The following opinions are the personal views of the author and do not express the views of ICIS
As tensions in the Gulf build between the US and Iran following the latest incident – the shooting down by Iran of a US military drone – today we run a special guest blog post by Chris Parry (CBE). Chris, a former Rear Admiral in the British Royal Navy, is now a strategic forecaster and risk expert. He is the founding chair of the UK’s Marine Management Organisation and is an internationally recognised authority on existing and emerging aspects of the marine and maritime warfare environment. A regular broadcaster and commentator in UK national newspapers and magazines, he is also an active author. His books include the best-selling Down South – A Falklands War Dairy and Sea Power in the 21st Century.
The Iranian government has denied that it was involved in the recent attacks on four ships at anchor near Fujairah in the UAE in May and on two tankers under way in the Straits of Hormuz earlier this past week. It might actually be telling the truth, but, as Lord Armstrong, a former British Cabinet Secretary once said, it is probably being ‘economical with the truth’. The Iranian regime almost certainly did not order the attacks, but it knows who did.
It would have been illogical and unproductive for the Iranian regime to have authorised attacks on shipping in the Gulf at a time when its diplomacy was attempting to have sanctions against the country reduced and when its reduced energy exports are vital in sustaining its flagging economy and currency. There would also have been the possibility that the European Union or some of its members would have taken the opportunity to distance themselves from the Joint Comprehensive Plan of Action (JCPOA), or ‘the nuclear deal’, in response to US calls for solidarity over sanctions.
It also appears even more bizarre to have targeted a Japanese tanker at the same time as Shinzo Abe, the Prime Minister of Japan, was visiting Iran. The subsequent embarrassment no doubt accounts for personnel from an Iranian Revolutionary Guard Corps Navy (IRGC) fast attack craft removing a limpet mine from the Japanese-owned petrochemical tanker Kokuka Courageous’ hull (shown on a US Navy video). What is significant is that the personnel appeared to know what they were doing in removing the mine. There was little preliminary inspection as one would expect in these circumstances and the mine was quickly detached and secured in a patrol craft that had not exactly provided a stable platform during the exercise.
There have been suggestions that the incidents had been staged or provoked by countries, such as the UAE or Saudi Arabia, to provoke military action between Iran and the US. However, in assessing situations like these and in a post-truth era, it is always wise to apply two basic principles: ‘who benefits?’ and ‘follow the money’. Clearly, the Iranian regime is desperate not to attract more sanctions or military action by the US at the present time. Nor would Saudi Arabia and the UAE risk Iranian attacks on their own countries that would inevitably be targeted in the event of sudden conflict between Iran and the US, even though they would probably like to distract the Iranians from their involvement in Syria, Iraq and Yemen.
The scale of the attacks on the ships at and the use of limpet mines indicate that the attacks were conducted by operators who were keen to cover their tracks. Limpet mines are anonymous in their effect and can easily be claimed for accounting purposes as having been used legitimately for training or demolition purposes. Something more sophisticated like a missile or rocket-propelled grenade (RPG) would attract more attention and point to responsibility, especially during an attack, and would be problematic in accounting terms.
The application of our two principles and game theory, along with the type of attack, the timings and the presence of IRGC naval craft points the accusatory finger firmly at the IRGC, or elements of it. The IRGC is a powerful and influential force in the factional politics of Iran. It deploys substantial military (naval, land and air) and para-military personnel (135, 000) that are vital, not only to the defence, but also the internal security and foreign interventions of the Iranian state. It is also a vast commercial, financial and economic enterprise that exerts control over substantial sections of Iranian economy, especially the energy, construction and distribution sectors. More importantly, it has the autonomy to make decisions about investments and disbursements to its members and supporters, as well as providing social support, incomes and pensions to a large number of military and IRGC veterans and civilian personnel. It also has financial and technological control over Iran’s missile development programme and has operated a wide range of front companies and third parties in evading sanctions.
There have been recent indications that the current Iranian regime under President Hassan Rouhani’s administration has been attempting to reduce the influence of the IRGC as a virtual state within a state and regulate its economic activities for the benefit of the country as a whole. In addition, because of sanctions, the IRGC is under considerable pressure to continue to deliver returns from its many enterprises and investments and maintain payments to various groups and dependants.
On 15 April 2019, the US imposed specific sanctions on the IRGC as a ‘foreign terrorist organisation’ (FTO). Even though the IRGC had been targeted as part of the general sanctions applied to Iran, this move would have had the effect of closing many of the loopholes though which IRGC businesses had until then been able to evade sanctions.
The catalyst for the attacks on shipping would almost certainly have been the announcement by the US Treasury Department on 7 June 2019 that it would be targeting the Iranian Persian Gulf Petrochemical Industries Company for its connections to Khatam al-Anbiya, the IRGC’s economic arm. It is notable that the PGPIC group holds 40 per cent of Iran’s total petrochemical production capacity and is responsible for 50 per cent of the country’s petrochemical exports. The US Treasury Secretary Steven Mnuchin was explicit about the target when he said: ‘This action is a warning that we will continue to target holding groups and companies in the petrochemical sector and elsewhere that provide financial lifelines to the IRGC’.
It is quite clear that a combination of government pressure and escalating sanctions action by the US put the IRGC’s commercial enterprise under severe strain, not only in general terms, but at local levels as well. The attacks on shipping in the Gulf are a clear indication that the IRGC is feeling the pinch and that its business interests and income generation are suffering. The IRGC elements did just enough to attract the attention of the Rouhani administration, while inviting the rest of the world to put pressure on the regime too.
The attacks are consistent with a powerful faction that has in the past shown a distinct tendency to go rogue and act in its own interest against the national political leadership when it has been challenged, either by the state or by Iranian popular opinion. The removal of the mine from the Kokuka Courageous would seem to confirm that the Iranian government has reined in those elements that were responsible for the attacks.
Nevertheless, it will now It be keen to reassert control over the rogue elements in the IRGC that authorised the attack and to forestall any further rogue actions. The downplaying of the incidents and the denial of responsibility by the Iranian regime should allow it to de-escalate tensions with the US in the short term. However, it will be necessary for Iran to demonstrate that it has control over the IRGC and give assurances that its intentions in the greater Middle East and in relation to its missile and nuclear programmes are not intended to destabilise the region.
Oil exports (officially) were 2.5 million barrels a day on 1 April 2019 and just over 1 million per day two weeks later and up to the present day.