Iran Bulletin: JCPOA talks, Israel-linked Sabotage Attacks in Iran, Iran-Russia competition over sanctioned oil sales & more

This week's edition of the Iran Bulletin will cover the latest developments in the JCPOA talks, negotiations over delisting IRGC from US FTO, the impact of Western sanctions on Russian oil and Iranian energy exports, Iran-UAE thawing relations, the impact of Lebanese elections on Iranian influence in the country, and the recent protests in Iran.?

For Iran Strategy Deconstructed, IPD Research Associate Pouyan Kimiayjan will share his views on the future of the nuclear talks in light of the IAEA Board of Governors’ meeting next week as well as recent alleged Israeli attacks in Iran.?

JCPOA - Chances of Revival Running Thinner Than Ever

Diplomats are facing their last opportunities to revive the nuclear deal as Iran’s nuclear program continues to advance and the agreement signed by the International Atomic Energy Agency (IAEA) and Tehran nears its expiration date on June 6th, 2022.?

One of the main points of conflict and distrust between Tehran and the international community had been Iran's demand for the closure of the IAEA's investigation into uranium particles found at three old (pre-2003) but undeclared sites. Those sites suggest that Iran may have had nuclear material there that it did not declare to the agency.

Iran and the IAEA had agreed on a three-month plan on March 5 for a series of exchanges after which IAEA chief Rafael Grossi "will aim to report his conclusion by the June 2022 (IAEA) Board of Governors" meeting, which begins on June 6. However, it remains unclear if Iran is ready to fully cooperate with the IAEA considering the stalemate in Vienna talks to restore the JCPOA.?

On Monday, Iranian officials stated that they awaited a US response to “solutions” discussed with the EU envoy for breaking the stalemate. The discussions took place between the European Union's coordinator for nuclear talks with Iran, Enrique Mora, and the Islamic Republic's chief negotiator Ali Bagheri in Tehran last week. This prompted EU Foreign Policy Chief Josep Borrell on Friday to state that Mora's mission to Tehran went "better than expected" and the stalled negotiations "have been reopened." Despite such a statement, the negotiations continue to be on hold.

This week, IAEA Director-General Rafael Grossi is meeting Israeli Prime Minister Naftali Bennet to discuss and address Iran’s nuclear program before the agency’s Board of Governors meeting on June 6th. It is expected that the US, France, Britain and Germany are pushing for the Board of Governors to condemn Iran for failing to address questions regarding uranium traces at undeclared sites.?

In response, Iranian Foreign Ministry spokesman Saeed Khatibzadeh warned that Iran “will naturally respond in a strong and appropriate manner to any unconstructive actions taken at the board of governors. Those using the (IAEA) Director General’s report as a political tool and means of pressure against Iran will be solely responsible for the ensuing consequences.”

Watch IPD’s recent panel discussion titled “Iran Nuclear Deal: The Path Forward”, hosted as part of the Middle East Strategy Forum 2022, which discusses the current situation in more depth with experts joining us from Tehran and Washington.

The Biden Administration Set on Keeping IRGC on FTO List?

Politico reported that President Biden has finalized his decision to keep the Islamic Revolutionary Guard Corps (IRGC) on the Foreign Terrorist Organization blacklist, citing one Western official. The Biden administration has so far refrained from publically confirming the report. Meanwhile, Israeli Prime Minister Naftali Bennet has endorsed the report, reporting that President Biden had notified him of this decision on April 24th, a month before the Politico report.?

The designation of IRGC as a terror organization was first enacted by the Trump administration, the first such designation against a country’s official military wing. Think-tankers close to the Trump team had argued that the designation would serve as a political obstacle to Democratic efforts to restore the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran nuclear deal.?

The US Special Envoy for Iran and top nuclear negotiator Robert Malley has stated that "we’d made clear to Iran that if they wanted any concession on something unrelated to the JCPOA – like the FTO designation – we needed something reciprocal from them that would address our concerns. He added that “Iran has decided that it’s not prepared to take reciprocal steps; they have to decide now if they are prepared to reach a deal without extraneous demands.” He refrained from confirming Politico’s report on President Biden’s final decision on the FTO label.?

In response to the report, the Iranian Foreign Minister Amir-Abdollahian downplayed the IRGC designation as a major obstacle in the talks, suggesting that the Israelis bolded the issue to sabotage the talks. Instead, Iran wants to focus on securing guarantees that the deal would deliver economic dividends to Iran. Such a position signalled Iran’s willingness to move past the IRGC issue, at least at this stage of the talks, to keep the negotiations afloat.?

The US Sizes Iranian Oil Near Greece; Iran Retaliates by Confiscating Two Greek Cargo Ships in the Persian Gulf

The US?confiscated?Iranian oil onboard a Russian-operated ship near Greece, further escalating tensions with Iran amid stalled nuclear talks in Vienna. The US is?reportedly?planning to send the oil cargo to the United States aboard another vessel.?

