with China, India, Malaysia, Singapore, and the UAE.
• Escalate the tempo of energy-related sanctions designations to create a climate of uncertainty and anxiety among individuals, companies, and countries involved in shipping or purchasing Iranian energy products.
• Issue updated guidance from the Treasury and State Departments and the Coast Guard regarding the techniques that oil smugglers use to evade maritime sanctions, including details about common locations for ship-to-ship transfers.
• Increase the State Department reward for information on illicit IRGC financial networks, launching a public outreach effort in Persian to raise the program’s profile.

All of these measures could be implemented quickly—though continued uncertainty about the implementation of a price cap on Russian oil may argue for some caution in the coming weeks. As for concerns that increased U.S. pressure could result in a major drop-off in Iranian oil exports and thereby raise global prices even higher, Saudi Arabia likely has sufficient spare capacity to compensate for this risk. Despite their recent turmoil on oil policy, Washington and Riyadh are aligned in their desire to constrain Iran, which should foster cooperation on this issue; the kingdom also has an interest in keeping oil prices from surging past a sustainable level.

Finally, Washington will need to deter the Iranians from retaliating militarily against any substantial increase in U.S. pressure, as they did in summer 2019. Potential deterrent steps include strengthening U.S. defensive deployments in the region as well as intelligence, surveillance, and reconnaissance capabilities. Such efforts could have the added benefit of giving Washington another platform for encouraging the Abraham Accords countries and Saudi Arabia to cooperate on information sharing and defending against mutual threats.

Henry Rome is a Senior Fellow at The Washington Institute for Near East Policy, specializing in Iran sanctions, economic, and nuclear issues.