Based on an essay by Sankei Shimbun Middle East Bureau Chief Sato Takao, this article examines U.S. sanctions, anti-government demonstrations spreading across Iraq, Lebanon, and Iran itself, the Revolutionary Guards’ control of domestic markets, and Iran’s security strategy through the “Shiite Crescent.” It argues that developments in the Middle East are a grave issue directly tied to Japan’s energy security.

2020-01-08
The thinking of the Revolutionary Guards is the opposite.
Their logic is that, if the domestic market is cut off from overseas markets, there is no need to comply with international treaties or commercial practices, nor to compete with foreign companies, and therefore market control becomes easier.
The following is from an essay by Sato Takao, Middle East Bureau Chief of the Sankei Shimbun, published in this month’s issue of the monthly magazine Sound Argument, in the feature “World Outlook 2020: Here Is What to Watch,” under the title “The ‘Shiite Crescent’ That Is Driving Iran into a Corner.”
In order to know the truth of things, every Japanese citizen must go at once to the nearest bookstore to purchase this issue.
In the Middle East, the Trump administration withdrew from the nuclear agreement concluded with Iran, and throughout 2019 the confrontation between the two countries intensified.
In particular, the areas surrounding Iran have been in continuous upheaval since autumn, and some observers believe that an unprecedented situation is unfolding in the forty-year history since the 1979 revolution.
Resentment Swirling at Iran’s Feet
In Iraq, anti-government demonstrations that began in early October 2019 in response to economic mismanagement have seen resentment toward Iran rise to the point that “Iran, get out!” has become a rallying cry.
The Iranian consulate general was set on fire twice.
In Iraq, where Shiite Muslims, like Iran’s leadership, make up 60 percent of the population, the Sunni Hussein regime collapsed with the U.S. military invasion in 2003, and U.S. forces fully withdrew in 2011.
Iran did not miss these opportunities and has sought to penetrate Iraq, using Shiite ties as its axis.
When the Sunni extremist organization Islamic State, or IS, rose in 2014, Iran is said to have “immediately sent weapons and ammunition to Iraq and supported the Shiite-led government,” according to a reporter in the capital, Baghdad.
In the 2018 parliamentary election, a pro-Iranian party alliance led by a former transport minister who commanded militias and had contributed to the elimination of IS made significant gains, and Iran also succeeded in installing a pro-Iranian prime minister.
However, in late October 2019, as demonstrators’ demands for the prime minister’s resignation grew stronger, a powerful Iranian commander is said to have visited Baghdad and asked the former transport minister to support the prime minister.
Some militia organizations pledge loyalty not to the Iraqi government, but to Iran, and they have even set up their own checkpoints in various parts of the country.
Politics has fallen into dysfunction because of Iran’s blatant interference in domestic affairs, and economic stagnation has deepened.
This feeling lies at the root of Iraqi citizens’ resentment.
Even more noteworthy is the anti-government demonstration that occurred in Iran itself in November 2019, following those in Iraq.
Because the internet was shut down, details are unclear, but in December the U.S. administration revealed the possibility that more than 1,000 people had been killed by machine-gun fire and other means in demonstrations thought to have been brought under control in only about five days.
There was also the view, reported by Reuters, that “it may have been the largest demonstration in the forty years of the revolutionary regime.”
Iran acknowledged the shooting deaths of some “rioters,” revealing an intention to warn the public not to join demonstrations lightly.
This can be called the reverse side of the regime’s sense of crisis over the spread of criticism against it.
The trigger for the demonstrations was a rise in gasoline prices.
Iran is an oil-producing country, but its refining facilities have become obsolete because of past sanctions and other factors; it exports crude oil and imports gasoline.
Furthermore, in order to suppress public dissatisfaction over the worsening economy, it has kept energy cheap with subsidies estimated at 69 billion dollars per year, or about 7.5 trillion yen.
However, the U.S. administration that withdrew from the nuclear agreement imposed a total embargo on Iranian crude oil, and Iran is said to have struggled because it could not see a path toward its budget for the next fiscal year beginning in March 2020.
It appears that the effects of U.S. sanctions have finally begun to show.
Tensions If Inspections Are Refused
Even as its difficulties deepen, Iran seems likely to continue provoking the international community in 2020 as well.
In May 2019, one year after the Trump administration announced its withdrawal from the nuclear agreement, Iran announced that it would gradually abandon its obligations to implement the agreement, and in November of the same year it resumed uranium enrichment at the facility in Fordow in central Iran.
This facility was built deep underground in a mountainous area in order to avoid attacks by its sworn enemies, Israel and the U.S. military, and it was also reported that a Russian-made air defense system had been deployed there.
The resumption of enrichment at this highly secret facility drew strong concern even from Europe, which seeks to maintain the nuclear agreement, with French President Macron calling it “a fundamental change” in response.
Iran, which wants to lessen the blow of U.S. sanctions, aims to stir in Europe a sense of crisis over “the collapse of the nuclear agreement” and pressure Europe to continue economic relations.
