United States Institute of Peace

The Iran Primer

Sagging Oil Prices and Iran

Matthew M. Reed

What impact has the fall in global oil prices had on Iran?
 
The oil price collapse since June has had only a modest impact on Iran— so far. But lower revenues have already forced President Hassan Rouhani to significantly reduce budget projections and even decrease Iran’s dependence on oil. More steps may lie ahead, depending on both the market and the results of Iran’s talks with the world’s six major powers on a nuclear deal.

In December, Rouhani presented a budget for 2015 based on an average oil price of $72 per barrel— down from about $100 per barrel in the 2014 budget. But oil has been trading below $50 and it may stay low. So the government has slashed the projected price again to $40 per barrel. Rouhani intends to reduce Iran’s dependence on oil from an average of 45 percent of all revenues to about 31.5 percent.
 
The imploding oil market comes at a time when Iran is already suffering serious economic challenges due to mismanagement, corruption and international sanctions. Inflation remains high even though it has halved to less than 20 percent over the last year.
 
Iran’s currency, the rial, lost half its value in 2012 amid tightened sanctions and has not recovered. The rial’s value climbed after Rouhani took office in August 2013, but it has since fallen again. By the end of 2014, it was trading on the unofficial “open market” for 35,000 per dollar, a modest improvement to the 40,000 per dollar rate at the end of Mahmoud Ahmadinejad’s term.
 
In early December, Iran raised bread prices slightly. More subsidy reform could be on the way to help cope with the shortfall in revenue.
 
Even when prices were high in recent years, sanctions did serious harm to Iran’s economy. But those same sanctions may defer some of the pain from falling prices. Iran’s oil revenues are currently held in customer countries and can only be used to pay for goods and services originating in those countries. For more than two years, revenues have been piling up in banks overseas due to sanctions. By early 2015, they totaled tens of billions of dollars in China, India and other top Iranian customers. Iran may only be adding to these accounts more slowly now that it is selling oil for less.
 
Oil traders and industry sources report that Tehran is offering generous credit terms to customers so there is a delay between oil delivery and payment. If the pain of the price drop is delayed, it won’t be for much longer.

How is Iran’s shortfall in revenue impacting the debate over nuclear talks?
 
Falling oil prices have accelerated the debate in Iran linked to the nuclear file. Supreme Leader Ayatollah Ali Khamenei and hardliners in his corner seem to prioritize Iran’s nuclear program over reconnecting the economy to world markets. They argue that belt-tightening, improvements in self-sufficiency and acceptance of some hardship can allow Iran to maintain its nuclear program— without compromising its revolutionary values. Khamenei calls this his “Resistance Economy” program. The concept, however, remains a catchphrase more than a comprehensive set of policies.
 
President Rouhani, on the other hand, has argued that Iran's economic prospects are directly tied to sanctions and its relationship with the outside world. “Our political life has shown we can't have sustainable growth while we are isolated,” he told a meeting of economists on January 4. To applause, he contended that Iran's foreign policy must serve its economy. Rouhani may not have dismissed Khamenei's “Resistance Economy” outright, but he surely hit a nerve.
 
The hardliner response was immediate and fierce. Days after Rouhani’s speech, Judiciary Chief Sadeq Amoli Larijani insisted thatone must not tie economic issues to nuclear talks.” Connecting the issues and debating them provided “reassurance” to Iran’s enemies, Larijani warned.
 
The debate is far from over but the price collapse is forcing leaders and politicians to pick sides. The supreme leader's allies in the media, judiciary, and military have since warned Rouhani not to incite public opinion against the nuclear program.

What impact have falling oil prices had on Iran’s relations with its oil-rich Gulf neighbors and other OPEC members?
 
Iranian officials have blamed the price collapse on Saudi Arabia and the United States. President Rouhani and Oil Minister Bijan Zanganeh have claimed that the collapse is a political conspiracy. “Those that have planned to decrease the prices against other countries will regret this decision,” Rouhani warned in a televised speech on January 13. “If Iran suffers from the drop in oil prices, know that other oil-producing countries such as Saudi Arabia and Kuwait will suffer more than Iran,” he added.
 
