Iran Could Still Strike Back at the U.S.

The Islamic Republic is too weak to wage a conventional war on the U.S. — but that doesn’t mean it poses no threat.

How might Iran respond to the death of Qasem Soleimani? Ever since the Trump administration’s January 3 killing of Soleimani, the Islamic Republic’s top military commander, that question has been on the mind of policymakers in Washington and the American public at large.

Iran’s January 8 rocket attack on U.S. military bases in Iraq clearly constituted part of its response, but Iranian leaders quickly made clear that more retaliation is forthcoming. Supreme Leader Ali Khamenei himself has said that, while the rocket attack was a “slap” at the United States, it was “not enough,” and the Islamic Republic will continue its opposition to the United States with the ultimate goal of driving America out of the Middle East altogether.

Doing so, however, is likely to prove difficult for Iran. As a recent analysis by CNBC notes, sanctions leveled by the Trump administration over the past two years have inflicted extensive damage on the Iranian economy. The country’s GDP shrunk by nearly 10 percent last year, and its exports of crude oil declined from a peak of 2.5 million barrels per day to less than 500,000 daily.

Domestic conditions, meanwhile, are deteriorating. Inflation is on the rise within the Islamic Republic and is now pegged at over 30 percent. So, too, is joblessness; nearly a fifth of the country’s workforce is currently estimated to be unemployed. Meanwhile, governmental expenditures have surged as Iran’s ayatollahs struggle to keep a lid on an increasingly impoverished, and discontented, population.

All of this, according to CNBC’s analysis, profoundly limits Iran’s ability “to fund a war” against the United States. But that doesn’t mean the threat from Iran is nonexistent. Iran still has the ability to “ramp up its aggression against the U.S.” through the use of its network of proxy forces in the region.

That network is extensive — and lethal. It comprises not only Iran’s traditional terrorist proxies, such as Lebanon’s Hezbollah militia and the Palestinian Hamas movement, but also assorted Shiite militias in Iraq (the so-called “Hashd al-Shaabi”) and even Yemen’s Houthi rebels. Recently, it has also made use of theShi’a Liberation Army” (SLA), a group of as many as 200,000 Shiite fighters — drawn from Afghanistan, Yemen, Pakistan, and elsewhere — that has been trained and equipped by Iran’s Islamic Revolutionary Guard Corps and deployed to foreign theaters such as Syria.

Notably, these forces appear to have been thrown into chaos, at least temporarily, by the killing of Soleimani. Reports from the region suggest that Iraqi militias are “in a state of disarray” after the death of the Iranian general, and aren’t currently ready to strike U.S. or allied targets. Over time, however, we can expect Tehran to regain control and direction of its troops and weaponize them anew against the United States and regional U.S. allies such as Israel, Saudi Arabia, and Bahrain. That is doubtless the top priority of Soleimani’s successor as head of the Quds Force, Esmail Ghaani, who has already commenced outreach to Iranian proxies in an effort to reinforce Tehran’s support for “resistance” activities.

Tehran likewise has another potent tool by which to target the United States: cyber warfare. Over the past decade, the Iranian regime has made enormous investments in its cyber-war capabilities and carried out a series of demonstration attacks on targets such as Saudi Arabia’s state oil company and various U.S. financial institutions to showcase its newfound technological prowess. In the wake of President Trump’s pullout from President Obama’s 2015 nuclear deal, Iran reshaped its cyber-activism against the United States, focusing less on offensive attacks and more on gathering information about potential policy from the notoriously opaque new administration in Washington.

But Tehran’s potential to do significant harm to the U.S. in cyberspace remains. Indeed, the U.S. Department of Homeland Security has warned publicly that Iran could carry out a cyberattack against critical U.S. infrastructure in the near future, with potentially significant “disruptive effects.” And so far, neither the Pentagon nor the State Department has articulated much by way of a strategy to deter Iran from carrying out such attacks, or to mitigate the damage they could do. (In the aftermath of Soleimani’s killing, that lack of strategy has become a matter of growing concern on Capitol Hill.)

Perhaps the most compelling reason to expect an asymmetric Iranian response to Soleimani’s killing, however, is that asymmetric warfare plays to Iran’s inherent strengths. Ever since the regime’s grinding eight-year war with neighboring Iraq in the 1980s — a conflict that Iran lost handily — its leaders have exhibited a strong penchant for military asymmetry over direct confrontation. This preference has only been reinforced by persistent Western sanctions, which have eroded the country’s conventional military capabilities and made the acquisition of spare parts and matériel considerably more difficult.

