Iran Update, August 10, 2023

Iran Update, August 10, 2023

Annika Ganzeveld and Andie Parry 

The Iran Update aims to inform national security policy by providing timely, relevant, and independent open-source analysis of developments pertaining to Iran and its Axis of Resistance. This update covers political, military, and economic events and trends that affect the stability and decision-making of the Iranian regime. It also provides insights into Iranian and Iranian-sponsored activities abroad that undermine regional stability and threaten US forces and interests. The Critical Threats Project (CTP) at the American Enterprise Institute with support from the Institute for the Study of War (ISW) provides these updates Monday through Friday. To receive Iran Updates via email, please subscribe here.

The Institute for the Study of War (ISW) with support from the Critical Threats Project (CTP) at the American Enterprise Institute launched an interactive map of Iran and the Middle East. The map depicts events in Iran that affect the stability of the Iranian regime, namely anti-regime protests and reported poisoning incidents. It also shows developments in Syria that jeopardize regional stability and pose threats to US forces and interests, including Iranian and Iranian-backed militia positions.

Key Takeaways

1. Syrian President Bashar al Assad downplayed the importance of relations with the Arab states while stressing relations with Iran and Russia during an interview with the UAE-based Sky News Arabic on August 9.
2. Iran’s Foreign Affairs Ministry is continuing its diplomatic campaign to convince BRICS countries to admit Iran as a BRICS member ahead of the organization’s 15th annual summit in Johannesburg, South Africa on August 22-24.
3. Iran and the United States reached an agreement on August 10 for the release of five US nationals detained in Iran. The United States will release six billion dollars of frozen Iranian assets and release several Iranian prisoners as part of the agreement. The release of six billion dollars would be a significant boost for Iran’s struggling economy.

Iranian Activities in the Levant

This section covers Iranian efforts to consolidate and expand Tehran’s economic, military, and political influence throughout the Levant especially in Syria. This section examines some of the many campaigns that Iran is pursuing to achieve this strategic objective. CTP will update and refine our assessments of these campaigns over time and in future updates.

Syrian President Bashar al Assad downplayed the importance of relations with the Arab states while stressing relations with Iran and Russia during an interview with the UAE-based Sky News Arabic on August 9.[1] Assad discussed Syria’s readmission to the Arab League in May 2023 but downplayed the significance of the event. He stated that these ties are only formal relations, indicated the Arab states lack real problem-solving capacity, and downplayed the benefits that normalizing relations with the Arab League could have for Syria’s economy. Assad also dismissed concerns that the Arab League has raised and seeks for the Syrian regime to address. These concerns include the return of refugees to Syria, the Captagon trade, and the presence of foreign militias in Syria. This contrasts with the emphasis Assad gave to the importance of the Syrian regime’s ties to Iran and Russia. He reaffirmed his strong relationship with Iran and Russia, stating “the relationship with Russia and Iran proved Syria knows how to choose its friends correctly.”

Assad gave similar interviews to Russian news outlets in 2020 and 2022.[2] Assad’s comments about the Syrian regime’s close ties to Iran and Russia on August 9 are consistent across the previous interviews. Assad‘s demands that Turkey fully withdraw from Syrian territory and stop supporting terrorist groups are consistent with the previous interview as well.

Assad stressing relations between the Syrian regime, Iran, and Russia are consistent with reports that Iran and Russia have been strengthening the capacity of the Syrian regime this year. Both have expanded institutional, political, military, and economic ties with the Assad regime while facilitating Syrian reconstruction projects.[3] Iran announced in February 2023 its intent to provide air defense systems to Syria to rebuild the Assad regime’s defensive capabilities, for instance.[4]

Iranian Domestic and Political Affairs

This section covers factors and trends affecting regime decision-making and stability. CTP will cover domestic politics, significant protest activity, and related issues here.

