New Sanctions against Central Bank of Iran

Oil Payments Targeted

President Barack Obama today signed legislation imposing sanctions on financial institutions dealing with the Central Bank of Iran (CBI). The new law, approved by Congress last week, is intended to reduce Iran’s oil revenues by curtailing the ability of Iran’s oil customers to make payments for imports that must go through the CBI, the main conduit for Iran oil transactions. The legislation, however, gives the president the authority to waive sanctions on case-by-case basis.

Reuters reported that senior US officials were engaging with allies to ensure the sanctions can work without harming global energy markets. The US is also expected to continue its strategy of engaging with Iran despite the new sanctions.

Last week, the Iranian officials had threatened to close the Strait of Hormuz, stopping the flow of oil from the Persian Gulf, if the new legislation would curtail Iran’s ability to export its oil.

UPDATE: The sanctions against the private and state banks—including CBI—would take hold after a two- to six-month warning period, depending on the transactions, a senior administration official has told Reuters.

Under the law, the president can move to exempt institutions in a country that has significantly reduced its dealings with Iran and in situations where a waiver is in the US national security interest or otherwise necessary for energy market stability. He would need to notify Congress and waivers would be temporary, but could be extended.

“Our intent is to implement this law in a timed and phased approach so that we avoid repercussions to the oil market and ensure that this damages Iran and not the rest of the world," the senior US official told Reuters [Reuters, 31 December].

Missiles for UAE; Fighter Jets for Saudis

Massive Defense Buildup in the Region


The US has reached a deal to sell $3.48 billion worth of missiles and related technology to the United Arab Emirates. The agreement came days after the announced sale of $30 billion worth of F-15SA fighter jets to Saudi Arabia. The two agreements are part of a massive defense buildup by Arab states of the Persian Gulf amid rising tensions in their relationships with Iran.

The UAE deal includes 96 missiles, along with supporting technology and training support, including a contract with Lockheed Martin to produce the highly sophisticated Terminal High Altitude Area Defense, or THAAD, weapon system for the country. This is the first time the THAAD system is sold to a foreign military [AP, 31 December].

The US is already upgrading the Saudi’s Patriot missiles at a cost of $1.7 billion, and is providing 209 Patriot missiles to Kuwait valued at $900 million.

The F-15SA deal with the Saudis includes 84 new fighter jets and upgrades for 70 more.

Top Photo: Terminal High Altitude Area Defense (THAAD) interceptor missile being test launched. 5 October 2011. U.S. Missile Defense Agency/AP.

Bottom Photo: Saudi F15SA Strike Eagles. Boeing/The Washington Post.

Velayat-90 Military Maneuvers (4)

click photos to enlarge

Iran Navy Agusta AB-212 ASW and SH-3D Sea King (AS-61) helicopters

Iranian commando frogman dropped from Agusta SH-3D Sea King

Iranian commando frogman team in inflatable rubber raiding craft

Assortment of FB type and Ashura class inshore patrol craft (PBF)

and a Sea-Doo RXT-X 255 watercraft, all manned by IRI Marines

FB type equipped with 107 mm MLRS in action

Late model Sea-Doo RXT-X 255 watercraft

Inshore patrol craft firing HM-23 16 round 122mm MLRS

Gunners loading a 16 round 122mm MLRS

IRI Marines armed with G3A4 battle rifles

IRIAF McDonnell Douglas F-4E Phantom II fighter-bomber

IRIN Commander Read Admiral Sayyari with a commodore and lieutenant junior grade

A Note on China-Iran Relations

By Nader Uskowi

Iran’s oil exports to China this year amounted to 25% of all its oil exports, and growing: If the daily averages of China’s imports for the last two or three months are maintained (with many expecting them to actually rise), then in 2012 China will be importing nearly one-third of all Iran’s oil exports. Iran in return is importing Chinese goods on a massive scale.

China has truly become the lifeline of the Iranian economy, and one of the country’s remaining supporters at the world’s stage. In turn, Iran has truly become dependent on China, more so than the previous regime was dependent on the West.

Aside from the obvious negative implications of such a dependency for the country, there is a positive aspect to it, especially during these tense days: China remains the only country that can actually influence the Iranian policy, pushing it toward moderation. That’s what the Chinese vice foreign minister was doing in Tehran in the past 48 hours, and hopefully that’s what the Chinese will continue doing to avoid a military conflict involving Iran.

China Calls for Peace and Stability in the Strait of Hormuz

Chinese Senior Official Visits Tehran

Chinese Vice Foreign Minister Zhai Jun ended his visit to Tehran on Thursday after talks with Iranian Foreign Minister Ali Akbar Salehi and other senior officials amid growing tensions over Iran’s threat to close the Strait of Hormuz if new sanctions were to curtail the country’s ability to export oil.

“China hopes that peace and stability can be maintained in the strait,” the Chinese Foreign Ministry spokesman Hong Lei told reporters on Thursday [Reuters, 30 December].

China imported 547,000 barrels per day of crude from Iran this year, up from 426,000 barrels per day in 2010. Only Saudi Arabia and Angola sell more oil to China.