Other officials, like Deputy Foreign Minister Hossein Amir Abdollahian, have called on Saudi Arabia to cut production in order to lift prices.
 
To Riyadh, Iran’s complaints are just noise. Other cash-strapped oil producers also want Saudi Arabia to cut production and keep prices up for everyone else. The Kingdom, however, has little confidence that it or OPEC can prop up prices for long.
 
Instead of gambling on production cuts, the Saudis want to let the market self-correct: They believe in Economics 101. This may take time, but other Gulf and OPEC producers, including Kuwait and the United Arab Emirates, support this strategy. “We cannot continue to be protecting a certain price,” said UAE Energy Minister Suhail al Mazrouei on January 13.
 
Meanwhile, OPEC hawks like Iran and Venezuela can only watch from the sidelines. Venezuelan President Nicolás Maduro visited Tehran in early January to confer with Iranian leaders. “Our common enemies are using oil as a political weapon, and they definitely have a role in the sharp fall in oil price,” Supreme Leader Khamenei reportedly said in a meeting with Maduro.
 
Saudi-Iranian relations were grim before the fall in oil prices. Some foreign policy analysts speculate about whether Saudi Arabia has a secondary agenda, namely slashing prices to hurt Iran. But Riyadh would most likely keep production steady even if it had friendly relations with Iran.

How resilient are Gulf economies compared to Iran?
 
The Gulf states are more dependent on oil revenues than Iran, but they stashed money away over the last half decade to tide them over during busts. Saudi Arabia, Kuwait, the UAE and Qatar are flush with savings, so they can endure lower prices for now. The situation is more challenging for Bahrain and Oman. Unlike Iran, the Gulf states have easy access to international finance and loans.
 
Some sober analysts have argued in Iran’s reformist media that the price collapse will starve the country's oil and gas industry of much needed continuous investment, doing lasting damage. But Iran did weather the last two price collapses in 1999 and 2009.
 
Matthew M. Reed is Vice President of Foreign Reports, Inc., a Washington, D.C.-based consulting firm focused on oil and politics in the Middle East. Follow him on Twitter @matthewmreed
 
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Former US Congressman Visits Iran

Interview with Jim Slattery

Jim Slattery, a former U.S. Congressman from Kansas, visited Iran in December 2014 to attend the “World Against Violence and Extremism” (WAVE) conference, an initiative led by President Hassan Rouhani. He was the first former congressman to visit Iran since the 1979 revolution. Mr. Slattery has been involved in interfaith dialogue initiatives with Iran for ten years, in cooperation with the Catholic University of America, the Peace Research Institute of Oslo, and the Vatican. During his recent visit, he met with senior Iranian officials and discussed the current state of nuclear negotiations between Iran and the world’s six major powers – the United States, Britain, France, Russia, China, and Germany.

You recently became the first former member of Congress to visit Iran since the 1979 revolution. Why did you go? Who did you meet with, and what did you discuss? What did you learn?
 
I went to Iran because I wanted to encourage the Iranians to issue a strong statement condemning violence in the name of religion, especially Islam. I also wanted to learn more about Iran first hand. I am amazed at how few American decision-makers have any personal experience in Iran. Very few American policy-makers have ever been to Iran and even fewer know key leaders in the Islamic Republic. I share President Eisenhower’s view of people-to-people diplomacy.  
 
I met with high ranking members of the Rouhani Government and key leaders in the Majles (parliament). They do not want to be identified in the American media for meeting with me, although some of their names have already appeared in news stories about my trip. But suffice to say I met with the key leaders. I did not meet privately with the president or the supreme leader, but I met with people who are close to them. President Rouhani gave a speech at the WAVE conference strongly condemning violence, particularly in the name of Islam. 
 
We discussed the current state of the nuclear negotiations. I left with the clear impression that the current Iranian government led by President Hassan Rouhani and Foreign Minister Javad Zarif is deeply committed to getting a deal with the United States on the nuclear issue. I think the Rouhani government is prepared to enter an agreement to forego the development of a nuclear bomb. Such an agreement would be consistent with the fatwa issued by the supreme leader. But Iran will insist on retaining an enrichment capability for peaceful purposes consistent with its view of the Nuclear Non-proliferation Treaty.
 
