Iran Project

Iranian-backed Iraqi militias threatened to attack US forces in Iraq, likely elevating the risk of an attack on US or Coalition forces. The militias were responding to a statement from US Ambassador to Iraq Alina Romanowsi about US plans to stay in the Middle East and invest in diplomatic, economic, and security cooperation on May 15. Iraqi proxy façade group Ashab al Kaf and suspected proxy façade group Tuthia al Shiyea posted separate calls for attacks on US forces to expel them from Iraq. Tuthia al Shiyea rejected any negotiation with the United States and threatened armed resistance. Ashab al Kaf warned that it will target US forces in addition to Iraqis working for American intelligence services, but also called on Iraqi Prime Minister Mohammed Shia al Sudani to expel US forces from Iraq. Iranian-backed Iraqi militias gain a significant amount of their legitimacy from opposing the US presence in Iraq and responding to instances of American or Iraqi officials commenting on a continued US presence in Iraq. The militias do not always follow through with their threats to attack US forces, however.

Iran is taking steps to improve operational security for convoys traveling into Syria from Iraq, likely to protect arms transfers from Israeli airstrikes. Iran also is stoking conflict between Israel and Palestinian militias, likely to enable the IRGC to transfer military equipment into Syria with less risk of Israeli interdiction.

Russia is pursuing mutually beneficial economic and military programs with Iran, very likely to ensure Iran continues to provide material support for Russian operations in Ukraine. Iran’s acquisition of Russian Su-35s through those deals may enable Tehran to more readily and independently project power in the coming years.

Iranian leaders are stoking conflict between Israel and Palestinian militias, likely to enable the IRGC to transfer military equipment into Syria with a lower risk of Israeli interdiction. Iranian weapon shipments into Syria could trigger a new escalation cycle with Israel that risks entangling US and Coalition forces.

Ultra-hardline political factions are mounting a political campaign against pragmatic hardline Parliament Speaker Mohammad Bagher Ghalibaf, likely to restrain him from pursuing major political reforms. Ghalibaf has been calling for major political and economic reforms for several months.

The Iranian regime is portraying clerics as allies of the Iranian people likely to prevent further acts of violence against them. Unspecified individuals attacked clerics on five separate occasions in April and May 2023, marking a five-fold increase in attacks against religious figures compared to the first three months of 2023.

Iran is maneuvering to economically benefit from Syria’s reintegration into the region, which may enable Iran to circumvent US and international sanctions, as well as support Iranian-backed militias operating in Syria. Iranian President Ebrahim Raisi signed 15 cooperative agreements with Syria on May 3 in a push to be the primary provider of reconstruction projects in Syria. CTP previously assessed that Iran may use the Iranian para-statal organization Khatam al Anbia or Iranian-backed proxy companies to oversee such reconstruction projects. Iranian Free Trade, Industrial, and Special Economic Zones Supreme Council Secretary Hojatollah Abdol Maleki stated on May 6 that plans to establish a free trade zone between Iran, Iraq, and Syria have entered a “technical and implementation stage.” Maleki suggested the free trade zone may extend to the Latakia port and the Al Qaim Iraq-Syria border crossing. A free trade zone through Syria, Iraq, and Iran would allow Iran to move materiel across borders without oversight that would normally enforce sanctions on trade with Syria and Iran. The Arab League voted on May 7 to readmit Syria, after which an unidentified Jordanian official claimed that the Arab League will lobby to lift Western sanctions on Syria if the Assad regime agrees to a political solution to end the crisis. The end of sanctions on Syria with the establishment of a free trade zone and Iranian reconstruction projects would enable Iran to circumvent Western sanctions on Iran.

Iran Update, May 5, 2023

Annika Ganzeveld, Johanna Moore, Amin Soltani, and Kitaneh Fitzpatrick

May 5, 2023, 4:00 pm ET

The Iranian regime is seeking to take advantage of political and economic developments in Syria and Iraq to improve the Iranian economy and advance its strategic goals in the region. Various Raisi administration ministers met with Syrian officials on May 4. Economic and Financial Affairs Minister Ehsan Khandouzi announced the “removal of obstacles” to Iranian export companies operating in Syria following a meeting with several Syrian economic officials. Information and Communications Technology Minister Issa Zare Pour separately signed a cooperation agreement with his Syrian counterpart, Iyad al Khatib, to facilitate Iranian involvement in modernizing Syria’s telecommunications infrastructure. Zare Pour additionally emphasized Iranian satellites’ ability to produce high-resolution images that Syrian officials can use in agriculture, infrastructure, and construction. Defense and Armed Forces Logistics Minister Mohammad Reza Ashtiani and Roads and Urban Development Minister Mehrdad Bazrpash also accompanied Raisi to Damascus. Ashtiani likely sought to secure weapons sales while Bazrpash likely discussed plans with Syrian officials to establish a rail link between Iran and Syria.

