United States Institute of Peace

The Iran Primer

Part II: Sanctions Hit Iran’s Oil Production

            Iran’s oil production dropped 17 percent in 2012, according to a new according to a new report by the U.S. Energy Information Administration. But Iran managed to remain the second-largest crude oil producer in the Organization of the Petroleum Exporting Countries on average. Consumption of liquid fuels fell one percent in 2012. The following is a chart and excerpt from the report.

           
            Iran's exports of crude oil and lease condensate declined to approximately 1.5 million barrels per day (bbl/d) in 2012, compared to 2.5 million bbl/d in 2011. This 39% decline in exports was coupled with a 17% drop in crude oil and condensate production and a 1% decline in liquid fuels consumption including gasoline, diesel, jet fuel, and other products.
 
            While the world's supply of oil increased by about 2%, or 1.8 million bbl/d in 2012, oil production in Iran declined by nearly 700,000 bbl/d from the 2011 level. Most of the 2012 drop in production is attributable to tightened sanctions. A smaller decline in 2011 resulted mainly from declining production in aging fields. Iran remained the second-largest OPEC crude oil producer on average during 2012, but it exceeded Iraq's production only narrowly. In August 2012, Iran's monthly crude oil production fell below Iraq's for the first time since 1989.
 
            A new set of sanctions by the European Union became effective on April 1, 2013. The new sanctions bar EU insurance companies from providing coverage to any refiner and refinery operators that process crude oil of Iranian origin. The new provision will mostly affect refiners in South Korea and India, which rely heavily on European insurance providers. The new sanctions may further affect Iran's exports and production over the next few months as refiners try to find alternative suppliers of insurance.
 

Part I: Iran Oil Sales Plummet

Click here for the full report.
 

Part I: Iran Oil Sales Plummet

            In 2012, Iran’s oil exports dropped to their lowest level since 1986, according to a new report by the U.S. Energy Information Administration. Exports declined 39 percent between from 2011 to 2012 alone due to tightened U.S. and E.U. sanctions. Production of crude oil and condensates also fell by 17 percent that year. The following is a chart and excerpt from the report

           
            In 2012, Iran's exports of crude oil and lease condensate dropped to their lowest level since 1986 (see chart above) as the United States and the European Union (EU) tightened sanctions targeting Iran's oil sector. Iran's 2012 net estimated oil export revenue, at $69 billion, was significantly lower than the $95 billion total generated in 2011. Oil exports make up 80% of Iran's total export earnings and 50% to 60% of its government revenue, according to the Economist Intelligence Unit.
 
            Sanctions affecting investment in Iran's oil sector have also been tightened, resulting in cancellation of new projects by several foreign companies; they also negatively affected existing projects. Following the implementation of sanctions in late-2011 and mid-2012, Iranian oil production dropped dramatically. Although Iran had been subject to four earlier rounds of United Nations sanctions, these much-tougher measures passed by the United States and the European Union have severely hampered Iran's ability to export its oil, which directly affected its production of petroleum and petroleum products.
 
            The U.S. and EU measures prohibited large-scale investment in the country's oil and gas sector, and cut off its access to European and U.S. sources of financial transactions. Further sanctions were implemented against the Central Bank of Iran, while the EU imposed an embargo on Iranian oil and banned European protection and indemnity clubs (P&I Clubs) from providing Iranian oil carriers with insurance and reinsurance. The implementation of insurance-related sanctions was particularly effective in stemming Iranian exports, which affected not only European importers but also Iran's Asian customers who were forced to temporarily halt imports.
 

Part II: Sanctions Hit Hard Iran's Oil Production

Click here for the full report.
 

Al Qaeda and Iran: Enemies with Benefits

Matthew Duss

            On April 22, Canadian authorities arrested two men who allegedly planned to derail a U.S.-bound passenger train. Officials said al Qaeda elements in Iran gave “direction and guidance” to Chiheb Esseghaier, 30, and Raed Jaser, 35. But police have not found evidence of Iranian state sponsorship. And Tehran has denied any connection to the plot.
 
