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EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran. A security personnel looks on at oil docks at the port of Kalantari in the city of Chabahar, 300km (186 miles) east of the Strait of Hormuz January 17, 2012.
India risks US sanctions over a new Iran port
On Monday, India signed a10-year-long agreement to operate and develop Iran’s Chabahar port. The move is meant to expand India’s agriculture exports to Afghanistan and Central Asia while bypassing existing routes through neighboring Pakistan, New Delhi’s main rival.
Flexing muscles. New Delhi, on track toovertake Japan as the world’s fourth-largest economy by 2025, has only managed the port under short-term contracts since 2018 and has already transported 2.5 million tonnes of wheat and 2,000 tonnes of pulses to Afghanistan. This new longer-term deal with a contractual value of roughly $370 million will reduce transit times between India, Iran, and Afghanistan.
But India is sailing at a risk. Just hours after the contract was signed, the US warned ofpotential sanctions on any country doing business deals with Tehran. Over the last three years, Washington has imposed over 600 sanctions on Iran-related entities.
India has not formally responded to Washington's warning yet, setting up a potential diplomatic clash that may test the limits of India’s willingness to defy its Western allies in order to pursue its own strategic interests in the region.
Israel attacks Iran
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here and a Quick Take on the latest in the Middle East crisis. And things actually looking a little bit more stable today than they have over the past couple of weeks. And that is some very welcome news.
The headlines, of course, that the Iranians have been hit by Israel, though no one is saying that Israel has admitted to doing it, in the town of Isfahan. Clearly, military targets and the Iranians trying to knock down those missiles coming over. But this was a significantly more restrained attack than what the Israelis did to kick off this crisis, which was attack an Iranian government building in Damascus and target and assassinate a senior Iranian leader. That led to the Iranian response that we saw over the weekend, which was a significant and serious one, with a few hundred missiles and drones. And now we are in the escalatory portion of the cycle.
The United States said very clearly to Israel, “We're going to help defend you no matter what. We don't want any offensive strikes against Iran. Take the win.” The fact that they said that meant that it was very, very likely that they were going to do something, but that something was going to be restrained, where if the Americans said, “Hey, just take it easy, don't do anything big,” then they’d end up doing something bigger, right? And you give them an inch, they take two inches. This is the way these things work. And it was coordinated with the United States. The US was not involved directly in the military strikes, but they knew it was coming. They had that cooperation, communication from Israel, which was important because the US had to be in position in case the Iranians decided that they were going to strike real time in response to Israel. The Americans were going to help the Israelis defend themselves yet again.
Now, the big question here is not, “Do the Iranians respond in a big way?” They don't. They've already signaled that that's not the intention. You've seen them downplaying the nature of these strikes on Iranian state media. So, this crisis, this proximate crisis between Israel and Iran is now in the rearview mirror. But going forward, what's the likelihood that we can stabilize this war, which is now well beyond just a matter of Israel versus Hamas?
One thing that makes me a little bit more positive is the fact that Bibi Netanyahu is himself in a little more secure position domestically. What do you mean, makes you more positive? Does that mean he's going to last longer? Yes. But it also means he doesn't necessarily have to go ahead with massive strikes against Hamas in Rafah, killing lots of civilians. Or eventually against Hezbollah, pushing them back so that almost 100,000 Israeli citizens can get back to the north. If he wanted to take a win and show that he now has, you know, a historical legacy of leading Israel in defending against an unprecedented strike from Iran, with strong support from the Americans, from the Brits, from the Jordanians, from the Saudis, this is the opportunity that could create Saudi normalization with Israel. This is the opportunity that could create a peace deal that the Palestinians would have some form of governance over the West Bank and Gaza together.
That's the opportunity that comes from this, precisely because Israel domestically now has a leader that doesn't have to look over his shoulder every moment. But the strong effort by Netanyahu, at least as of today, is to still go ahead with these Rafah strikes. You've got the battalions on the ground. You want to use them, you want to take out, these Hamas leaders, irrespective of the civilian cost. And that continues to be very popular among the entire population of Israel as well.