The Iranians are very worried the U.S. mid-term election will make it difficult for President Obama to implement an agreement. The Iranians have little confidence that Congress will have the ability to lift sanctions anytime in the near future. The Rouhani government is prepared to be very flexible in dealing with the technical nuclear issues, but they urgently need sanctions relief. The Iranians think their nuclear program is leverage to gain sanctions relief. The United States thinks sanctions are its leverage to persuade Iran to forego the development of a nuclear bomb.
 
I walked the streets of Tehran freely without fear. Very different than Baghdad. The Iranians I encountered were friendly and interested in the United States. I was impressed with the energy on the streets of Tehran. There are a lot of construction cranes present and the auto congestion is terrible. About every third or fourth car was driven by a woman…Very different than in Saudi Arabia. There were a lot of relatively new cars. 
 
 
 
 
What is your assessment of the mood in Tehran as it negotiates with the world’s six major powers on a nuclear deal?
 
It is hard to get an accurate measure of the mood in Tehran. Young people and the press I met all seemed anxious to see an improved relationship with the United States and Europe.  Keep in mind that 60 percent of Iranians are under age 30, and 60 percent of university students are female. My friends in Iran tell me they are very worried about what they are going to do with all of the educated women! They understand clearly that economic development is key to the stability of the Islamic Republic over the long term.
 
Some lawmakers intend to introduce legislation that would impose new sanctions on Iran if talks falter. What implications could passing such a bill have on the talks?
 
It is a bad idea for Congress to pass additional sanctions at this time. This will only complicate the negotiation process while causing Iranians to question further whether President Obama can implement an agreement because of domestic political opposition in the US. The United States is concerned about whether the Supreme Leader will approve an agreement negotiated by Zarif. So both sides have similar concerns. Additional sanctions at this time send exactly the wrong message, and I fear this legislation could disrupt the talks. 
 
What could a deal mean for US-Iranian relations?
 
A nuclear deal will open the door for immediate cooperation on a long list of critical issues in the region including but not limited to ISIS, Syria, Iraq, Afghanistan, the Taliban, Hezbollah and Israel. Iran would welcome an agreement between the Palestinians and Israel. A deal could also lead to cooperation on oil and natural gas supplies. Iran is a country of more than 70 million people with enormous energy assets and resources with a smart, well-educated population that could become a huge new market for the United States and Europe.
 
You attended the “World Against Violence and Extremism” (WAVE) conference in Tehran. What stakes does Iran have in combatting terrorism in the region?
 
Iran is very worried about ISIS and terrorism in the region. We must not lose sight of the fact that ISIS is Sunni, not Shiite. ISIS hates Shiites as much as they do Jews and Christians. Don’t forget that Iran cooperated with the United States in taking down the Taliban in Afghanistan. Iran is going to play a bigger role in the region - given its geography, history, religion, population and energy resources - whether we like it or not. We must engage Iran at this historic time when its elected leadership wants engagement with the West.  
 
Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org
 

Photo credits: President.ir, Tehran bazaar by Maral Noori, Wikimedia Commons

Nasser Hadian: Iran’s Concerns about Iraq

Interview with Nasser Hadian

The Islamic State in Iraq and Syria (ISIS), a militant Sunni group, has taken control of much of eastern Syria and, most recently, northern Iraq. What are the implications for Iran?
 
            Stabilizing Iraq is extremely important to Iran for a number of reasons.
 
            First, in the long term, Iran is concerned that the insecurity in Iraq could spillover if the situation is not controlled and contained. Iran, however, is not immediately concerned with its own border security.
 
      Second, Tehran basically prefers the continuation of Nouri al Maliki’s government, which is the legitimate government in Baghdad. Iran has good relations with Iraq and does not want a disruption of the post-Saddam Hussein system.  
 
      Third, ISIS has targeted Shiites. It is now stirring up a sectarian war in which Iran would be obliged to protect not only its own citizens in Iraq, but also Iraqi Shiites. ISIS seems to have captured territory with logistical, intelligence and material support from Saudi Arabia and other countries. So Iran feels that it has to back up the government in Baghdad. Tehran, however, does not want the conflict to escalate.
 