Soleimani was the regime’s principal architect of asymmetric war, and had devoted nearly a quarter-century to building up the Islamic Republic’s asymmetric potency. That is precisely why his targeted killing by the Trump administration represents such a significant blow to the integrity of Iran’s proxy network — and to the prudence of its time-tested asymmetric strategy. Going forward, Tehran may well have to rethink its approach, and could conclude that the potential costs of continuing its campaign of aggression against U.S. forces in the region are now simply too high. If it doesn’t, however, the very capabilities that Soleimani spent his career cultivating will remain the most potent weapons the Islamic Republic has to wield against the United States.

Gibraltar rejects U.S. request to seize Iranian oil tanker

A Gibraltar court rejected a U.S. attempt to seize an Iranian oil tanker on Sunday, clearing the way for the ship to resume its journey in the Mediterranean under the Iranian flag and with a new name.

The Grace 1 supertanker, renamed the Adrian Darya 1, has been anchored off Gibraltar since it was intercepted by the British navy on July 4 on the grounds that it was carrying oil to Syria in violation of European Union sanctions. Authorities in Gibraltar lifted the detention order last week after Britain, which rules the territory, received assurances from Iran that the tanker would not take its cargo of 2.1 million barrels of oil to Syria.

But late Friday, the United States intervened, issuing a warrant for the seizure of the ship and its cargo, claiming it was violating not only U.S. sanctions against Syria but also those against Iran.

The Gibraltar court ruled that the American sanctions on Iran, which were imposed by President Trump after he walked away from the Iran nuclear deal last year, do not apply in the European Union.

The sanctions violations charged in the U.S. warrant “would not constitute offenses had they occurred in Gibraltar,” the government said in a statement. “There are no equivalent sanctions against Iran in Gibraltar, the UK or the rest of the EU.”

Among the charges laid out in the U.S. warrant is that the tanker was facilitating terrorism because of the involvement in Iran’s oil industry of the Islamic Revolutionary Guard Corps, which is designated a terrorist organization by the United States. The Gibraltar ruling noted that the E.U. does not regard the IRGC as a terrorist organization.

The court’s rejection of the U.S. request raises new questions over where the tanker will go next and whether the United States will attempt to intervene again, perhaps by forcibly intercepting it. No such action has been proposed, but Iranian media speculated that the U.S. Navy, which maintains several bases in the Mediterranean, might attempt to seize the vessel.

Iran’s navy commander, Rear Adm. Hossein Khanzadi, offered to dispatch the Iranian navy to escort the Adrian Darya 1, according to Iran’s Mehr news agency.

The tanker had been set to leave Gibraltar on Friday after the court lifted its detention order, but the captain and five crew members quit, leaving the ship’s owners to recruit replacements.

Photographs posted on social media showed the vessel, painted with its new name and flying the Iranian flag, being readied for departure by men in orange uniforms.

It was unclear whether Iran would release the British tanker seized in the Persian Gulf in apparent retaliation for Britain’s detention of the Grace 1, as the ship was then called.

Trump’s Iran sanctions are working. But it’ll take more to topple the regime.

Trump’s goal is not to start a war. His administration has three objectives:

  1. First, restore deterrence and contain Iran’s expansionism across the Middle East.
  2. Second, roll back Iran’s gains and force it back within its borders.
  3. And third, give Iran’s leaders a clear choice: They can come to the negotiating table, give up their nuclear and missile ambitions, and act like a normal country — or their regime can implode, just like the Soviet Union.

When Trump came into office, Iran was on the march across the Middle East —

  • in Syria,
  • Lebanon,
  • Iraq and
  • Yemen

— thanks to the Obama administration’s failure to confront Iranian aggression and the massive infusions of cash it received from sanctions relief under President Barack Obama’s Iran deal. Trump withdrew from the deal, but he did not simply restore sanctions imposed before it; he ramped them up to unprecedented levels. The sanctions have already “wiped $10 billion from Iranian revenue since November,” The Post reported, citing administration officials.

This month, the administration tightened the screws even further, eliminating waivers for eight countries that had previously been allowed to continue importing Iranian oil. The goal, according to American officials, is to reduce Iranian oil exports to “zero.” It’s working. Bloomberg News reports that “Iran’s oil shipments tumbled this month after the U.S. ended sanctions waivers. . . . So far, not a single ship has been seen leaving Iran’s oil terminals for foreign ports.”

The new sanctions are forcing Tehran to cut funds to its terrorist proxiesAccording to The Post, “Iran’s ability to finance allies such as Hezbollah has been curtailed,” while in Lebanon, the New York Times reports, “Syrian militiamen paid by Iran have seen their salaries slashed” because, to quote one fighter, “Iran doesn’t have enough money to give us.” On Tuesday, Secretary of State Mike Pompeo told Congress that “Iran’s proposed defense budget has been reduced by 25 percent and the [Iranian Revolutionary Guard Corps’] proposed budget by about 10 percent.”