So, when I think about the next couple of weeks, I think that you're not going to get a breakthrough deal on hostages with Hamas, and that means that the fighting only stops if there's a broader agreement. And that broader agreement requires that the Israeli war cabinet is willing to stand down and not continue their war on the ground in Gaza. And in return, has a broader agreement with the Americans, with the Gulf states, and ultimately with a path forward for the Palestinians. Most people around the world would welcome, would love to see that. Getting the Israelis from here to there, especially when you are surrounded by enemies that consider you, to be, illegitimate as a country and refuse to recognize your right to exist, that makes it a lot harder. So that's where we are. But some breathing space for now. The mood in the United States, certainly better than it was at any point over the last week and a half, and that's a good thing.
That's it for me. I'll talk to you all real soon.
Iran attacks Israel
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here, and a Quick Take on a Sunday, which usually means something is not going well, and that is certainly the case in the Middle East, where you had unprecedented strikes by Iran and its proxies against Israel.
Now, on the one hand, clearly a very dangerous thing to do, on the other hand, could have been a hell of a lot worse. What do I mean by that? Well, it is not World War III. Americans warned Iran not to hit the United States, and the Iranians gave a heads-up, days in advance, through a number of actors, most importantly through Iraq. This reminds me very much of after the American servicemen and women, three were killed in Jordan, by an Iranian proxy. The Americans did not want a war to break out with the Iranians directly, waited about a week, gave a heads up through Iraq, of the kind of attack that the Americans were planning, waited four days, gave the Iranians a chance to basically prepare and get their own forces out, and warned them that if this were to happen again, there would be direct consequences, a direct strike on Iran itself.
In this case, you had the Iranian heads-up that gave the Americans and allies time to pre-position, to provide diplomatic support, both publicly and privately, to the Israelis. Send the head of CENTCOM to Israel, say that American support for Israel was ironclad, help ensure that the Israelis would be able to most effectively defend itself against the coming Iranian attack. That was, on the one hand, a really big deal by the Iranians that was meant to be a maximal display of force and a minimum likelihood of casualties. But still, there was a significant possibility of accident, that you could have a risk that would lead to a war directly between Iran and Israel. Something that the Americans desperately wanted to avoid because it would bring the US in. It would spike oil prices. It would probably mean the end of Biden's, potential of a second presidency. And it, of course, would also mean that Iran was going to get hit massively by the United States and Israel, something they wanted to avoid.
We saw hundreds of drones and ballistic missiles, many from proxies, but many from Iran itself, over 99% of which were taken down. And they were aimed solely at military targets in Israel. So again, lots of effort to try to reduce the risk but the potential that you would have had a number get through, accidentally hitting civilians or having significant military hit, that was a risk that the Iranians were prepared to take. So, it's a big deal, it’s a clear escalation, and it is certainly an effort by the Iranians to say, that if this is to happen again, that the likelihood that there will be a major war between Iran and Israel come what may, is very real. And the Iranians also said, and they said this before the missiles even hit their targets, or in the case of the vast majority of them were intercepted, said through the United Nations mission that this was directly in retaliation for the Israeli strike against an Iranian leader in Damascus, and that the matter, from Iran's perspective, should be considered closed.
In other words, no further attacks were coming. So, trying to in a sense, you know, reduce the likelihood of further escalation, in advance. And clearly, all of that kept the United States from responding directly. So, the US strategy here is do everything possible to show that you will get massive support for Israeli defense and national security in the event of an attack, any attack, but also to try to put maximum constraint on the Israeli government against a response directly against Iran, and that the Americans don't want to support Israel if they were to engage in offensive attacks against Iran at this point.
What are the Israelis going to do? I mean, the hope for the United States is that while Prime Minister Netanyahu wants to do more and suck the United States into a broader war against Iran, that he is going to be constrained from doing so. In part because he was so successful, they now have a major victory on their belt under his watch, being able to defend the Israeli people completely in response to an unprecedented Iranian attack. And there's also going to be a big distraction away from the war in Gaza. Doesn't mean that Israel suddenly loses its isolation or wins the PR war globally, I think that's certainly not going to happen, but, there's less pressure on the Israelis, on the prime minister, in terms of Gaza right now as a consequence of what Iran has done. And there's also less pressure for Netanyahu to be forced out domestically in the near, in the immediate future.