Velayat-90 Military Maneuvers (3)

click photos to enlarge

Iran Marines armed with MP5 SMGs

Marines aboard FB type HSPB

Marine boarding in a simulated assault

Ghadir class IS-120 coastal submarine (SSC)

Ghadir apparently crewed by IRIN

Background: Mk III class coast patrol craft (PB)

Kilo class (Project 877 EKM) diesel-electric submarine (SSK)

Crew of a Kaman (Combattante II) class fast attack craft-missile (PGGF)

Bridge of a Kaman fast attack craft-missile

IRIN officer aboard Kaman fast attack craft-missile

IRINS Larak (LSLH 512) Hengam class landing ship

Left: Handijan class (PBO 1410) tender

IRINA Agusta SH-3D Sea King (AS-61) anti-submarine helicopter

USS John C. Stennis (CVNM 74) Nimitz class nuclear powered super carrier,

reportedly photographed by Iran military aircraft transiting the Straight of Hormuz

IRIN Commander Rear Admiral Habibollah Sayyari

Videos:





Photos:
Hamed Jafarnejad at Fars News Agency
IRNA

Videos:
PressTV

IRINN

YouTube Videos by maydayfire at IMFV

The Hormuz Debacle

By Paul Iddon

The historical implications of Tehran's threat to blockade the Strait of Hormuz.

Satellite image of the Strait.

The gunboat diplomacy between the United States and Iran has had some troubling developments over the past few days. In a response to the possibility of more sanctions on Iran over its nuclear activities threats have been made by the regime to close the Strait of Hormuz, equating it to being easier than “drinking a glass of water.” Vice-President Rahimi has also spoken some tough rhetoric stating that those imposing sanctions “will only drop their plots when we put them back in their place.”

The US Navy has in turn stated that it is “ready to counter malevolent actions to ensure freedom of navigation.” Certainly not an unprecedented nor over zealous statement when one considers that shortly after its inception the United States Navy undertook a military operation against the Barbary states of North Africa in order to curtail the pirating and harassment of international merchant shipping.

One however doesn't need to go back to the 19th century to draw a useful historical analogy of which one could learn about the present situation. Two instances from the late 20th century immediately spring to mind, those being the 1996 Taiwan Strait Crisis and the Tanker War period of the Iran Iraq War. In both cases the United States directly intervened with its naval forces under the pretext of safeguarding international shipping lanes. Whilst the 1996 instance in the Taiwan Strait saw a rather tense stand off it did not escalate into a shooting war between the United States and the Peoples Republic of China. When Iran begun mining the Persian Gulf in the latter years of the Iran Iraq War the US Navy conducted several military engagements against Iranian forces. Under the auspices of the Earnest Will deployment which was launched to effectively deploy warships to steam through any blockade zone that would hinder transit of the waterway the US Navy engaged Iranian warships and in the case of the Sahand destroyed them.

Talk of closing off the Strait has been prominent since the speedboat incident in January 2008 which saw erratic manoeuvres by small fast moving Revolutionary Guard surface vessels near US warships in international waters. This one tense incident saw oil prices rise to a then record high of $100 per barrel. Since then, talk of the possibility and likely consequences of an attack on Iran have seldom excluded the repercussions such an attack would have on the world price of oil if the Iranians were to go through with their threat of closing the Strait. Overlooked by many who focus on the damaging effects such action will have on the western economies is the fact that 50% of China's oil passes through this narrow 34 mile waterway.

The Persian Gulf is certainly a rough neighbourhood these days, where national pride on both sides of its shore is frequently challenged. Iran for instance has felt marginalized in what it considers to be effectively its own backyard, and is aghast and disgusted with its neighbours challenging the historically significant name of the gulf.

My colleague Nader Uskowi recently pointed out there is a strong possibility that if these gulf states feel threatened, now at a time when discontent is at a high among their respective populaces towards their respective governments then there is a plausible possibility and scenario that under the auspices of the GCC - and backed heavily by Saudi Arabia - the UAE may attempt to seize the disputed islands of Abu Musa and and the Greater and the Lesser Tunbs in the Persian Gulf. While such a costly and dangerous endeavor sounds somewhat far fetched (which it would be) I would wager it isn't in the least bit implausible. The Argentine junta for example in 1982 seized the Falkland Islands in a bid to a reassert national pride in a midst of a crippling economic depression and widespread public discontent. Their subsequent defeat at the hands of a large British Task Force led on to the juntas rapid decline, deterioration and dissolution.

Similarly, the Iranian regimes tough rhetoric with regards to the Hormuz issue may simply be a public affairs stunt, an attempt to curb the discontentment that comes with crippling sanctions and the accompanying economic hardship. The aim of such a stunt would be to give the regime the aura of being the authentic 'face' of an Iran struggling to reassert national pride. The very pride they have consistently trampled upon, the pride of a nation they have made a pariah through their policies, and the pride of a nation they are willing to sacrifice over their shady nuclear programme which has seen them engage themselves in an obsessive overproduction of enriched uranium, an obsessive compulsion of which they are seemingly going to risk a war in which to fight for, in the Iranian peoples name, at their risk and costly expense.

IRGC Warns US over Strait of Hormuz

The commander of IRGC Navy (IRGCN) said today the US is not in a position to stop Iran from closing the Strait of Hormuz.

“Americans are not in a position whether to allow Iran to close off the Strait of Hormuz,” said IRGCN Commander Brig. Gen. Hossein Salami [IRNA, 29 December].