What has been the relationship between Iran and al Qaeda?
            Iran and al Qaeda have had a complex and rocky relationship for two decades. The Shiite theocracy and the Sunni terrorist organization are not natural allies. Al Qaeda’s hardline Salafi/Wahhabi interpretation of Islam believes that Shiites are heretics. In 2009, a leader of al-Qaeda in the Arabian Peninsula proclaimed that Shiites, particularly Iranians, posed more of a danger to Sunnis than Jews or Christians. Iran has likewise been hostile toward al Qaeda and its former Taliban hosts in Afghanistan.
            But countries and movements with seemingly inimical views can work together when circumstances warrant. The 9/11 Commission reported that Iran and al Qaeda contacts go back two decades, beginning when Osama bin Laden was based in Sudan. The report also noted “strong but indirect evidence" that al Qaeda played "some as yet unknown role" in the 1996 bombing of the Khobar Towers, a U.S. military barracks in Saudi Arabia, by the Iran-supported Saudi Hezbollah. A number of the 9/11 hijackers traveled through Iran to Afghanistan, although there is no evidence that Tehran was aware of the plot.
            Some of the best information available on the al Qaeda-Iran relationship was found during the May 2011 raid on Osama bin Laden’s compound in Abbottabad, Pakistan. Documents “show that the relationship is not one of alliance, but of indirect and unpleasant negotiations over the release of detained jihadis and their families, including members of Bin Laden’s family,” according to the Combating Terrorism Center at West Point. “The detention of prominent al Qa`ida members seems to have sparked a campaign of threats, taking hostages and indirect negotiations between al-Qa`ida and Iran that have been drawn out for years and may still be ongoing.”
            Iran and al Qaeda are clearly at odds in the Syrian civil war. Bashar Assad’s regime is Iran’s key Arab ally, and Tehran is expending considerable effort to prop up Damascus. Al Qaeda, on the other hand, has joined the anti-Assad insurgency. Ayman al Zawahiri, Osama bin Laden’s successor, has urged fighters from around the region to join the battle against Assad. The Nusra Front, one of Syria’s strongest rebel groups, recently pledged its allegiance to al Qaeda.
 
Are there known al Qaeda elements in Iran? Where? 
            Hundreds of al Qaeda fighters in Afghanistan fled west to Iran after the U.S.-led coalition intervention in October 2001, and many were detained by Iranian authorities in eastern Iran, near the Afghanistan and Pakistan border. Iran claims to have extradited more than 500 to their home countries in the Middle East, Africa and Europe.
            Some high-profile detainees, including top al Qaeda strategist Saif al Adel and Osama bin Laden’s son-in-law Sulaiman Abu Ghaith, were held with their families under house arrest in Iran, possibly as insurance against al Qaeda attacks on Iranian interests or for use as bargaining chips. Al Adel and Abu Ghaith were given greater freedom to travel in exchange for the 2010 release of an Iranian diplomat who had been held in Pakistan’s tribal areas. Abu Gaith was captured in Jordan by the United States in February 2013.
            It’s unclear how close an eye Iranian security services are keeping on al Qaeda elements currently living in eastern Iran. The remote area along the Afghanistan-Pakistan border is sparsely populated and home to the Baloch ― a Sunni ethnic group that has waged a decades-long insurgency against Pakistan and Iran. A 2011 U.S. Treasury Department report accused Tehran of having a secret deal with al Qaeda that allows the group to funnel funds and operatives through Iranian territory. But the report did not cite Iranian officials for complicity in terrorism.
 
Canadian police said there is no evidence of Iranian sponsorship so far. What is known about Iran’s role?
            It would mark a shift in strategy if Iran was actively involved in the planning of al Qaeda attacks. Canadian officials have claimed that al Qaeda leaders in Iran gave the two men considerable independence in planning and carrying out the alleged plot. The Iranian government probably would not have allowed them that operational freedom. Based on the evidence released by Canada, Tehran was probably not involved in any significant way.
            The costs would not have been worth the benefits to Iran either. Any proven Iranian role in a terrorist attack that derailed a passenger train would have further strengthened international opinion against Tehran. It is already isolated and faced with many layers of economic sanctions. The timing is also awkward. Iranian complicity could jeopardize negotiations over its controversial nuclear program with the United States and five major world powers. At the same time, Iranian strategy has been opaque even to those who have observed Iran for decades.
 
Matthew Duss is a policy analyst at the Center for American Progress.
 

