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Home Analysis

Iranian aggression is all about the economy

Iran, it appears, is trying to create a crisis in reaction to its worsening economy and its unsuccessful effort to overcome U.S. sanctions.

by  Eli Leon
Published on  05-17-2019 00:59
Last modified: 05-17-2019 13:28
Iranian aggression is all about the economyEPA/ABEDIN TAHERKENAREH

Iranians burn US and Israel flags during an anti-U.S. and Israel demonstration after the weekly Friday prayer ceremony to show their solidarity with Palestinians | Photo: EPA/ABEDIN TAHERKENAREH

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The recent escalation with Iran coincided with the anniversary of the U.S. decision to pull out of the 2015 nuclear deal with the Islamic republic.

Iran, it appears, is trying to create a crisis in reaction to its worsening economy and its unsuccessful effort to overcome U.S. sanctions.

U.S. President Donald Trump's National Security Adviser John Bolton recently revealed that the administration was sending an aircraft carrier to the region, as well as strategic bombers, because of "troubling and escalatory indications" suggesting that Iran was planning to attack U.S. interests or its allies in the region.

Hours after Bolton made that statement, the Iranian media reported that the regime would announce its pullout from the nuclear deal. President Hassan Rouhani did exactly that several days later with a televised speech to the nation.

In his speech, he warned that the Islamic republic would resume high-level enrichment of uranium unless its European trade partners found a way to bypass U.S. sanctions.

This latest behavior underscores the changing Iranian strategy for coping with the debilitating sanctions, which have dealt a crushing blow to Iran's economy.

According to the International Monetary Fund, Iran's economy will likely contract by 6% in 2019, compared with 4% in 2018. Inflation is set to climb to 40%.

These figures do not take into account the economic impact of the Trump administration's decision not to renew the waivers it gave eight nations so that they could continue buying oil from Iran.

Meanwhile, the local currency is nosediving against the dollar, exacerbating the discontent.

Iran plans to use pro-Iranian allies to do its bidding by staging provocations that would complement its combative rhetoric.

This new approach was already on display this week, when oil tankers were sabotaged near the Strait of Hormuz, including two Saudi vessels.

Another example was the drone attack on Saudi oil installations near the capital of Riyadh. The attack was claimed to be carried out by the Houthis, a militia rebel group in Yemen backed by Iran.

According to reports in the U.S. media, the administration believes that Iran was responsible for sabotaging the tankers. After all, the incident took place not long after Bolton's announcement about troubling" intelligence showing that pro-Iranian groups were planning to attack American troops in the region. One of those indications was the transfer of Iranian missiles through the area.

Bolton's announcement may have helped deter Iran from targeting the U.S. but it did not stop it from engaging in other forms of aggression.

Iran has blamed Secretary of State Mike Pompeo for the recent escalation and has cast Bolton as a warmonger. Iran's Foreign Minister Mohammad Javad Zarif repeatedly refers to Bolton, Prime Minister Benjamin Netanyahu, Saudi Crown Prince Mohammed bin Salman and Abu Dhabi Crown Prince Mohammed bin Zayed as the "B Team" because they are supposedly trying to make Trump go to war with Iran.

But despite the rising tensions, U.S. and Iranian officials have made it clear that neither side wants war. Trump even said that he would like Iranian leaders to call him so that they could make a deal.

Iran's Supreme Leader Ali Khamenei responded by saying that he would not renegotiate the 2015 agreement. But he might ultimately buckle if the sanctions continue. It all boils down to the economy.

Tags: EconomyIranIsraelTrumpUnited States

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