BICOM

What happened: New sanctions have been imposed on Iran by the United States and six Gulf countries, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. US Treasury Secretary Steve Mnuchin made the announcement on Wednesday, as part of a trip to Middle Eastern allies.

• The sanctions were imposed on 25 corporations, banks and individuals linked to Iran’s support for groups including Hezbollah
• Twenty-one of these constituted a significant network of businesses providing financial support to the Basij Resistance Force, a paramilitary group the US Treasury says works for the Islamic Revolutionary Guard Corps
• Mnuchin said yesterday: “The president couldn’t be more clear that we are executing a maximum pressure campaign on Iran.”
• The Washington Post reported that the day after anti-government protests erupted in Iraq, Iranian Gen. Qassim Soleimani flew into Baghdad late at night and “took a helicopter to the heavily fortified Green Zone, where he surprised a group of top security officials by chairing a meeting in place of the Prime Minister”.
• Soleimani told Iraqi officials “we in Iran know how to deal with protests.” The day after his visit, the death toll increased to over 100, as protests became significantly more violent

Context: The US has applied sanctions of increasing severity since it pulled out of the Iran nuclear deal in 2018. One of the most significant criticisms of the Iran nuclear deal was its failure to address Iran’s regional activities, including its threats to Arab Gulf allies, as identified in BICOM’s paper, Britain’s Iran dilemma.

• The new sanctions are an attempt to restrict Iran’s ability to fund its destabilising regional activities through its support of Islamic Jihad and Hamas in Gaza; the Houthis in Yemen, Hezbollah in Lebanon and Syria, pro-Assad militias in Syria, and militias in Iraq.
• Yesterday Barak Ravid reported for Axios that Israel is urging foreign allies to condition aid to Lebanon on action to take steps against Hezbollah’s project to develop precision-guided missiles in Lebanon.

Looking ahead: Despite heavy sanctions damaging the Iranian economy, Iran has been able to maintain support for regional military activities and its proxy militias such as Hezbollah. But protests sweeping Lebanon, and mass protests in the Shi’ite sector of Iraq, demonstrates that Iranian interests are under threat and could limit Iran’s freedom of manoeuvre in the weeks ahead.