Iran’s Foreign Affairs Ministry is continuing its diplomatic campaign to convince BRICS countries to admit Iran as a BRICS member ahead of the organization’s 15^th annual summit in Johannesburg, South Africa on August 22-24. Raisi administration officials have frequently expressed Iran’s interest in joining BRICS and organized a conference on August 8 to promote the benefits that Iran’s membership would bring other BRICS members.[5] Foreign Affairs Minister Hossein Amir Abdollahian traveled to Pretoria, South Africa on August 9 to attend an Iran-South Africa Joint Economic Cooperation Commission meeting.[6] He also attempted to assuage concerns about Iran’s admission to BRICS by misrepresenting Iranian policies during a press conference on August 10.[7]Abdollahian falsely claimed that Iran has not supported Russia's invasion of Ukraine.[8] Iran has supplied Russia with more than 400 drones since August 2022 and is helping Russia construct a drone factory that will significantly increase Russia’s drone stockpile.[9] Abdollahian likely made this statement to assuage the South African government’s concern that Iran seeks to make BRICS an “anti-Western bloc.”[10] South African International Relations and Cooperation Minister Naledi Pandor emphasized on August 10 that it is “very wrong” to assume that South Africa is “pro-Russian” or “anti-Western.” CTP previously reported that Iran seeks to join BRICS as part of its efforts to create a parallel world order with other revisionist states to confront Western “dominance.”[11]

Deputy Foreign Affairs Minister Ali Bagheri Kani separately pursued Iran’s BRICS ambitions in Brazil on August 10.[12] Kani emphasized that BRICS contributes to a “stable and development-oriented" order during a meeting with Brazilian Foreign Affairs Ministry Africa and Middle East Secretary Carlos Sergio Sobral Duarte in Brasilia, Brazil.[13] Kani added that cooperation between Brazil and Iran “strengthens multilateralism.” Reuters reported on August 2 that Brazil currently opposes adding more member states to BRICS.[14]

Iranian officials will advance the diplomatic campaign further in the days ahead. Abdollahian stated that Raisi will travel to South Africa “in the coming days” and that Raisi will clearly explain Iran’s positions “regarding BRICS.”[15] Raisi last traveled to Africa in July 2023 as part of his administration's economic diplomacy efforts and “good neighborhood policy,” which is an economic policy centered on building relations with regional and extra-regional states to undermine Western sanctions.[16] Joining BRICS would be consistent with this policy and could help Iran mitigate the impact of Western sanctions, as CTP previously assessed.[17]

Iran and the United States reached an agreement on August 10 for the release of five US nationals detained in Iran.[18] The United States will release $6 billion worth of frozen Iranian assets and release several Iranian prisoners as part of the agreement. Iran has transferred five US nationals--including Siamak Namazi, Emad Shargi, and Morad Tahbaz—from Evin Prison to ahotel in Tehran.[19] Western media reported on August 10 that the detainees will likely be transported to Qatar, which, along with Oman and Switzerland, mediated the agreement between Iran and the United States.[20] Washington will transfer $6 billion worth of Iran’s frozen assets in South Korea to an account in Qatar’s central bank. Iran will only be able to use this money for “humanitarian purposes.” It is unclear how the US will regulate the Iranian regime’s use of this money, however.[21]

The release of $6 billion would be a significant boost for Iran’s struggling economy. Iran is currently facing critical economic conditions, with the value of the Iranian rial hovering just below 500,000 to the US dollar on August 10.[22] The rial was comparatively valued at around 298,200 rials to the dollar before the eruption of the anti-regime Mahsa Amini protest movement in September 2022.[23] The Iran Statistical Center reported in July 2023 that Iran’s inflation rate is approximately 47.5 percent.[24]

The release of $6 billion would also help Iran implement its 2023 budget. Iran’s 2023 budget counted on selling 1.3 million barrels per day at $85 per barrel.[25] The Wall Street Journal reported on July 6 that Iran exported approximately 1.6 million barrels a day in May and June 2023 albeit at a significant discount.[26] Iran has been offering importers of its oil at a $30 per barrel discount to compete with Gulf Arab states. This amounts to sales roughly 35 percent below market price. An unspecified Western official recently told CBS News that China has been purchasing Iranian oil with a $20 per barrel discount.[27] This is approximately 23 percent below market price. CTP assessed on August 8 that the Iranian regime detained a fifth US national possibly to gain leverage against the United States in its efforts to release frozen Iranian assets in Iraq and South Korea.[28]