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Situation Update - Iran

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US-IRAN TENSIONS

  • On 20 June, Iran shot down a US surveillance drone over the Strait of Hormuz, marking the first direct Iranian claimed attack on US assets following the US’s unilateral withdrawal from the 2015 Nuclear Deal last year

  • In retaliation for Iran shooting down the US drone, US President Donald Trump ordered military strikes on three Iranian targets before calling the action off moments prior to it being due to occur

  • The US Federal Aviation Administration (FAA) has banned US airlines from flying over Iran after the drone incident, and other international airlines have rerouted flights as a safety precaution

  • On 1 July, Iran exceeded limits on its enriched uranium stockpile in breach of the nuclear deal after issuing an ultimatum to the remaining parties to the deal in May

  • Iran is expected to increase uranium enrichment purity levels over the 3.67 percent limit after 7 July, which is the date Iran had set for the remaining signatories of the nuclear deal to honour their pledges

Hormuz 2
Situation

Longstanding tensions between the US and Iran, stretching back decades, have led to the current status quo. The US-Iran relationship was affected by several notable incidents in history that has led to a deep, mutual mistrust between the two sides. This includes the CIA-backed overthrow of the country's democratically elected prime minister, Mohammad Mossadegh, in 1953 and the installation of a Western-aligned monarch. Other key events include the 1979 Iranian revolution, which removed the US-backed monarch, and the Iranian hostage crisis the same year when Islamist students stormed and occupied the US Embassy in Tehran for 444 days. In addition, the bombing of a US Marine barracks in Lebanon in 1983 and the 1988 shooting down of an Iranian passenger airline by the US, which although deemed an accident by the Americans, was viewed by many Iranians as evidence of the US’s determination to destroy the Islamic Republic that followed the Iranian Revolution.

While the previous administration of former US President Barack Obama sought to defuse tensions with Iran, current US President Donald Trump has taken a particularly hostile attitude toward Iran, with the Trump administration appearing eager to confront Iran. This has led to steadily increasing tensions between the two countries since Trump came to power in January 2017, particularly after the US unilaterally pulled out of the 2015 Nuclear Deal last year and re-imposed sanctions on Iran.

As part of the Trump administration’s “maximum pressure” campaign, the US has been increasing sanctions against Iran, aimed at forcing Iran to change its ‘destabilising behaviour’ in the region and to return to the negotiating table to agree a new nuclear deal. In April, the US announced that it will not renew sanction waivers on imports of Iranian oil when the waivers expired on 2 May. This was part of the US’s aspiration to deprive Iran of USD50 billion in annual oil revenues by reducing Iranian oil exports to zero.

A series of other actions in recent months have contributed to increasing tensions, including the US designating Iran’s Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organisation and Iran repeating threats to block the Strait of Hormuz, one of seven maritime choke points for the global oil trade. Iran retaliated against the IRGC designation by then labelling all US forces as terrorist, raising concerns of attacks by Iran or Iran-backed groups against US forces or interests in the Middle East and prompting an increased US military presence in the region.

Additionally, recent attacks on tankers in the Gulf of Oman were blamed on Iran, for which Iran denied responsibility. Similarly, Iran-backed Shia militias in Iraq have been blamed for a series of rocket attacks near US assets in Iraq and for a drone attack on the east-west oil pipeline in Saudi Arabia. More recently, on 20 June, Iran shot down a US military surveillance drone over the Strait of Hormuz.

Analysis

On 1 July, it was confirmed that Iran had breached its enriched uranium stockpile limits in violation of the 2015 Nuclear Deal. This is expected to contribute to further increased tensions with the Trump administration in the coming weeks. The development comes after Iran, on the first anniversary of the US’s unilateral withdrawal from the 2015 Nuclear Deal in May, threatened to withdraw from key commitments in the nuclear deal by 7 July if European powers did not meet financial and oil commitments in regards to protecting Iran from US sanctions.

Iran is also due to take further moves to breach the nuclear deal after 7 July by increasing uranium enrichment purity levels over the 3.67 percent limit specified in the deal. However, Iran may choose to only increase the purity levels to 3.68 percent in a symbolic move. This would be far below the weapons-grade level of more than 90 percent needed for fissile material in a nuclear bomb but is likely to raise concerns of Iran shortening the time needed to reach this level. However, Iran’s foreign minister stated that Iran’s measures were "reversible" if the Europeans began abiding by their commitments.

Failure by European powers to stop the collapse of the nuclear deal could result in the EU joining the US in imposing sanctions on Iran. This in turn has the potential to increase the risk of action by Iran in an attempt to force the West into loosening its impact on the Iranian economy. This could take the form of acting on threats to block the Strait of Hormuz, military action, or continuing efforts to step up nuclear activities. However, European powers see the nuclear deal as crucial for regional stability and are likely to continue efforts to dissuade Iran from breaching the nuclear deal.

Implications

While the US has said it would increase its pressure on Iran until "its leaders alter their course of action", Iran has said it will not negotiate with the US whilst the sanctions are still in place. Although both the US and Iran have stated they are not wishing to engage in conflict, the room for error and miscalculation on both sides remains high, with Iranian security officials saying that any violation of its territory would see Iran ‘strongly respond’. Additionally, the risk of escalation was demonstrated in the wake of Iran shooting down the US drone on 20 June when the US came close to carrying out military strikes on three Iranian targets in retaliation. Trump called off the action only moments prior to it being due to occur as it was estimated that the strike could kill as many as 150 people, which he reportedly saw as disproportionate to shooting down an unmanned drone.

Following Trump’s U-turn on retaliatory strikes, reports indicated that the US has undertaken cyberattacks against Iran in efforts to disrupt the country’s rocket and missile launch facilities. However, Iran’s Minister for Information and Communications Technology stated the attacks, which were pre-planned, had been unsuccessful. Cyberattacks are regularly traded between the US and Iran, but are thought to have increased in frequency since the US re-imposed sanctions on Iran last year.

The US-Iran tensions have also impacted aviation in the region. After Iran shot down the US drone, the US Federal Aviation Administration (FAA) banned US airlines from flying over Iran. As a result, United Airlines cancelled both of its India routes until at least 1 September 2019. Two other major US carriers, American Airlines and Delta Air Lines, also confirmed they will not fly in Iranian airspace.

Iran stated that the US drone was shot down using a domestically made Khordad 3 surface-to-air missile system (SAM). Khordad 3 is a mobile air defence system capable of attacking up to four targets simultaneously to ranges of 50 miles and altitudes of 90,000 feet—higher than commercial aircrafts, as well as US military aircrafts, fly.

The concern for airlines is the close proximity to which the attack occurred to civil aviation routes. While Iran disputes the location of the attack and claims the drone was in Iranian airspace, the US says that the drone was in international airspace. According to the US FAA’s flight tracking systems, a civil aircraft was within 45 nautical miles of where the drone was shot down. There are particular concerns that there is a potential for misidentification or miscalculation which could result in a commercial flight being inadvertently targeted. Similar concerns were heightened after Malaysia Airlines Flight MH17 was shot down by a missile in July 2014 over Ukraine, killing all 298 on board.