Further, if he were to try to go considerably farther than Benny Gantz wants to, and the war cabinet wants to, in a response against Iran, then Netanyahu risks that they would bolt from the war cabinet and that his government would then fall apart. That's certainly a proximate risk that contains what the Israelis are likely to do. I don't think they'll sit on their hands and do nothing. At the very least, I think there'll be more significant strikes against Iranian proxies in the coming days. And the Israelis will also continue to engage in strikes against Iranian targets as they see them, as is opportune, in proxy states going forward. This is the problem, of course, is that, even though you have averted major escalation in a very dangerous period over the weekend, the Israelis and the Iranians haven't accomplished anything to stabilize their relationship longer-term.
Israel has shown that they are capable of taking out Iranian leaders in Syria, and Iran can't defend them. Iran has no intention of suddenly leaving those proxies to fend for themselves. And further, the likelihood that Israel now gets a breakthrough agreement on hostage release by Hamas, and that leads to a ceasefire, has gone down, at least in the near-term. The other side of that is the likelihood that the Israelis proceed with at least some form of ground attack into Rafah, which the Americans have warned them not to, also has gone up.
So the Hamas war with Israel is nowhere close to ending, the likelihood of continued Palestinian civilian casualties continues to grow, and the potential for further military engagement, both vis-a-vis proxies, including the Houthis in the Red Sea, the fact that the Iranians have also boarded an Israeli linked vessel in the Red Sea and that there is no effective deterrent in place right now between Israel and Iran, despite all sorts of other actors not wanting this to expand into a broader war, that all makes the Middle East right now, more dangerous.
So, I mean, none of us know, what the next shoe is going to be to drop. But if you are looking ahead over the next, let's say, six months, a couple things I think you can say. First, it is more likely that the present Israeli government is going to be in place for longer, and that the war in Gaza is going to continue without a serious effort at stabilization, or at least not one that's consequential.
That's problematic for Biden as you look ahead to the election in November. The potential that this war expands and eventually does drag in the United States and Iran more directly, is also going up. It's not imminent but it is certainly reasonably plausible, and the guardrails on that war are becoming, they are eroding as both sides are taking shots against each other.
So, a dangerous environment. A second war that is not going the way the Americans or anyone else in the world would like it to. And that's how we're kicking off our week.
That's it for me and I'll talk to you all real soon.
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US-Iran tensions complicate Biden's Middle East strategy
Ian Bremmer's Quick Take: Hi, everybody. Ian Bremmer here and a Quick Take to kick off your week. We are still very much focused on the Middle East. That is the top priority. Tony Blinken, Secretary of State, for his fifth trip to the Gulf since October 7th, those horrible terrorist attacks, Ukraine very far down the priority list compared to the engagement the Middle East is presently getting. It certainly feels that way. But that's what we're focusing on.
And the big issue is the American military response to that nightmare scenario that came to pass when US servicemen and women, dozens injured, three killed in Iranian proxy attacks on the Jordan-Syria border. The United States had to respond militarily, did respond militarily, but they also did not want to precipitate an Iranian war with the United States. So they tried to have their way on both sides of the equation and probably end up getting nothing that they want. What do I mean by that? Well, the United States did attack direct Iranian military assets, Islamic Revolutionary Guard Corps military capabilities on the ground in Syria and Iraq, but also telegraphed that very clearly, very publicly, for about five days before they started the attacks, which meant that proxy leaders and most importantly, Iranian leaders were able to get out of Dodge and potentially protect the most sensitive equipment information from those US strikes.
That meant that the Americans got to show that they would take significant military action, but also did not precipitate an Iranian military response. We aren't going to see war right now between the US and Iran, but we also aren't going to see deterrence by the Iranian proxies or by the Iranians in continuing to engage in strikes in civilian tanker traffic through the Red Sea or against Americans on the ground in the region.
Now, if it doesn't resolve any of that conflict that continues to get worse, what does it resolve? Well, it continues to give the Americans a little bit of time, maybe to get a temporary cease-fire in Gaza. That's really where the effort is right now, particularly being engaged with Qatar in coordinating with the Israelis and with Hamas. The hope is that in the next week or two, you get a month of committed cease-fire from the Israelis and you get large numbers of remaining hostages being held by Hamas released to Israel.