Iranian President Ebrahim Raisi signed 15 cooperation agreements with Syrian President Bashar al Assad in Damascus, Syria on May 3, which could improve the Iranian economy and increase regime stability. Raisi signed these agreements on the first of his two-day trip to Syria, the first trip an Iranian president has made to Syria since the start of the Syrian civil war in 2011 and Arab Spring. Raisi and Assad signed several memorandums of understanding covering oil, energy, transportation, reconstruction, and communications technology. Raisi also asserted that Iranian companies are prepared to be the primary providers of reconstruction projects in Syria during an interview with Lebanese Hezbollah-run Al Mayadeen on May 2. The head of the Iran-Syria Joint Economic Commission and Iran’s Roads and Urban Development Minister Mehrdad Bazrpash separately announced on May 3 that the commission established a joint Iranian-Syrian bank to facilitate business transactions between the two countries. The commissioner’s announcement of the joint bank while Iran and Syria signed economic cooperation agreements suggests the bank will have a role in funding Iranian reconstruction projects in Syria and transferring payments to Iran. These payments would increase capital inflow to Iran, which would help reinvigorate Iran’s deteriorating economy. The role of Iranian para-statal organizations in generating revenue through Syria’s reconstruction would not alleviate Iran’s high inflation and unstable currency, although the regime may attempt to frame it as such to the Iranian people. Such para-statal organizations include the Khatam al Anbia Construction Headquarters, which is the IRGC’s engineering and development firm that oversees large-scale civil-military construction projects and helps the regime circumvent sanctions.

Iranian officials and members of the clerical establishment have expressed increased concern over the safety of religious figures in recent days. Former Intelligence and Security Minister and Shia cleric Hojjat ol Eslam Ali Fallahian called on Friday prayer leaders to learn self-defense during an interview with reformist news outlet Entekhab on May 2. The Islamic Propaganda Coordination Council—a regime body responsible for organizing official ceremonies and public events—separately issued a statement on May 2 urging law enforcement and security services to decisively confront "thugs." The council issued this statement in response to the killing of Assembly of Experts member Ayatollah Abbas Ali Soleimani on April 26. The council chairman—Mohammad Hossein Musa Pour—is a cleric and former governor of Qom City, Qom Province. Law Enforcement Commander Brigadier General Ahmad Reza Radan additionally discussed Soleimani’s murder with Qom Friday Prayer Leader Ayatollah Mohammad Saedi on April 29, possibly to discuss measures to protect clerics.

Iranian leadership dismissed several economic officials and emphasized fighting corruption between April 27 and May 1 to improve Iran’s economy, which is very unlikely to precipitate the meaningful economic change necessary to curb inflation and stabilize the Iranian rial. Supreme Leader Ali Khamenei called on parliament and the Raisi administration to fight economic corruption during a meeting with workers, labor organization members, and Raisi administration officials on April 29. President Ebrahim Raisi has engaged in numerous symbolic economic engagements in recent days. Raisi dismissed 15 unspecified managers in Khuzestan Province to demonstrate his administration’s “intolerance” of corruption during a two-day trip to this province on April 27-28. Raisi additionally ordered the formation of a working group on April 30 to “follow up on the issues” raised by Khamenei in his April 29 meeting with workers without providing further details. Raisi called on his administration to address the needs of contract workers and retirees—who have organized widespread strikes and protests in recent weeks—during a MAPNA Company event for International Workers’ Day on May 1.

President Ebrahim Raisi will visit Damascus on April 3 to initiate several economic projects, possibly to reinvigorate Iran’s economy by securing resources outside of Iran. Reuters reported on April 28 that Raisi will visit Syria on May 3 for a two-day trip, citing an informed source. An Iranian president has not visited Syria since 2011, when the Syrian civil war commenced. The source stated that the recent Iran-Saudi rapprochement and dialogue between Syria and other Arab states prompted the visit. The Lebanese Hezbollah (LH)-affiliated news outlet Al Akhbar reported that Raisi’s two-day visit would result in several economic agreements. An unidentified source cited by Al Akhbar claimed that Raisi’s visit is a part of a larger effort to broaden the Axis of Resistance’s activities beyond its current military activity. Iranian Roads and Urban Development Minister Mehrdad Bazarpash announced on April 25 that Iran intends to connect trade through Iran, Iraq, and Syria via a rail link to reduce tariffs and facilitate banking exchanges during a multi-day visit to Damascus. Bazarpash reported on April 26 that the Iranian-Syrian Joint Economic Forum established eight new committees focused on Iranian investment, energy, and electricity. Iran has cancelled previous economic projects in Syria, including the construction of two power stations on March 13, because the Assad regime sought to pay for the project in raw phosphate.