In parallel, the US also recently imposed sanctions on what it described as Russian-backed money laundering and oil smuggling for Iran's Revolutionary Guards' Quds Force (IRGCQF).

In response, Iran first summoned the Swiss Ambassador (who represents US interests inside Iran), reportedly?demanding?the immediate release of the Pegas, the Iranian flagged tanker held in Greek waters. Iran's Ports and Maritime Organization called the confiscation "a clear example of piracy", as the tanker had sought refuge in Greek waters due to technical difficulties and poor weather conditions.?

Subsequently, Iran moved to?confiscate?two Greek oil tankers in the Persian Gulf, citing the ships’ violations near Iranian waters. Iran had previously?confiscated?the British-flagged oil tanker Stena Impero after an Iranian oil tanker was seized by UK Royal Marines near Gibraltar. Stena Impero was released following the Iranian tanker’s dismissal.

Russian oil ban undermines Iranian black market oil exports

The war in Ukraine has triggered an?energy competition?between Iran and Russia, both sanctioned and isolated by the United States and its allies. Currently, Russia is the world's second oil exporter, after Saudi Arabia. As the European Union joins the United Kingdom and the United States in sanctioning Russian oil, buyers of unsavory oil will have more options, triggering a price war between sanctioned crude oil producers in the black market.

Meanwhile, China remains one of Iran's only major oil importers, keeping the Iranian economy afloat amid US crippling sanctions. Following Russia’s invasion of Ukraine, China steadily?decreased?its oil purchase from Iran, moving toward importing cheaper Russian energy instead.

Sayyed Hamid Hosseini, the President of the Union of Exporters of Oil, Gas, and Petrochemical Products in Iran, has?argued?that the country may lose its share in the Chinese oil market. Hosseini stated that in contrast to Iran’s heavily sanctioned oil sector, Russian oil has not been targeted by US secondary sanctions, making it more attractive to Chinese buyers.

On the other hand, it must be noted that the ongoing lockdown in China may?affect demand and limit?how much oil the country can import from Russia. It remains to be seen whether China continues to replace Iranian energy with Russian oil This may also weaken Iran’s negotiating position in its ongoing nuclear talks with Western powers.?

Protests in Iran, US expresses support for anti-government protesters?

The Islamic Republic is continuing to experience a wave of anti-government?protests, creating internal unrest and political pressures. Triggered by a sudden hike in food prices, protests began last month in some towns and cities across the country. Some protesters were met with violent crackdowns by Iran’s security forces and the internet was temporarily cut off in some regions.

In the first official reaction by the Biden administration, US State Department Spokesperson Ned Price said in a?tweet?on Sunday regarding the protesters, “We support their rights to peaceful assembly and freedom of expression online and offline—without fear of violence and reprisal”. He added that?“brave Iranian protestors are standing up for their rights”.?

On the US’ direct role in exacerbating the civil conflict, an independent United Nations expert?stated?Wednesday that the impact of sanctions imposed by the United States on Iran was "devastating"–– describing them as illegal and urging them to be lifted.

"During our visit, we were able to identify (the) devastating humanitarian impact of sanctions. The measures imposed against Iran violate international law -- they are illegal”, said Alena Douhan, the UN special rapporteur focused on the impact of unilateral sanctions.

Iran’s efforts at easing tensions with UAE

Recently, Iran’s top diplomat, Foreign Minister Hossein Amirabdollahian?traveled?to the United Arab Emirates (UAE) to pay his respects following the death of President Khalifa Zayed.?

The trip represented the highest-level visit by an Iranian official since the Houthi rebels launched a?deadly strike?against the UAE in January. The Houthis, backed by Iran, had previously claimed responsibility for the launching of four Quds cruise missiles aimed at different targets including an oil refinery in Musaffah district and the airports in Abu Dhabi and Dubai. Despite the rising tensions and alleged Iranian support for the Houthis,?Iran and the UAE made great efforts to engage diplomatically to de-escalate tensions and navigate potential areas of collaboration to?improve?their bilateral relations.?

The easing of tensions is timely given Iran’s need for regional cooperation amid a stalemate in the nuclear negotiations. The indirect talks between Tehran and Washington to revive a 2015 nuclear deal have stalled since March over Iran’s demand for removing the Iranian Revolutionary Guard Corps (IRGC) from the US Foreign Terrorist Organizations (FTO) list and further guarantees for the new agreement. Amirabdollahian's trip?coincided?with the visit of a high-ranking U.S.?delegation, headed by Vice President Kamala Harris, to Abu Dhabi to also offer condolences on the death of President Khalifa bin Zayed.

The size and seniority of the US?delegation?indicate an effort to ease?recent tensions?between the US and the UAE, which grew after the UAE had?called?on the Biden administration to swiftly redesignate the Houthis to the FTO list. This call was made in response to the drone attack on Abu Dhabi in January that left three dead.?Yet, the Biden administration hesitated, only recently taking the issue under?‘consideration’––as it remains to this day. While voicing unwavering support for the UAE, the Biden administration had originally?removed?the designation in fears of stifling aid and the economy in war-torn Yemen.?