“Any threat will be responded by threat ... We will not relinquish our strategic moves if Iran's vital interests are undermined by any means,” Gen. Salami said.

Iran Navy: Monitoring US 5th Fleet

The Iranian Navy said today it has recorded video and photographed a U.S. aircraft carrier during Iran's ongoing naval exercises at the Strait of Hormuz.

“An Iranian vessel and surveillance plane have tracked, filmed and photographed a U.S. aircraft carrier as it was entering the Gulf of Oman from the Persian Gulf,” said Rear Admiral Habibollah Sayyari, the IRIN commander [IRNA, 29 December].

Adm. Sayyari added that the action shows that Iran has “control over the moves by foreign forces.” The Iranian navy is holding a 10-day exercise on and near the Strait of Hormuz. Adm. Sayyari also said the foreign fleet “will be warned by Iranian forces if it enters the area of the drill.” [IRNA, 29 December].

On Tuesday, the aircraft carrier USS John C. Stennis and guided-missile cruiser USS Mobile Bay headed out from the Persian Gulf and through the Strait of Hormuz, after a visit to Dubai's Jebel Ali port. Lt. Rebecca Rebarich, a spokeswoman for the U.S. 5th Fleet, described the passage as “a pre-planned, routine transit” for the carrier, which is providing air support from the north Arabian Sea to troops in Afghanistan [AP, 29 December].

Lt. Rebarich described the 5th Fleet’s interaction with the regular Iranian Navy as “within the standards of maritime practice, well known, routine and professional.” [AP, 29 December].

Closing the Strait of Hormuz

By Nader Uskowi

In the past 48 hours, they have been much talk, mostly of a belligerent tone, coming from Iran and countered by the Pentagon that the Strait of Hormuz, the vital waterway for oil tanker traffic, could or could not be closed. I leave the discussion on the feasibility of closing the Strait by the Iranian naval forces to our own Mark Pyruz and our readers and commentators informed on naval capabilities. Here I examine two scenarios in which Iran would be tempted, indeed forced to attempt closing the Strait.

1. As publicly proclaimed by Iran’s Vice President Rahimi on Tuesday, Iran will attempt to close the Strait, preventing the flow of “even one drop of oil” in the Persian Gulf, if the West were to impose sanctions against the country’s oil exports, the word’s third largest. The West (following the US lead) will not impose such sanctions, not anytime soon, fearing a dramatic rise in oil prices. They might, however, do the same indirectly: putting the Central Bank of Iran (CBI) on the blacklist, therefore disrupting the payments to the Iranians for any import of Iran oil. The US Congress has already passed legislation authorizing President Obama to impose sanctions against the CBI.

2. The second possibility, not much discussed in the press, is if and when the UAE, with the active support of Saudi Arabia, and the behind-the-scene support of the West, occupies the three disputed islands of Abu Musa and the Greater and the Lesser Tunbs in the Persian Gulf. The UAE has claimed the ownership of those islands and the Saudis and the Gulf Cooperation Council, comprising of the Arab states of the Persian Gulf, have backed the UAE claim. If the Saudis and the GCC feel an imminent threat from Iran during a time of rising public discontent with the ruling families, which they appear to be acting as if they do, and if they can get the backing of the US and the West, they might just occupy the three islands in the coming months.

Iran can create much trouble for the occupying armies, but at the end of the day it might not be capable of taking the islands back. Such possibility would have severe, and yet unforeseen consequences inside Iran: the population is told, and generally believes that Iran is a mighty force and no power, least of all the lowly UAE, would dare occupying the three islands. But what if they do, and what if Iran would be unable to take them back? The Iranians would definitely attempt to close the Strait, but if they could not take the islands back, with the Strait closed or not, the public would lose the belief in the invincibility of their government and could turn against it sooner than anyone could pronounce the name of the three islands. And that could well be the ultimate goal of the UAE, the GCC and the Western allies.

The tensions in the region are high. These are critical days, weeks and months in a region that even though has witnessed tense situations before, is now facing the most challenging times in recent memory.

US Navy and the Pentagon Warn Against Attempts to Close Strait of Hormuz

Iran's Naval Commander Had Said Closing the Strait Was "Really Easy"

Hours after Iran’s naval commander, Rear Admiral Habibollah Sayyari, said his forces could close the Strait of Hormuz “very easily,” the US Navy’s Fifth Fleet, which is based in Bahrain and patrols the Strait of Hormuz, responding to Admiral Sayyari’s remarks, said its warships would stop the Iranians if necessary.

“The free flow of goods and services through the Strait of Hormuz is vital to regional and global prosperity,” Lt. Rebecca Rebarich, a spokeswoman for the Fifth Fleet told the Times. “Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will not be tolerated,” Lieutenant Rebarich added. “The U.S. Navy is a flexible, multi-capable force committed to regional security and stability, always ready to counter malevolent actions to ensure freedom of navigation.” [The New York Times, 28 December].

The Pentagon press secretary, George Little, also issued a statement warning Iran against any attempt to close the Strait of Hormuz. Mr. Little, however, added that the US was “unaware of any aggressive or hostile action directed against U.S. ships” at this time [The New York Times, 28 December].