Now, Prime Minister Netanyahu and the war cabinet are nowhere close to succeeding in their war on the ground against Hamas. And that means they have months minimum before they're willing to think about wrapping up that conflict, irrespective of all the international pressure. So what does a month accomplish? While the hope is that a month accomplishes movement towards a Saudi-Israel peace deal where the Americans would proactively recognize a Palestinian state together with the UK and others. The Israeli war cabinet would outline the potential for such a political recognition while security would be provided by somebody else. Don't have to have your own security forces to have your own state, and nobody says that's a requirement. Would it be provided by the Israelis? Well, that wouldn't be acceptable, though. They could have a buffer zone perhaps, would need to be worked out with the Gulf allies, with Egypt, with Jordan. Can that be done in a month? In terms of sticking the landing, that's about the highest degree of difficulty you'd see in gymnastics. And certainly I would take the under in terms of expectations of a peace deal here.
But does Biden feel like he has any better alternatives at this point? And the answer to that is no. Meanwhile, he's being squeezed by the Republicans at home who are pushing for more aid for Israel, not linked to anything. And he's getting squeezed by the progressives that are his own Democratic supporters that are more aligned towards the Palestinians than they are Israel. This is feeling like a no win situation for Biden. And so if he can get a cease-fire and get a few weeks, engage diplomatically, see what shakes loose. Still at the end of the day, there are far more actors around this war, both in Gaza and also more broadly in the Middle East, that are interested in finding ways not to have a lasting cease fire than to see a peace agreement work out. That's true certainly for Hamas. It's true certainly for Netanyahu. It's also true for the Iranian government and the so-called axis of resistance.
And for all of those reasons, I fear that we are still heading for further escalation as opposed to a window that would end this war. Really tough for Biden in an election year, really tough for those in the Middle East living with this at any time.
That's it for me. I'll talk to you all real soon.
US-Iran tensions escalate after deadly drone attack
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here and a Quick Take to kick off your week right in midtown Manhattan, New York City. And the Middle East war continuing to expand as we have been convinced it would. This was this weekend, really the nightmare scenario for the Americans that given all of the Iranian proxy attacks against shipping and against US troops in the region, but eventually they would get through and kill some.
And that is exactly what happened. Three American servicemen killed, dozens injured, and now the Americans have to respond. That response will almost certainly be against Iranian forces to some degree directly. Whether or not that means hitting Iranian territory, that's an open question. But even though the Iranian government denied it, the United States has been very clear, “these are Iran supported attacks.”And while I'm fairly comfortable saying that the Iranians didn't likely order these attacks directly, they're certainly comfortable with the fact that they're going on. They're providing real time intelligence to the groups. They're providing real time weapons to the groups. So it's not like they had nothing to do with it.
Now, the United States doesn't want war with Iran, you know, no holds barred across the region. The Iranians don't want war with the US. But that doesn't mean war is not going to happen. And we're certainly taking a step closer to that right now. Will American strikes be sufficient to stop Iranian proxies from hitting the United States? That's very hard to imagine. It might be uncomfortable with it, but I can't see the Iranians cutting off all of these groups just on the basis of the likely American strikes that are coming next, which means even though we're escalating, we're still not yet at sort of a place where anyone is panicking enough to start restraining and reining in the continued escalation that we're seeing.
The other side of this is we do see the United States working very hard with Qatar and the Israelis to try to facilitate a breakthrough on the hostages. And the Israelis are willing to engage in ways that they were not, even a couple of weeks ago, willing to take a deal that would not be as attractive for them. For example, a longer ceasefire in the strikes in Gaza in return for the hostages being released. In part, the Hamas has been unwilling to engage and has been unwilling to give very much. But that could change if the Iranian government now starts pressing them hard. And that is where we could see a bit of a breakthrough, especially if the United States response is serious to what we've just seen over the weekend.
So are we going to see the Iranians stopping support of the proxies in the region, stopping the attacks? No. But might we see a temporary ceasefire and a breakthrough on the hostage side? That looks more likely to me in the coming days and weeks than it was last week. So, you know, it's dangerous environment. We're continuing to see escalation, but there's certainly lots of moving pieces and not everybody wants to see war.