Nevertheless, the United States continues to back the UAE amid the ongoing war in Yemen. Last week, F-22 fighter jets?arrived?at an airbase in the UAE following several unprecedented attacks in Abu Dhabi by Houthi forces.

Lebanese elections: A political blow to Hezbollah and Iran’s influence

In recent Lebanese elections, the Hezbollah camp has?lost?its parliamentary coalition majority and delivered significant gains to the militia’s rivals as well as to the protest movement that swept the country in a 2019 uprising, final results showed Tuesday.

Hezbollah, which formerly occupied the largest bloc in parliament, is largely?blamed?for the country’s economic collapse. Yet, the group denies responsibility for the economic situation, citing the high levels of corruption among political rivals within the Lebanese parliament.?

With the election, new reformist political?groups?have emerged on the Lebanese political scene, garnering 10% of the country’s parliamentary seats, in contrast to the one seat they won in the previous round of elections in 2018. Coming to carve out a significant portion of the parliamentary seats, these groups have the potential to alter the dynamics of the highly fractured Lebanese parliament.?

Revolutionary guards official assassinated in Tehran, 'accident' at Iranian military complex kills engineer

Last week, two gunmen on a motorbike assassinated Sayad Khodai, a Colonel at the Revolutionary Guards’ Quds Force, as he sat in his car outside his home in Tehran. According to the New York Times, the attack was?reportedly?carried out by Israel’s Mossad.?

Iranian state media?labeled?him as a “defender of the shrine”, referring to Iranian troops serving in Syria to protect Shiite shrines against ISIS and Al-Qaeda affiliated groups. Iran’s President Ebrahim Raisi blamed "the hands of global arrogance”, hinting at the US and its allies in West Asia, and vowed revenge for the killing.

Meanwhile, Iran's Defence Ministry has?confirmed?that an “accident" has occurred at the Parchin military complex near Tehran, killing engineer Ehsan Ghadbeigi and injuring another person. Iranian state media had earlier reported an "industrial accident" at the military site, which had previously experienced several security incidents. In June 2020, Iranian officials reported a “gas tank” explosion at the Parchin complex. Iran’s main regional rival, Israel, has long been accused of carrying out?sabotage attacks?against nuclear and military sites inside the country.?

The New York Times has?reported?that suicide drones launched from inside Iran were responsible for the incident in Parchin, fitting a pattern of Israeli attacks against critical Iranian sites and that Tehran views this incident as an attack.?Iranian officials had?previously argued?that Israeli attacks inside Iran are aimed at sabotaging the nuclear negotiations between Iran and world powers.?

Iran Strategy Deconstructed

Strategic Anticipation: The impact of Israel-linked sabotage attacks on Vienna talks

By?Pouyan Kimiayjan, Research Associate, Institute for Peace & Diplomacy

These attacks are primarily intended to alter Iran’s negotiating position in the ongoing nuclear talks. But what is more important here, in my view, is that Washington has intentionally refused to prevent and or condemn these attacks. This is not to suggest that Tel Aviv and Washington share a common goal. The Biden administration ultimately hopes to restore the nuclear deal, while Israel, on the other hand, conducts these attacks to sabotage the talks and prevent the revival of the JCPOA. Nevertheless, despite Israel’s intentions, Washington may hope to leverage these attacks to exact further concessions from Iran. Tehran understands this as well.

It is imperative to point out that green-lighting Israeli attacks can further complicate Washington’s own policy of reviving the deal. Already, Israel has successfully managed to frustrate the talks via emboldening the IRGC FTO issue. Through assassinating IRGC personnel as well as leaking news of President Biden’s position on the FTO issue in late April, Israel has effectively limited Washington’s room for maneuverability in future talks on IRGC’s terror designation.

In parallel to allowing Israeli military attacks against Iranian installations, Washington is coordinating with its European counterparts to impose political pressure on Iran through the IAEA. The US, France, and the UK are currently drafting a resolution for the upcoming Board of Governors meeting on June 6th. The IAEA chief’s upcoming meeting with Israeli Prime Minister Naftali Bennet is a clear signal that the agency is taking recent Israeli claims about Iran’s past nuclear activity seriously and is in favour of a stronger draft resolution against Iran.

However, we must remember that Trump’s maximum pressure campaign, which remains in practice today, only fueled the advancement of Iran’s nuclear program. Therefore, any further escalatory measures will trigger a stronger Iranian response. For instance, if Western powers take stronger action through the IAEA, Iran may further restrict the agency’s access to its nuclear sites. This vicious cycle can frustrate the talks to the point of no return unless the Biden administration takes concrete steps to restore the original pact first. This helps the US to address the urgent issues at hand and prevent an Iranian nuclear crisis while building a foundation upon which other outstanding issues can be addressed in a more constructive environment.

MESF 2022

Watch recordings from the 2022 Middle East Strategy Forum

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