What is Iran doing to support the central Iraqi government?
 
            Tehran is providing political support to Baghdad but is keen to prevent the conflict from turning into a full-blown sectarian war. So it is not sending troops. Reports in the media about Iran sending soldiers are purely guesses and have been denied by top officials. But Tehran is likely helping Iraq, under the table, by offering advice about how to fight the militants, and helping with logistics and intelligence gathering. Iran probably had military advisors in Iraq before the crisis anyway.  
 
      President Hassan Rouhani has suggested that Iran could consider joint action with the United States. But Supreme National Security Council Secretary Ali Shamkhani has been careful not to associate Tehran with Washington at all on this issue because he is concerned that many Sunnis in the region would consider U.S.-Iran cooperation a conspiracy of Shiites and Americans against them.
 
      Maliki may be able to quell ISIS if he mobilizes militias to help the Iraqi armed forces. But if Iraq cannot solve this crisis within the next two to three months, the conflict could turn into a protracted war and last for several years. And ISIS may shift its forces if it finds Maliki’s government weaker than the Assad regime, resulting in a war of attrition. The oil-rich region is also an attractive base of operations for the militants, which have already stolen $425 million from banks across Iraq.
 
            An ISIS shift to Iraq would also have regional implications. It would make it much easier for Assad’s forces to suppress Syrian opposition forces. Unlike Iraq’s armed forces, the Syrian Army is relatively intact. The Syrian government is holding back the opposition, which is supported by Saudi Arabia, other Gulf states, and many Western nations. But the swift takeover of Mosul by ISIS showed that the Iraqi army is weak.
 
What are Iran’s core interests in Iraq? Do they overlap with U.S. concerns? If so, how could the two cooperate?
 
      Both Tehran and Washington are concerned with stabilizing Iraq and preventing the breakout of a sectarian war. They also want to ensure the safe passage of oil to international markets and preserve the territorial integrity of Iraq.
 
      Iran and the United States also want to see a more inclusive government in Baghdad. Even Iran would like to see the Shiites share more power with the Sunnis and Kurds to preserve the Iraqi state. Iran wants to see Kurdistan as part of Iraq, even if it continues to be an autonomous region.
 
      Iran’s influence in Iraq and its shared interests with the United States probably led Senator Lindsey Graham to suggest talking with Tehran about the crisis. But there is virtually no chance of publicized cooperation. The more likely scenario would be similar to U.S.-Iran cooperation in Afghanistan in 2001, when Tehran provided U.S. forces with intelligence that helped overthrow the Taliban.
 
            But not all U.S. interests totally align with Iran’s. Washington is likely concerned with ISIS spreading its operations to U.S. allies in the Gulf. 
 
Nasser Hadian is a professor of political science at the University of Tehran.
 
Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org
 
Photo credits: President.ir and Ministry of Defense
 

 

US and Saudi Arabia: Differences on Iran

Interview with David Ottaway by Faris Al Sulayman

What came out of President Obama’s trip to Saudi Arabia and discussions on pressing issues of mutual concern, especially on Iran nuclear talks?
 
           Obama and King Abdullah agreed that their shared goal is to prevent Iran from gaining a nuclear weapons capability. But Saudi Arabia is perhaps more concerned about the implications of improved U.S.-Iran relations if a nuclear agreement is reached. The Sunni kingdom is worried about a tilt in U.S. foreign policy toward Shiite Iran at the expense of Saudi Arabia and the other Sunni sheikhdoms. Obama has said that he is willing to repair the U.S.-Iran relationship. But he has not spelled out what this might mean in practice and what other issues the two countries could cooperate on.
 
     Washington and Tehran were holding secret talks for a year starting with President Mahmoud Ahmadinejad then under President Hassan Rouhani. The Obama administration had not shared the content of those discussions with its Arab allies, which has raised enormous suspicions in the Gulf about U.S. intentions for Iran.
 
     President Obama probably found it difficult to provide the kind of assurances that the Saudi leadership is seeking on Iran and nuclear negotiations.
 
What are the basic differences between the United States and Saudi Arabia on Iran?
 