Politics and Art of Iran’s Revolutionary Tulips

Garrett Nada

 

      Their petals are on the national flag. They line the dome above Ayatollah Khomeini’s tomb. They adorn billboards of martyrs from the war with Iraq. They have been depicted on coins and postage stamps. And hotels, parks and restaurants are named after them.
 
      In Iran, the tulip―laleh in Farsi―is ubiquitous.
 
The Flag's Tulip
      The tulip became one the most common symbols of the 1979 Islamic Revolution. Its new flag featured a red tulip in the center to commemorate the revolution’s martyrs. The sword and the four crescent-shaped petals form the word “Allah” and symbolize the five pillars of Islam― faith, prayer, charity, fasting during Ramadan, and the pilgrimage to Mecca. 

            The revolution has always had a soft spot for the fragile spring flower, a symbol of martyrdom in Shiite Islam. In early Shiism's history, the Prophet Mohammed’s grandson Hossein fell in battle against the Umayyad Dynasty near Karbala, now part of modern Iraq. Tulips sprang from Hossein’s blood, according to tradition.

Art of War
 

       During the 1980-1988 war with Iraq, the government featured the tulip in posters, billboards and art. Iranians referred to the war as the “Holy Defense” and considered fallen soldiers martyrs. “Every soil is Karbala,” was a slogan during the war.

      The painting on the left shows a soldier’s blood forming a tulip. Hossein sits on a white horse in the background.

 

72 Tulips in Mourning

 

      Iran’s late supreme leader, Ayatollah Ruhollah Khomeini, died on June 3, 1989. The tomb of the revolutionary cleric is decorated with 72 stained glass tulips. The flowers represent the 72 martyrs who fought and died with Hossein in Karbala.

      Hossein’s forces knew they were grossly outnumbered, but they believed it was better to die fighting for justice than to live with injustice. Sacrifice in the name of justice has been central to the Shiite sect ever since then.

 

Tulips in Opposition

      Ironically, the tulip also became a symbol of Iran’s opposition after the June 2009 presidential election. At its peak, millions took to the streets of cities across Iran to challenge the reelection of President Mahmoud Ahmadinejad. After a brutal government crackdown, the tulip became the metaphor for the Green Movement’s struggle to survive—and to fight for justice. 

      On her blog, activist Melody Moezzi compared the opposition to tulips. “Tulips are delicate flowers by nature. A mild wind properly timed can prove fatal. But tulips do not die. They are perennial. Between blooms, they prepare.”

 
A Tulip Love Story
       The tulip’s importance in Iranian culture actually dates to ancient times. Nowruz, the Persian New Year, has been celebrated for over 3,000 years. Tulips are a common sight during Nowruz, which marks the coming of spring. Each year, Iranians sing, “This spring be your good luck, the tulip fields be your joy.”

      In a legend about sixth-century Iran, the young prince Farhad heard rumors that Shirin, his great love, had been killed. He was so overcome with grief that he jumped off a cliff. But the story had a Romeo-and-Juliet twist. A jealous rival actually spread a false rumor to sabotage the relationship. According to lore, tulips then grew where his blood had dripped. Ever since, the flowers have been associated with eternal love and sacrifice.
 

The Tulip on Facebook

       Fifteen centuries later, the tulip is now even used on Facebook as a logo for a website that commemorates the martyrs of the Iran-Iraq war.

      Laleh is a motif common in culture and commerce as well. Laleh Park is one of the capitals’ largest recreation areas. The Tulip Hospital is a major health care facility in Tehran. And the old Intercontinental Hotel was even renamed the Laleh International after the revolution.
 

Garrett Nada is a Program Assistant at the U.S. Institute of Peace in the Center for Conflict Management.

Photo credits:
• Tulips on stamp by Rozita (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
• Iran flag via www.en.iran.ir
• Khamenei with stairs and soldiers via Beheshte Zahra
•"Certitude of Belief" (ca. 1981) via University of Chicago Library
•Tomb of Ayatollah Khomeini via http://en/imam-khomeini.ir
•Green Movement tulip via Facebook and www.greenfriend.info
•Farhad meets Shirin via Wikimedia Commons
•Tulip logo via Lalehaa and Facebook

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Hagel: Arms Deal Clear Signal to Iran

            U.S. Defense Secretary Chuck Hagel warned that a $10 billion arms deal with Israel, Saudi Arabia and the United Arab Emirates is a “clear signal" that all options are on the table for preventing a nuclear-armed Iran. Hagel arrived in Israel on April 21 for his first visit as defense chief. Defense Minister Moshe Ya’alon and Hagel agreed that economic sanctions and diplomacy should be exhausted before considering a strike.