That's it for me. I'll talk to you all real soon.
Americans released in a swap deal between the U.S. and Iran arrive in Doha.
US-Iran prisoner swap comes through
The US and Iran on Monday traded prisoners in a high stakes swap that’s causing problems for President Biden at home.
After months of negotiations, the two foes traded 10 prisoners: five US citizens locked up in Iran, and five Iranians detained in the US, some of whom were charged but hadn’t been convicted.
As part of the deal, the Iranians also reaped almost $6 billion in frozen oil revenue held in South Korea. The US also placed fresh sanctions on former President Mahmoud Ahmadinejad, but some critics say it’s a distraction as he has no power over Iranian politics.
While some claim this deal suggests a thaw in US-Iran relations, it comes just days after the EU and UK announced the extension of UN sanctions that were slated to be eased under a previous agreement, citing Iran’s efforts to continue to enhance its nuclear program “beyond all credible civilian justification.”
Indeed, for Biden, it’s proving to be a very hard sell at home, with Republicans – and some Democrats – saying that he gave the Islamic Republic too much for too little. Both Biden and Iran's President Ebrahim Raisi will speak at the UN General Assembly on Tuesday, which will reveal more about where things stand.
Iran's Supreme Leader Ali Khamenei and US President Joe Biden.
A US-Iran (prisoner) deal moves forward
On Monday, the Biden administration informed Congress that it had issued a waiver that will allow South Korean banks to transfer $6 billion in Iranian funds frozen by sanctions to Qatar’s Central Bank. (South Korea is one of the biggest purchasers of Iranian oil.) Qatar will then make the funds available to Iran for what the White House insists are humanitarian purposes like the purchase of food and medicine. Iran will free five detained US citizens, and Washington will release five Iranians detained in the US.
The deal is predictably controversial. The Biden team says it marks a breakthrough in US-Iran relations that could lead to important progress in other areas, including Iran’s nuclear program, and that the $6 billion comes not from US taxpayers but from Iran’s own frozen financial reserves. Republicans say President Biden is buying hostages, which rewards criminal behavior and encourages more hostage-taking.
The White House says Qatar will control and disburse the funds to ensure they are used only for the benefit of Iran’s people in accordance with US sanctions. But Iran’s President Raisi said Monday that only the Iranian government can determine what the Iranian people need, and that Iran will spend the $6 billion “wherever we need it.”
It remains unclear when the deal will be executed and the prisoners allowed to leave, but some speculate that it could be next week when both US President Joe Biden and Iran’s President Ebrahim Raisi attend the UN General Assembly in New York.
A new hypersonic ballistic missile called "Fattah" with a range of 1400 km, unveiled by Iran, is seen in Tehran.
Iran unveils hypersonic missile
The Islamic Republic of Iran claims to have developed its first hypersonic missile. At a showy military ceremony usually reserved for North Korean and Russian despots, President Ebrahim Raisi said that the new weapon proved that Iran’s “deterrent power has been formed.”
Crucially, the Iranians claim that the mid-range weapon capable of striking Gulf states can fly at 15 times the speed of sound. For context, a weapon is defined as hypersonic if it travels at between 5-25 times the speed of sound.
Tehran claims that no missile defense system can intercept its new weapon – dubbed Fattah, meaning “conqueror” in Farsi – but that depends on a range of factors, including the missile’s maneuverability. Many Gulf states use the Patriot missile defense system that are apt at targeting ballistic missiles on an unmoving trajectory. Israel, for its part, also has its own suite of missile defenses for these types of weapons.
To be sure, Iranian officials showed no proof on Tuesday that Fattah had been successfully fired, and they’ve claimed in the past to have had a similar weapon that hasn’t yet materialized.
The US and China are reportedly working on their own hypersonic arsenals, though Russia appears to already have developed them. (Ukraine, for its part, claimed in May to have shot them down with a Western-delivered Patriot battery.)
The timing of this grand reveal – that will put the US, Israel, and Gulf states on edge – is strange, coinciding with Iran reopening its diplomatic mission in Saudi Arabia after a years-long feud.