            The United States and Saudi Arabia appear to have different visions for solving the Iranian nuclear dispute. Saudi Arabia, much like Israel, wants Iran to relinquish its uranium enrichment capabilities or at least cap enrichment at 5 percent – far below weapons grade, or 90 percent. Riyadh also wants Iran’s existing stockpile of 20 percent enriched uranium to be shipped out of the country or turned into a form that cannot be used to fuel a weapon. But the United States and the other five major world powers negotiating with Iran – Britain, China, France, Germany and China – may be open to allowing Tehran to keep limited enrichment capabilities.
 
     Riyadh also wants Washington to take a much more aggressive role in ending President Bashar Assad’s rule in Syria. Damascus is Tehran’s closest ally in the Middle East, so the main battle ground between Saudi Arabia and Iran is Syria. Riyadh is keen on the United States providing more sophisticated arms — anti-aircraft missiles in particular—to opposition forces.
 
            Washington and Riyadh also differ in their strategic approach to the Syrian conflict. Tehran has reportedly invested millions of dollars in Syria’s economy and provided training and arms to its army. So Saudi Arabia’s involvement in Syria is part of a wider effort to curb Iranian influence in the Sunni Arab world. The Sunni kingdom seems dedicated to rooting out the Alawite regime as a way to cut off Iran.
 
If the world’s six major powers and Iran reach an agreement that allows Tehran to continue enriching uranium, might Riyadh pursue its own nuclear program?
 
            Saudi Arabia is further developing its relationship with Pakistan, which became the world’s first Muslim nuclear power in the early 1970s. Riyadh has already built a new center for medium range missiles, and it has a new generation of Chinese missiles. Saudi officials have also been speaking with Chinese military and political leaders.
 
           If Tehran sprinted towards a nuclear weapons capability, Riyadh would likely call on Islamabad to provide warheads for those missiles – shortening the process of becoming a nuclear power. But Saudi Arabia is highly unlikely to enlist Pakistani help unless Iran pushes its program forward.

 Military Balance

 **
 
How are Saudi Arabia’s policies influenced by its relationship with the wider Islamic world? 
 
           First, Saudi Arabia sees itself as the religious leader of the Sunni Arab world. But it is increasingly trying to be the political leader because it has wherewithal to spend money on helping its allies. Saudi leaders feel vindicated by the failures of the Arab spring, and they would like to assert their political and financial weight in the Arab world. The problem is that they have little military throw weight. Saudi Arabia still depends on the United States for its military and security apparatuses and it has a limited ability to project force outside its borders.
 
Oil Balance

 ***
 
David Ottaway is a senior scholar at the Woodrow Wilson International Center for Scholars.
 
Faris Al Sulayman was a research assistant at the Woodrow Wilson International Center for Scholars from 2013-2014.
 
 
*Estimated spending, includes US Foreign Military Assistance via IISS
** Based on “The Gulf Military Balance” report by Anthony Cordesman and Bryan Gold. Click here for Cordesman’s chapter on Iran’s conventional military. Also see The International Institute for Strategic Studies’ annual assessment of worldwide military capabilities.

 

Ominous Divide : Shiite Iran v Sunni Gulf

Frederic Wehrey

What is the current state of Sunni-Shiite tension in the Gulf? How has it changed over the last 15 years?
 
            Sectarian tensions have become a major part of political life in the Gulf Arab states, particularly in Saudi Arabia, Bahrain and Kuwait. Shiites in each state suffer varying degrees of religious discrimination and political marginalization. Tensions are typically portrayed as a spillover effect of sectarian strife elsewhere in the region (the Iraq War, and, more recently, the Syria conflict) or Iran’s deliberate incitement of local Shiite communities in the Gulf. But they are only part of the story.
 
     The roots of Shiite-Sunni tensions in the Gulf are more complex and ultimately more local. They are deeply woven into the political fabric of individual states. Sectarian identities have been further sharpened by uneven access to political and economic capital, official and quasi-official discrimination, and the absence of truly inclusive governing structures. This is true in virtually every field: government bureaucracies, the security sector, the labor market, clerical establishments, the legal system, provincial development and so on. 
 