Map: By GraphicMaps.com / WorldAtlas.com

Iran Navy: Closing Strait of Hormuz "Really Easy"

A day after Iran’s first vice president threatened the West with stopping the flow of oil through the Strait of Hormuz if sanctions were imposed on oil exports, the country’s naval commander said closing the Persian Gulf to oil tankers will be “easier than drinking a glass of water.”

“Closing the Strait of Hormuz for Iran's armed forces is really easy ... or as Iranians say it will be easier than drinking a glass of water," said Rear Admiral Habibollah Sayyari. “But right now, we don't need to shut it as we have the Sea of Oman under control, and we can control the transit,” Adm. Sayyari added [Press TV, 28 December].

IRGC Quds Force 'assisting' in Iraqi political crisis

Iraq blocs 'talking to Iran over deadlock'

By Mark Pyruz

According to AFP:

Iraqi political blocs have held talks with Iran over a standoff sparked by a warrant for the arrest of the country's Sunni Arab vice president that has stoked sectarian tensions, officials said Tuesday.

Charges that Vice President Tareq al-Hashemi ran a death squad have plunged Iraq into political crisis, and representatives of several parties have spoken to top officials in Tehran, according to senior political sources in Baghdad and the autonomous Kurdish region, where Hashemi is holed up.

[...]

"Iraqi parties are contacting Iran to mediate over the Hashemi issue," an official close to Prime Minister Nuri al-Maliki said, speaking on condition of anonymity.

Meanwhile, three political sources belonging to parties including the ruling Kurdistania alliance said a senior Iranian delegation met with Kurdish regional President Massud Barzani and Iraqi President Jalal Talabani, a Kurd, in recent days to discuss the Hashemi arrest warrant.

The delegation, which includes officials from the Iranian intelligence service and army, was headed by Sardar Majidi, the deputy chief of the Quds Force of Iran's elite Revolutionary Guards, according to the sources, who did not want to be named.

They said the delegation pushed for a meeting of senior political leaders, but Maliki refused to attend any meeting held in Arbil, and Barzani declined to join talks in Baghdad.

Two independent Kurdish newspapers, Awene and Baas, have also reported that a top Iranian delegation visited Iraq and made the request.

It appears IRGC Quds Force is ever more a pivotal player in Iraqi affairs, involving the near full range of Iraq's political spectrum. This is all the more amazing as the United States government considers IRGC-QF to be a "terrorist organization."

It might even be claimed that Iran -- not the United States -- is and will be the vital influence that effects and maintains Iraqi political stability in the crucial months to come. Iran has long maintained that regional security is best achieved through intra-regional participation, free of external influence. Iraq represents the most visible model for Iran's policy to take effect.

Iran: Sanctions on Oil Exports Will Result in Closure of Strait of Hormuz

Iran's First Vice-President Mohammad Reza Rahimi today threatened the West with closing the Strait of Hormuz, effectively stopping the flow of oil in the Persian Gulf, if sanctions are imposed on its oil exports.

“If they (the West) impose sanctions on Iran's oil exports, then even one drop of oil cannot flow from the Strait of Hormuz," Rahimi said [IRNA, 27 December].

Most of the crude exported from Saudi Arabia, Iran, the UAE, Kuwait and Iraq - together with nearly all the liquefied natural gas from Qatar - must pass through the 34-mile wide (with 2-mile wide shipping lanes) Strait of Hormuz, the shipping channel between Oman and Iran.

Map: By GraphicMaps.com / WorldAtlas.com

Velayat-90 Military Maneuvers (2)

Day 2: Video

Day 3: Video

YouTube Videos by maydayfore @ IMF

Tactical stage begins for joint IRIN/IRGCN maneuvers:

According to Mehr News Agency:

TEHRAN, Dec. 27 (MNA) – The tactical stage of the 10-day naval war games, entitled Velayat-90, started on Tuesday, the commander of the Navy told IRNA.
Rear Admiral Habibollah Sayyari also pointed to the preliminary stage of the war games and said, “Achievements were beyond imagination.”

During the preliminary stage of the maneuvers, Iranian warships, submarines, and other naval vessels spread out across the theaters of operations, which cover a wide area from the Strait of Hormuz to the Gulf of Aden. The deployment of naval units was carried out as naval vessels and helicopters practiced military tactics in preparation for the main stage of the war games.

“We supposed that forces needed more time to spread out across the areas of operations,” Sayyari said, adding that the units, however, acted with speed and efficiency, and “artillery, intelligence, missile, electronic warfare, and other units managed to position themselves in the designated locations sooner than expected.”

The deputy commander of the Navy, Rear Admiral Gholam Reza Khadem-Bigham, also said on Tuesday that during the tactical stage of the maneuvers, the theater of war will be simulated, and naval forces will practice various military tactics.

In this stage, forces will be divided into two groups, namely friendly forces and mock enemy forces, he said.

“Enemy forces, in this stage, should try to enter (the area under the control of) friendly forces, and in response, friendly forces should try to identify and destroy the forces that have the intention of penetrating (into the area),” he explained.

The war games, which started on Saturday, are said to differ from previous ones in terms of the vastness of the area of action and the military equipment and tactics that are being employed.

It has been announced that submarines of the Ghadir class and other classes, warships, missile-firing destroyers, coast-to-sea missile systems, drones, and electronic warfare equipment will be tested during the exercises.