            Ya’alon emphasized that a “credible military option” is necessary to convince Iran to abandon suspected military dimensions of its nuclear program. “[W]e keep our right and capabilities to defend ourselves by ourselves,” he warned. Hagel acknowledged Israel’s right to defend itself and make its own calculations. He spent three days in Israel before heading to Jordan, Egypt, Saudi Arabia and the United Arab Emirates. The following are excerpted remarks by Hagel and top Israeli officials.
 
Secretary of Defense Chuck Hagel
            “[A]ll military options and every option must remain on the table in dealing with Iran.  That's been a consistent position of mine, regardless of the positions I've held as United States senator and civilian. 
            I support the president's position on Iran. And it's very simple. And I have stated it here, and I've said it many times, as the president has. Our position is, Iran will not be allowed to develop a nuclear weapon, the prevention of Iran from developing a nuclear weapon, period…”
[R]egarding your point about whether Israel should strike Iran, as I said on that trip over here, Israel is a sovereign nation.  Every sovereign nation has a right to defend itself.  That calculation has to be made by the sovereign nation. 
            As to your question regarding any minor disagreements about timing, what I was referring to is intelligence agencies always are within ranges of their positions based on measurement of intelligence on all issues. And that doesn't necessarily always come out exactly the same way or in the same time schedule. 
            But I also believe I said that there was no question about our intelligence agencies working very clearly and closely together on this issue, and we are not only in complete agreement on the policy about Iran, but also we are in total agreement on -- if a time should get to a point here, where we will then have to develop other strategies or other options, and I don't think there's any daylight there or any gap…
            Well, the sanctions on Iran are, I believe, as potent and deep and wide set of international sanctions that we've ever seen on any country.  And those will continue to increase, but I -- I believe -- and there's a rather significant metrics and measurements that give you this information, that those sanctions are causing a tremendous amount of difficulty for Iran. 
            It is the policy of the United States that -- and many of our allies -- to work many tracks in dealing with Iran, and certainly international sanctions are one.  And they are having an effect. Whether it leads to an outcome that we desire remains to be seen. 
            But in any event, that's why you use all the different tools that nations have working together. And as I said, the military option is always an option, and it is always on the table…” April 22, at a joint press conference with Defense Minister Ya’alon
 
            “Israel and the United States see the threat of Iran exactly the same as do many other countries, not just in the Middle East.  So I don't think there's any daylight there. 
            When you break down into the specifics of -- of the timing of when and if Iran decides to pursue a nuclear weapon, there may well be some differences, but our -- generally -- and, again, I can't speak for General Clapper -- I believe our intelligence is -- is generally pretty close to each other, as well as other intelligence agencies. 
            But the bottom line is that Iran is a threat.  It's a real threat.  And the United States' policy has been very clear on this.  And I think everyone knows it.  As other nations, the -- the Iranians must be prevented from developing that capacity to build a nuclear weapon and deliver it.  And you work out from there…
            I think the United States' course of action, as well as other nations' in the P5-plus-one and many others, working many tracks with Iran, the diplomatic track, the economic sanctions track.  I mean, if you stop just for a moment and look at the U.N. sanctions, international sanctions on Iran, I don't know of an international regime of sanctions that have been more effective, have been more unified and tougher than what's being applied to Iran.
            We know through many measurements that those sanctions are hurting Iran significantly.  Now, does that assure that Iran is brought to a bargaining table or Iran would give up the possibility of achieving a goal of -- if that's their goal?  And I'm not certain we know that, that that decision's been made alone, maybe not.  
            But I think we look at all the dynamics in play and use all the tracks.  I've said, the president's said, all the leaders of the last couple of administrations have said that the military option is -- is one option that remains on the table, must remain on the table.  So we've never taken an option off the table, but military options, I think most of us feel, should be the last option. 
            If that is an option that's required, then we'll have to make that decision, but I think it's our sense, the United States and many of our allies, that these other tracks do have some time to continue to try to influence the outcome in Iran. 
            There's an election coming up in June in Iran.  No one can predict how that might affect the further direction of Iran in policy.  So I think our policy is the correct policy.  Certainly, Israel has every right and responsibility to make their own assessments, but we're working very closely and will continue to work very closely with Israel…
          I don't think there's any question that that's [the arms deal under negotiation] another very clear signal to Iran.  But I think that signal and that reality and that policy has been very clear to Iran for some time.  But this -- this new set of military capabilities to Israel is not new in the sense that it has been the policy of the United States to continue to enhance the military qualitative edge for Israel.  And so this just continues that policy and -- and that dimension...
            When I said that Iran is a real threat, it isn't just the potential of being a nuclear threat.  Iran is a state sponsor of terrorism.  That in itself is a threat to not just the region, but to our interests in -- in the region and around the world.  When you further expand that threat to the possibility of acquiring nuclear weapons, it becomes pretty clear the dimension of the threat…” April 21, to the media enroute to Israel
 