      The recent rise in tensions is particularly tied to the failure of reforms promised at the turn of the millennium that has left young Shiites deeply embittered and frustrated. Young activists claim that their generation is susceptible to sectarian mobilization because it is shut out of the social compact, deprived of access to economic and political capital, and instilled with a sense of “otherness.”
 
            During the Iraq War, Gulf regimes—particularly Bahrain and Saudi Arabia—increasingly viewed Shiite demands for reform as a security threat. Tensions reached an apogee after the 2011 Arab uprisings, when Sunni clerics and Gulf media attempted to portray initial demands for democracy as narrowly Shiite in character and inspired by Iran. This strategy created fissures within the reform movement by exacerbating Shiite-Sunni identities, as it implicitly highlighted the ruling families as arbiters over a fractious and divided citizenry.
 
            The war in Syria has amplified tensions. The “sectarianization” of that conflict—due to both Assad’s policies and outside intervention by Arab states and Iran—has rippled across the Gulf. Sunni clerics in the Gulf have demonized the Alawite regime and its allies, with blowback on local Shiites. Many Gulf Shiites are now ambivalent, if not opposed, to supporting the Syrian opposition, which is increasingly seen as anti-Shiite.
 
      The recent explosion of social media has deepened discord; it parallels the rise in sectarianism over the past 15 years. Twitter, Facebook and YouTube have created a vast echo chamber for sectarian strife to reverberate from one corner of the region to the other. Social media is a real-time theater where audiences do not just observe but participate in ongoing conflicts in the region. The most strident purveyors of sectarianism are given disproportionate weight on social media.  
 
            Gulf regimes have been inconsistent—and even contradictory—in policing this toxic discourse. At one level, sectarianism in the media has a certain utility: It is a reminder of the monarchy’s value as the glue binding society together. Yet Gulf regimes also fear such vitriol will fuel a dangerous strain of Salafi extremism beyond their control. There are already signs of this happening.
 
            If Gulf political life had greater inclusivity and pluralism, then sectarian identities would be less politicized and less malignant. Social media and regional conflicts would also have less of a mobilizing effect on Gulf citizens. 
 
How has the tension affected the geopolitical balance between Iran and the Gulf states?
 
      The conflict between Saudi Arabia and Iran is not driven primarily by a Sunni-Shiite divide or even Arab-Persian ethnic differences. The conflict is informed by two radically different models of government—each laying claim to Islamic legitimacy—and two very different visions of regional order.   
 
      Iran’s system has enshrined the role of religious authorities in political life and given people a partial say in governance through elections. The Saudi ruling family has effectively de-politicized its clerics and continues to abhor the principle of democratic elections.  
 
            The question of U.S. power in the region is also at the heart of the struggle: Iran sees a Middle East free from U.S. military influence, whereas Saudi Arabia historically has required some sort of external balancer to serve as a check against Iran—and Iraq. The two sides have also jostled for patronage of historically pan-Arab “portfolios,” such as the Palestinian cause. The al Saud see Iran’s involvement in this issue as tremendously threatening to its regional and even domestic legitimacy.
 
            Iran has generally tried to downplay sectarianism in its media and in the way it frames its role in the region. In its proxy conflict with Iran, Saudi Arabia has not pursued an explicitly sectarian foreign policy. But both states have ended up backing local actors that are in fact sectarian—and increasingly so in light of Syria’s war. Regardless of intent, the meddling of the two powers in weak and fragmented states is fueling a dangerous form of identity politics. Yet both sides are also capable of dialing back and tempering sectarianism. This played out in Lebanon after the 2006 war. It is happening again now in Bahrain, where Iran (and Hezbollah) have lowered the tenor of their criticism of Saudi policies. 
 
What are the implications for Western interests in the Gulf?
 
            The rise in sectarianism does not present an immediate threat to U.S. interests in the Gulf. Sectarianism is deeply embedded in the DNA of Salafi-jihadism and the al Qaeda worldview. Gulf funding and volunteers in the Syria conflict are creating new strains of al Qaeda-ism that could eventually threaten Gulf regimes and U.S. interests.  
 
            Gulf Shiites have not volunteered or provided funds to Syrian fighters to the same extent as Sunnis have. Indeed, Shiite clerics have assiduously warned against such activity. A few Shiite businessmen, particularly in Kuwait, have provided funding. But by and large, Gulf Shiites remain focused on their local rights—and within the framework of existing political process.   How long this restraint will last, given the current stalemate on reform, remains to be seen.
 