Rear Admiral Habibollah Sayyari, said on December 22 that the war games would be staged in a large area from the east side of the Strait of Hormuz in the Gulf of Oman to the northern Indian Ocean, adding that in terms of intelligence, the maneuvers would cover a vast area stretching from the northern Indian Ocean to the Gulf of Aden.

Iranian-American Accused of Spying on Trial

Amir Mirza Hekmati, an Iranian-American arrested earlier this month, went on trial in Tehran on Tuesday, charged with “cooperating with the hostile government of the US as well as spying for the CIA.” [Fars News Agency, 27 December].

Brazil Becomes Sixth Biggest Economy

In a dramatic illustration of changing global fortunes, Brazil overtakes UK as the sixth biggest economy, the Center for Economic and Business Research reported on Monday. Brazil’s hard-won democracy, vast reserves of natural resources, rapidly-growing and cash-rich middle class and record foreign investments are the engines of its economic surge.

The world's ten biggest economies:

1. USA
2. China
3. Japan
4. Germany
5. France
6. Brazil
7. UK
8. Italy
9. Russia
10. India

File photo of Rio: Daily Mail

Iran's offer of military cooperation with Iraq

Opportunities and challenges for a region in flux

By Mark Pyruz

Left: Iraq Lt. Gen. Zebari. Right: Iran Maj. Gen. Firouzabadi.

According to Xinhua News Agency:

Chairman of the Joint Chiefs of Staff of Iran's Armed Forces Major General Hassan Firouzabadi said that the Islamic republic is ready to expand its military and security cooperation with Iraq, the local satellite Press TV reported on Monday.

In two separate messages to Iraqi Army's Chief of Staff Lieutenant General Babakir Zebari and Iraqi Acting Defense Minister Sadun al-Dulaymi on Sunday, Firouzabadi expressed his country's satisfaction with the withdrawal of U.S. forces from Iraq.

He said that the withdrawal of foreign troops from Iraq was the result of determination and resistance of the Iraqi nation and government.

"We hope the United States has learned a lesson from its nine- year occupation and humiliating defeat in Iraq and never thinks about attacking another country," he was quoted as saying.

According to the report, during a meeting with Iran's Islamic Revolution Guards Corps (IRGC) Ground Forces commander Brigadier General Mohammad Pakpour on Nov. 13 in Tehran, Zebari called for more Tehran-Baghdad military cooperation.

Iraq is facing some security challenges and needs to exchange views with Iran, which is strong in many areas including security, said Zebari.

Iran has said that the only path to the establishment of peace and security in the region is the cooperation of regional countries, without foreigners' intervention.

There is a false narrative circulated amongst certain elements of the U.S. military, punditry and media that USA General Petraeus and the so-called "surge" led to the significant reduction of violence in Iraq in the late 00s. In reality it was largely the work of an Iranian General: IRGC-QF Commander Maj. Gen. Qassem Suleimani. It was Suleimani that helped enable the Shia conquest of Baghdad (occurring to a large extent before the introduction of the U.S. military reinforcement) and it was Suleimani that brokered the truce between the Iraq Army and Shia militias.

IRGC-QF Commander Maj. Gen. Suleimani

It has been speculated by objective Middle East regional observers that without the soft power capabilities of the Islamic Republic of Iran, the government of Iraq would have more resembled that of the Palestinian Authority and the pliable leadership of Abu Mazen (Mahmoud Abbas). Instead, the Iraqis could rely on the offsetting leverage provided by Iran, which was key to Iraq successfully ejecting the U.S. military from its territory. Seen in this light, Maj. Gen. Firouzabadi's remarks can be interpreted as something of a verbal "victory lap" for the Iranians.

It's interesting that Iraq Army Chief of Staff Lieutenant General Babakir Zebari had previously in 2010 voiced concern that his military was not ready for the security challenges posed by a U.S. military withdrawal. It appears Iraq's civilian leadership may be directing him to more closely cooperate with the military-security establishment of Iran. This is likely all the more significant as Iraq Prime Minister Maliki engages in efforts to rollback Sunni political power, such as it is, currently manifesting itself in the arrest warrant of Vice President Tareq al-Hashemi.

The removal of U.S. military forces in Iraq and Iran's pivotal relationship with Iraq now afford Iran with the opportunity of a direct, overland line of communication extending clear across to the Mediterranean Sea, something not fully realized since Sassanid times. Within this context, it is easy to see why NATO is currently engaged in efforts to dislodge President Assad in Syria, not the least reason being to block Iran's greater projection toward this western direction.

Perhaps the American neoconservatives were partly right after all, when during the run-up to the Iraq War they declared "the road to Jerusalem runs through Baghdad." The part they may have gotten wrong, however, is the effective course of that road's direction.

Iran: Economist Forecast for 2012

The Economist in its annual forecast of the world economies, predicted Iran’s rate of economic growth for 2012 to be at 2.2%. In the region, Libya and Iraq are predicted to have the highest growth rates at 13.6% and 10.9% respectively.

The annual rate of inflation for Iran is predicted to be at 16.5%, one of the seven countries with double-digit inflation rate, led by Venezuela at 30.6%.