Prime Minister Benjamin Netanyahu
              “Israel appreciates deeply, the support, the military and security support, that it enjoys from the United States – it reflects a very deep alliance between our two countries and the defense of our common interests and our common values.
            Nowhere are these values and interests challenged more than by the arming of terrorist groups by Iran with sophisticated weapons, and equally, Iran’s attempt to arm itself with nuclear weapons. This is a challenge that Israel cannot accept, and as you and President Obama have repeatedly said, Israel must be able to defend itself, by itself, against any threat. In any case, it is good to have you in Jerusalem.  It is good to have the support, friendship and alliance of the United States.  We deeply appreciate it.” April 23, at a meeting with Hagel  
 
Defense Minister Moshe Ya’alon
            “The United States and Israel face common threats and challenges in our tough neighborhood, the Middle East, above all from Iran
            Iran not only threatens the security and stability of the Middle East, but of the entire world.  Iran threatens to wipe Israel off the map.  It backs Hezbollah in Lebanon and Hamas in Gaza.  And it is assisting the Syrian regime to kill tens of thousands of innocent civilians.  Iranian regime is involved in Afghanistan, Iraq, Yemen, Sudan, and more.  And Iran is developing nuclear weapons…
            But without a credible military option, there is no chance that the Iranian regime will realize that he has to stop the military nuclear project.  And in certain circumstances, the military option should be exercised.  So this is our very clear policy.  And, of course, we keep our right and capabilities to defend ourselves by ourselves.” April 22, at a joint press conference with Hagel
 
President Shimon Peres
            “The Iranian people are going to have elections very soon.  I try to understand what do they want.  Iran doesn't have a single enemy.  Nobody threatened Iran.  Why did their leaders decide to become a threat to others?  
            It's hard to understand because they don't need neither any sort of weapons.  And if I were an Iranian, I would really try to see that our children are having enough food for breakfast and young people have an occasion to be educated and live in peace.  
            What's wrong with peace?  Even if peace is not enriched uranium -- you know, you can make anything even without enriched uranium if nobody is threatening you. 
            And I think from that point of view, your visit is timely and meaningful.  It is not just to pay a visit in this country.  But it means that the message coming from you is that you are determined, as really a leader of the free world, not to permit Iran to make this terrible mistake and become nuclear. 
            If it can be achieved by diplomatic means, the better.  Otherwise, they must know that just by diplomacy, it will not be forgiven.  And the president spoke very clearly.  I was watching your interview now on the television.  You said actually the same thing. 
            And I have the full trust in your position, in your seriousness, because, really, Israelis understand that Iran is not just a threat to Israel.  It's really a threat to the peace in the world, for no reason whatsoever.  The world doesn't threaten Iran. 
            And it's a message, don't wait.  You have a choice.  You don't show animosity to Iran.  You simply tell them not to make the Middle East a terrible place of threats and the mass destruction weapons.  You can see what's happening now in Syria…
            We can and we should help other people to overcome their existential problems without going into politics or religion.  And we can prevent the Iranians from making themself a catastrophe for their own sake and for the rest of the world.” April 22, to the media with Hagel
 
 

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