            U.S. and Western interests may eventually be threatened if Shiite opposition activity takes a more extremist turn. Already, activists from the February 14 Youth Movement in Bahrain have linked the U.S. Fifth Fleet with the repressive tactics of the ruling al Khalifa family. Whether and how this nascent anti-Americanism devolves into a more serious threat depends on how the United States is perceived as a neutral broker.
 
            U.S. officials should see sectarianism in the Gulf as a symptom, a wake-up call for meaningful political reform that could stave off more serious challenges to the monarchies down the road.
 
What are the broader implications for regional stability and even the modern map of the Middle East?
 
            The current sectarian tensions in the Gulf are not prompting a fundamental shift in the regional map. Historically, sectarian affinities were one set of identities that co-existed alongside other affiliations: national, ethnic, tribal/familial, local, urban, generational, and so forth. Looking at the Middle Eastern map in terms of sectarianism downplays the power of these other forces. For most Shiites in the Gulf, the existing nation-state remains the framework through which they conduct their activism.  
 
            There have been very few calls for secession or the creation of a united Shiite state encompassing Shiite communities in eastern Saudi Arabia, Bahrain, and southern Iraq. A Shiite state enjoys little support, given the unique national histories of Shiite communities in each country, the religious and intellectual genealogies of their elites, and the power of familial and tribal bonds.
 
            Bahrain is one instance where sectarianism has contributed to a potential redrawing of the map. Since 2012, Sunni Islamists and regime hardliners have been calling for greater political and military union with Bahrain’s Sunni patron, the Kingdom of Saudi Arabia. 
 
Iran has claimed the Arab uprisings are a continuation of its own 1979 revolution. What influence has Iran actually had on Shiites in the Gulf?
 
            Iran largely abandoned attempts to export its revolution to the Gulf in the 1990s. Gulf Shiite activists also distanced themselves from affiliation with the Iranian government, even while maintaining religious ties to Iranian clerics. Today, Gulf Shiite elites who embrace the Islamic Republic’s principle of velayet-e faqih and regard Supreme Leader Khamenei as their marja’ (clerical reference) do not enjoy wide support.   
 
            But for many Gulf leaders who came of age during that seismic event, the Iranian revolution remains the prism through which they view local Shiite activism. The phobia is partly strategic: Portraying Shiite protestors as Iranian-backed delegitimizes them and undermines the possibility of cross-sectarian cooperation between Shiites and Sunni liberals and reformists.  
 
            Iran is not backing Gulf Shiite activity to the extent that its notorious Qods Force is supporting Shiite militants in Iraq, Syria and Lebanon. There may be scattered and episodic contacts between activists and elements of the Iranian government or Hezbollah. As is the case elsewhere in the region, Iran may have sleeper cells waiting to strike the oil infrastructure of Saudi Arabia’s Eastern Province or the Fifth Fleet in Bahrain. But this does not imply that Iran is directing or orchestrating the post-2011 protests in the Gulf or that its support is crucial to their continuation. 
 
            Moving beyond the Iranian revolution’s long shadow in the Gulf, especially on sectarian relations, may be a matter of generational change. Many Shiite youth in the Gulf described themselves as post-ideological, post-sectarian and even post-clerical. Among the regimes, the ascendance of a younger generation of royalsfor whom the Iranian Revolution is less of a formative memory and sectarian dogma has less usefulness—may also change the dynamics. Yet these positive trends may also be offset by both the growing strength of Salafism among Sunnis and the new strain of sectarianism being bred by the Syria conflict.
 

Frederic Wehrey is a senior associate in the Middle East Program at the Carnegie Endowment for International Peace.

Click here for information on Wehrey's new book, Sectarian Politics in the Gulf: From the Iraq War to the Arab Uprisings.

 

Online news media are welcome to republish original blog postings from this website in full, with a citation and link back to The Iran Primer website (www.iranprimer.com) as the original source. Any edits must be authorized by the author. Permission to reprint excerpts from The Iran Primer book should be directed to permissions@usip.org
 

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