Photo: The Economist, the New Year edition

Trans-Anatolia: Turkish-Azeri Gas Pipeline

Turkey and Azerbaijan signed an agreement today to build a pipeline to carry 10 billion cubic meters of Azeri gas to European markets, Turkey’s Anatolia news agency reported [Sapa/AFP, 26 December].

The Trans-Anatolia Pipeline, scheduled to be completed in 2017 at the cost of $5 billion, would open Azerbaijan’s huge Caspian Sea natural gas reserves to Europe. Trans-Anatolia will be the second pipeline to be built linking the Caspian to Europe through Turkey. The pipeline, together with another planned pipeline, the Nabucco, is designed to reduce Europe’s dependence on Russian energy supplies.

Moscow is also constructing the South Stream pipeline running from Russia under the Black Sea to Bulgaria, Serbia and Hungary before branching out to Western Europe. That pipeline is scheduled to be completed by 2015.

That leaves Iran and its newly-found huge natural gas reserves in the Caspian still without a pipeline for export.

File Photo: Reuters

UN-Iraq Agreement on Camp Ashraf

The UN and the Iraqi government today signed an agreement to temporarily relocate several thousand Iranian exiles, members of Mojahedeen Khalq Organization (MKO) who are living at Camp Ashraf near the Iranian border, to Camp Liberty, a former US military base near Baghdad International Airport. The arrangement would allow the UN High Commissioner for Refugees to conduct interviews and to determine the refugee status of the camp residents as the first steps to relocate them to other countries. The agreement will prevent a near-certain humanitarian catastrophe that would have awaited the MKO members at Camp Ashraf by 31 December, the deadline set by the Iraqi government for the exiles to vacate Ashraf.

Iran Rejects US Court Ruling on 9/11

Iran rejected the findings of a federal district court in Manhattan that it had provided safe heaven to an Al Qaeda operative involved in the 2001 attacks and is liable. The Iranian foreign ministry spokesman, Ramin Mehmanparast, said Iran has always disallowed Al Qaeda from operating on the Iranian soil, and the country did not have any involvement in the 2001 attacks.

“The American government's recent unwise scenario regarding Iran's involvement in the September 11, 2001 attacks and the presence of an al Qaeda member in Iran is completely baseless,” Mehmanparast said on Sunday [Fars News Agency, 25 December].

Iran Parliamentary Elections Process Begins

Iran on Saturday started registering candidates for the country's March parliamentary elections. The reformist groups, including the pro-Green opposition movement, are staying out of the race, saying the elections will not be fair and free.

The government’s Guardian Council needs to allow the candidacy of anyone wishing to run for a Majlis seat. The Council can and is expected to disallow candidates whose political views contrast with the ruling orthodoxy. Last week, the Guardian Council Chairman Ayatollah Ahmad Jannati publicly proclaimed that the reformists need not participate in the upcoming parliamentary elections, calling them ‘traitors.’

In their absence, the main competition for the entire 290 seats in Majlis in the 2 March elections will be between the traditional hardliners staunchly royal to the country’s supreme leader Ayatollah Khamenei and the conservative supporters of President Ahmadinejad and his chief of staff Esfandiar Rahim Mashaie, dubbed as ‘deviationists’ by the hardliners. Hardliners, having pushed the reformists to the sidelines, now consider the ‘deviationists’ as the major threat to the ruling system.

The outcome is not expected to bring any major change in the current system of governance, led by the supreme leader expected to govern the country for life.

Velayat-90 Military Maneuvers (1)

According to Fars News Agency:

Iran's naval forces started massive wargames in international waters in the Sea of Oman and the Indian Ocean on Saturday.

The naval maneuvers dubbed Velayat 90 are due to cover an area stretching from the East of the Strait of Hormuz in the Persian Gulf to the Gulf of Aden for 10 days.

During the wargames, the Iranian naval forces will display their latest equipment, achievement and tactics.

Earlier, Navy Commander Rear Admiral Habibollah Sayyari had said that the exercises will manifest Iran's military prowess and defense capabilities in the international waters, convey a message of peace and friendship to the regional countries, and test the newest military equipment among other objectives.

He said that the newest missile systems and torpedoes will be employed in the maneuvers, adding that the most recent tactics used in subsurface battles will also be demonstrated in the maneuvers.

Sayyari also said that Iranian destroyers, missile-launching vessels, logistic vessels, drones and coastal missiles will also be tested.

Earlier, an ONI special advisory was publicly broadcasted and highlighted at the Information Dissemination blog. It read as follows:

REPORTS FROM MARITIME FORCES AND COMMERCIAL MARITIME INTERESTS INDICATE CONCERN WITH THE POTENTIAL FOR LOCALIZED DISRUPTION TO SHIPPING IN CONJUNCTION WITH FUTURE IRANIAN NAVAL EXERCISES. DURING PREVIOUS EXERCISES IRANIAN MARITIME FORCES CONDUCTED BOARDINGS AND INSPECTIONS OF MERCHANT SHIPS, INCLUDING THOSE FLAGGED TO EUROPEAN NATIONS. THE POSSIBILITY EXISTS THAT IRAN WILL ATTEMPT TO CONDUCT BOARDINGS AND INSPECTIONS DURING EXERCISES BETWEEN DECEMBER 2011 AND MARCH 2012. THE MOST LIKELY LOCATION FOR THIS ACTIVITY WOULD BE IN THE VICINITY OF THE STRAIT OF HORMUZ, PARTICULARLY IN AREAS CLOSER TO IRANIAN TERRITORIAL WATERS.