Iran is obviously unhappy with this, and U.S. intelligence saw signs that Iran was preparing to respond with attacks on Americans using terrorist proxies — just as they did in the 1983 Beirut Marine barracks bombing and the 1996 Khobar Towers bombing in Saudi Arabia, and by supplying Shiite militias in Iraq with armor-penetrating roadside bombs that killed hundreds of American soldiers.

So the Trump administration delivered a clear message that America will hold Iran directly responsible for any attacks on Americans, even if they are carried out by surrogates — and offered a show of force to back those threats. Far from making war more likely, this kind of clarity makes it less likely that Iranian leaders will miscalculate — because they know the consequences.

Sanctions are inflicting major pain. But if the goal is not only to contain but also to roll back Iran’s expansionism, then sanctions alone are not enough. We must also aggressively confront Iran throughout the region, building up our allies and bleeding the Iranians wherever we caninflicting defeats on them in critical theaters such as Syria and Iraq, just as President Ronald Reagan did to the Soviets during the Cold War.

A major drawdown of U.S. forces in Syria is incompatible with a “maximum pressure” approach.

Will Iranian leaders come to the table? Far less draconian sanctions brought Iran to the negotiating table under Obama. But Trump has rightly paired tougher sanctions with tougher demands. Pompeo has laid out 12 requirements for a deal with Iran — including an end to support for Middle East terrorist groups and a complete withdrawal from Syria — that Iran is unlikely to meet.

If they don’t come to the table, then what is our strategy? Does Trump really want to bring about the collapse of the Iranian regime? It’s not clear. If he does, then, as my American Enterprise Institute colleague Frederick W. Kagan points out, this task may be even harder than it was with the Soviet Union. As North Korea has shown, tyrannical regimes can survive even crippling sanctions. Certainly, the world will be better if Iran is focused on survival rather than expansion and terror. But it will take more than sanctions to leave the Iranian regime on the ash heap of history. That requires a strategy.

The American president is stirring up trouble in a volatile oil market

If he cannot arm-twist OPEC, he may unleash America’s Special Petroleum Reserve

.. markets are being buffeted by three countervailing forces unleashed by President Donald Trump:
  1. his geopolitical agenda, particularly sanctions on Iran;
  2. his domestic political agenda, to lower American petrol prices before the mid-term elections; and
  3. his looming trade war with China.

If he does not get his way, he may have a dangerous weapon up his sleeve—America’s Strategic Petroleum Reserve (SPR). His meddling risks making OPEC, the oil cartel that is a focus of his wrath, look like a paragon of predictability.

.. adding fuel to the price rally is the Trump administration’s pressure on America’s allies to cut oil imports from Iran to zero by November 4th, or face punishment for violating American sanctions. This is more draconian than expected.

.. on July 2nd that more than 50 international firms, including energy ones, had agreed to pull out of Iran. Though America may allow some countries—possibly Turkey, France and others—to reduce imports rather than cut them completely, it will not grant any waivers.

.. a “zero-barrel” response could see between 800,000 and 1.05m b/d of Iranian crude come off the market, with the squeeze starting in September, 60 days of shipping time before the sanctions kick in.

.. In an interview on Fox TV aired on July 1st, he ordered OPEC to stop manipulating the market, threatening some of its members with the loss of American protection if they do not.

.. the highest level of production Saudi Aramco, the state-owned oil giant, has tried out for any length of time is 11m b/d (it is about 10.3m b/d at the moment). But keeping production at that level for several months would damage its reservoirs. Pumping 12m b/d would also take spare capacity in the global oil market to uncharted lows, exposing it dangerously to supply shocks.

.. Complicating things is the imminent risk of an America-China trade war. China has threatened tariffs on American oil imports if retaliation meets more retaliation.

.. China may pay no heed to American sanctions on Iran, which would further stoke tension between the two.

.. These factors, some bullish for oil prices, some bearish, may offset each other. But they have already had the unfortunate consequence of putting Mr Trump alongside the rulers of Saudi Arabia and Russia in the driving seat of global oil policy. Shale producers, who cannot respond to price signals anything like quickly enough to please Mr Trump, are sidelined

.. Analysts predict that if petrol prices continue to rise ahead of the mid-terms, Mr Trump will use a release of up to 30m barrels from the SPR to flood the market. That would be tantamount to launching an oil war against OPEC and Russia, in addition to the trade war. But it cannot be ruled out.