Iranian TV coverage - Persian:

YouTube video by Agaahi

Ahmadinejad in Armenia

Iran's President Mahmoud Ahmadinejad arrived in Yerevan today on a state visit. He will meet with the Armenian President Serzh Sargsyan and other senior Armenian officials. Ahmadinejad was scheduled to visit Yerevan last June, but that trip was cancelled in the last minute. Shipment of more Iranian crude oil to Armenia is expected to be on top of the agenda.

Photo: President Ahmadinejad (r.) and Sargsyan at the Presidential Palace in Yerevan. 23 December 2011. AP Photo

Declining Rial, Symptom of Bigger Problem

By Nader Uskowi

The rapid decline of Iran’s currency rial continued today when it hit yet another historic low of 15,570 rials per US dollar. Last Thursday, the rial was trading at 13,850 per dollar, a drop of 13% in just one week.

The heightened tensions between Iran and the UAE over the trans-shipment of goods at Dubai ports destined for Iran seem to have caused panic in the country’s foreign currency market this time. But the decline of rial has been steady and without break during the Ahmadinejad’s presidency, and especially this year. In 2011 alone, the value of rial has plummeted by 45% (in December 2010, the rial was trading at 10,850). Since 2006, the rial has lost 71% of its value (from 9,200 at the beginning of Ahmadinad’s presidency).

The reason I look at the relationship between the value of the country’s currency and Ahmadinejad’s presidency should be obvious: the hardline policies of this president on the nuclear issue are increasingly pushing Iran toward isolation. In an age of global economy, the country’s ties to the world, to its financial and banking system, to its transportation system and now to its system of free flow of goods have increasingly weakened. The rapid drop in the value of rial should not have come as a surprise to the government. Even if the Central Bank of Iran intervenes aggressively in the currency market during the coming days, a recovery will be temporary in nature, controlling the current level of panic in the market, but would not resolve the long-term decline due to the underlying causes.

What does the country get as the results of these hardline policies? Tons of enriched uranium. But for the people of the country, whose purchasing power is rapidly declining due to high inflation, partly as a result of the currency’s declining value, more enriched uranium does not prevent increasing economic hardship. Look at Pakistan! Many, many bombs, probably more than some Western powers have in their inventories, and an economy is state of ruins. The rising price of oil gives Iran the luxury of coping with many issues Pakistan is unable to cope, but any serious disruption to the oil export will have adverse effects for the country, and would make its problems pale in comparison to Pakistan’s.

There must be a way out of the current impasse. Cooler heads must prevail. Iran should declare victory over its stated goal of the ability to enrich uranium, that’s done and nothing else could be achieved by enriching more, at least for the foreseeable future when the country does not even have any nuclear reactors that can use a fraction of the fuel already inventoried. A moratorium in enrichment makes perfect sense and can be the basis of a serious negotiation with international organizations to end the impasse and the sanctions. That’s where this government should go.

Unless the government is bent on making as many bombs as Pakistan has. Then they might create a real disaster. And the question is why? Often the answer given by some readers of this blog is that the bomb would prevent the US and Israel from attacking Iran. My argument has always been that having no bomb and no program to make the bomb is the most efficient way of preventing an attack on Iran.

Unless the worries are not the attack on the country, but having the bomb to prevent a type of attack that would result in a regime change, as in Libya. Bombs for preserving the regime! But the price would be so high, most probably in the form of a total oil embargo, that the regime might fall on its own weight faster than anyone could pronounce the word attack. This would be having the bomb for the wrong reason.

Cooler heads must prevail. There is still time for diplomacy. The government should, and has declared victory over its enrichment program. Nothing more could be achieved by following the policy of the past six years. And as a result, a disaster could be prevented. And the regime would continue on as long as the people accept it.

Cost of Oil Extraction in Iran: $3 per Barrel

The Chairman of National Iranian Drilling Company Haydar Bahmani said on Wednesday that the operating cost of extracting a barrel of oil in Iran is $3. Mr. Bahmani made his comments during a ceremony commemorating the thirty-second anniversary of NIDC, the company in charge of drilling and extraction of oil in Iran [Mehr News Agency, 22 December].

The $3 extraction cost is the second lowest in the region. Saudi Arabia’s operating cost of oil extraction is the lowest in the region at an estimated $1-$2 per barrel.

Mr. Bahmani did not disclose the capital expenditure costs to extract a barrel of oil, but that cost is estimated at around $4 a barrel. With the Iranian crude selling at more than $100 per barrel, the margin of producing oil in the country is above 93 percent, a rate rarely achieved in any industry in today’s world.

HispanTV

The Islamic Republic of Iran Broadcasting (IRIB) on Thursday launched the HispanTV, the country’s first Spanish-language channel that will broadcast news, entertainment, and educational programs mainly intended for the viewers in Latin America.

HispanTV programs are available for 16 hours a day which are expected to be increased to 24 hours in the near future.

The channel broadcasts on Hispasat 1C, frequency: 12092 MHz, vertical polarization, symbol rate: 27500, FEC ¾; and Hispasat 1C, frequency: 12172 MHz, horizontal position, symbol rate: 27500, FEC ¾.

It can also be received on NSS 806, frequency: 3803 MHz, horizontal position, symbol rate: 27500, FEC 3/4; Intelsat 9, frequency: 3840 MHz, vertical position, symbol rate: 27690, FEC 7/8 and HotBird, Frequency: 12380 MHz, vertical position, Symbol rate: 27500, FEC ¾.

Uskowi on Iran congratulates our colleagues at HispanTV for the launch of the channel.

In a League with North Korea?

One finds the ruling regimes in Iran and North Korea have a lot more in common than being in former President George Bush's “Axis of Evil” together.



'Supreme Leader' Khameini and 'Dear Leader' Kim Jong il'

With the passing of the DPRK's 'Dear Leader' Kim Jong il one aptly is reminded of the cult of personality surrounding Ayatollah Khomeini and the outburst of emotion and despair following his death in 1989. Furthermore one finds upon closer examination and overall evaluation and comparison that the totalitarian systems imposed upon the North Koreans and the Iranians are strikingly similar in their totalitarian nature and respective propagation of propaganda.

In 2002 when President Bush declared an Axis of Evil and from his pulpit proclaimed it to consist of Iran, North Korea and Saddam Hussein's Iraq one thing was clear to the keen observer from the get go – that being the fact that the Iranian people hadn't been reduced to the state of the literal serfs that had been made out of the Iraqi and North Korean people.

While the UN mandated international sanctions imposed on Iraq following the 1991 Persian Gulf War starved the feeble Iraqi people in their thousands Saddam Hussein was still able to build a lavish palace for himself in every one of Iraq's provinces. In North Korea little over three years before Bush's speech a famine had killed upwards to 3 million as the nations crops once again failed to feed the majority of the people who struggled to stay alive by eating grass and muck in order to have something in their stomachs, both people lived in a constant state of abject fear.

Iran at this time on the other hand was undergoing a hopeful time of liberal reforms under President Khatami which saw the countries youth having a vested interest in the countries political system and hopes for a brighter and more prosperous future.

So while the Iranian people are much more well off than the North Koreans (not a substantial amount more democracy wise in the last year or so – but I digress) their leadership shares a unique commonality with the North Korean one that I will strive to illustrate:
North Koreans are treated as if they are vulnerable, weak and innocent children protected by a figurative paternal father against a harsh and cruel world. This figurative father was Kim il Sung who when he passed away in 1994 left behind over 20 million Koreans sobbing uncontrollably, their tears for the most part seemed genuine, because since at least 1953 Kim il Sung had started one of the most elaborate personality cults centred around himself and gradually isolated the northern part of the Korean peninsula to the status of a hermit kingdom with his Juche (self-sufficiency) ideology. For the most part North Koreans don't know the reality of the outside world as the country has virtually no access to any information that doesn't follow the party line. The people there have been made into malnourished minions, the crops are continually failing and the country is becoming even more reliant on foreign aid from the powers it brainwashes its people to detest – whilst at the same time building ballistic missiles to neither export to countries like Iran or Pakistan or for its own use to threaten South Korea and Japan.

The clerical regime in Iran treats its people in a similarly condescending way, however there is an actual religious name for their supposed paternal authority over them, the Vilayat-e Faqih. Previously a religious decree it states amongst other things that the insane, absentees and the poor must be given guardianship by the Guardian Jurist. Following the overthrow of the last Shah in 1979 Ayatollah Khomeini formed the basis of the constitution of the then newly formed 'Islamic Republic' of Iran giving the Guardian Jurist the role of Supreme Leader over the government and in effect the Iranian people, who as a collective would be subjects of that rule.

Going back to other thing the Dear Leader and the Supreme Leader have in common. Apart from the solipsistic attitude they take with regards to their own people they also share another commonality with regards to their propagation of anti-western propaganda.

The North Korean propaganda system and party line often referred to their brethren in the south simply as the “Yankee colony” and preaches a very xenophobic view towards foreigners (the Cuban ambassador to North Korea was attacked by an angry mob of Koreans upon his visit to Pyongyang in 1965 simply because he was black) as a means of stirring up fear and animosity towards the outside world, all the while – as I've already stated – furthering their nuclear ambitions and capabilities in which to threaten their neighbours and solidify the leaderships firm positions of power and secure its hold over the publics imagination.

The present Iranian leadership since its foundation in 1979 has similarly made the country and its inhabitants social pariahs, as it continues to cynically blame all domestic and development woes on Zionists, western imperialism and the age old wretched Anglo-Saxon's. Unlike in North Korea however this ostentatiousness is as clear as day to most Iranians, and they for the most part have outgrown and seen through the shallow idea that – like their North Korean counterparts are raised to believe – they are vulnerable and feeble children whom require the tutelage of a regime made up of aged clerics. This regime has in the name of God imposed a theocratical totalitarian entity upon Persia and her inhabitants, subjugating them to an infantile level of intellect and accordingly treating them with despicably high levels of condescension and contempt.

As the Professor of Iranian History from the University of St. Andrews Ali Ansari stated, Iran is an educated society that has a God King, as he mildly but firmly put it, we live in a world where there is no longer any room for the God King.

Editor’s Note: Paul Iddon is one of the authors of Uskowi on Iran. His weekly column 'Broadened Vistas' appears here on Wednesdays.