There is a strong possibility that Iran will continue to escalate.
If Iran gives up on Europe and makes a decision such as refusing inspections by the International Atomic Energy Agency, or IAEA, the agreement will effectively be buried, and a situation in which tensions rise all at once can also be imagined.
Iran’s leadership, which is prepared to worsen confrontation with Europe and the United States, will surely never let go of the “possibility of being able to possess nuclear weapons.”
The enrichment level of the uranium possessed by Iran is around 5 percent, necessary for nuclear power plant fuel, and is far from the 90 percent that can be diverted for use in nuclear bombs.
Even if Iran were to obtain a nuclear bomb, the prevailing view is that “the accuracy of its ballistic missiles is still very low,” according to an Israeli military expert.
However, as long as it leaves room for development, the possibility of nuclear retaliation remains, and that has a deterrent effect in making the United States and Israel refrain from military attacks.
The Leadership’s Money-Collecting Machine
In Iran’s current leadership, anti-American conservatives hold great power under Supreme Leader Ayatollah Khamenei.
In the capital, Tehran, I often heard criticism of the nuclear agreement promoted by the moderate President Rouhani: “The government was deceived by accepting a deal with the United States. Trump casually breaks promises between states, and no money is coming in.”
Amid such public opinion, it is difficult to imagine Iran steering toward dialogue with the United States.
In addition, the leadership has ways of obtaining funds even amid economic deterioration.
The Islamic Revolutionary Guard Corps, an elite force directly under the Supreme Leader and a stronghold of anti-American conservatism, conducts a wide range of business domestically and is said to almost monopolize the telecommunications market, hold one-third of petrochemicals, and possess a 15 to 20 percent share of finance.
Considering that the internet was shut down during the November demonstrations and the reality was concealed, the monopoly of the telecommunications market can be regarded as a national strategy.
Common sense would suggest that international isolation means losing opportunities for business expansion, but the thinking of the Revolutionary Guards is the opposite.
Their logic is that, if the domestic market is cut off from overseas markets, there is no need to comply with international treaties or commercial practices, nor to compete with foreign companies, and therefore market control becomes easier.
This structure places the burden on ordinary people forced into hardship by currency collapse and rising unemployment, and it tells the true story of the revolutionary regime.
There is another mechanism through which enormous sums of money flow in.
Pilgrimage.
It is said that an estimated 27 million pilgrims visit the holy site of Mashhad in northeastern Iran each year, and Khamenei has entrusted its management to clerics he trusts.
The “holy site business,” in which pilgrims spend enormous sums of money, is also highly likely to be a money-collecting machine for the leadership, and Britain’s BBC reports that Khamenei’s total assets are estimated at 95 billion dollars.
A Shaking Breakwater Against the United States
The enormous funds earned in this way have been poured into Iran’s external security strategy, which treats the United States and Israel as imaginary enemies.
This is the strategy of strengthening the so-called “Shiite Crescent” in the countries stretching westward from Iran to Iraq, Syria, and Lebanon.
Lebanon, a small country at the western edge, has a population that is 30 percent Shiite, and in the early 1980s the Shiite militia organization Hezbollah was founded.
It is Iran’s “forward office” aiming to overthrow Israel.
If the United States or others launch a military attack on Iran, Shiite militia organizations in surrounding countries will attack U.S. soldiers stationed in Iraq, Syria, and elsewhere, as well as Israel’s nuclear facilities.
That is the core of the revolutionary regime’s survival strategy.
In fact, in September 2019, when oil facilities in friendly Saudi Arabia were attacked by drones and other means, U.S. Secretary of State Pompeo concluded that Iran was involved, yet the United States refrained from a military attack.
One can see the intention to avoid a situation in which chaos deepens in the Middle East.
Kananimoghadam, a former senior official of Iran’s Revolutionary Guards, confidently told the author in Tehran in February 2019, “Khamenei has ordered the government and the military to support Iraq and Lebanon even under U.S. economic sanctions.”
According to the British think tank the International Institute for Strategic Studies, or IISS, Iran sends 700 million dollars a year to Hezbollah and 16 billion dollars to Iraq and Syria in order to support Shiite forces.
However, following Iraq, anti-government demonstrations triggered by economic stagnation have continued in Lebanon since October 2019, and resentment toward Iran and Hezbollah is growing.
Anti-government demonstrations are occurring simultaneously in Iran itself and in the countries that form the core of the “Shiite Crescent,” and the spearhead of criticism is turning toward Iran’s leadership.
With the U.S. presidential election in autumn 2020, in which Trump will seek reelection, approaching, it is difficult to imagine him making concessions to Iran, and the U.S. strategy toward Iran is unlikely to change dramatically.
Sanctions are expected to continue becoming harsher, and Iran’s leadership will likely be driven even further into a corner.
It is impossible to predict how the revolutionary regime will respond, and it can be said to have entered an “uncharted zone.”
The confrontation between Iran and the United States is not someone else’s problem for Japan, which depends on the Middle East for 90 percent of its crude oil imports.
If military tensions rise again, oil prices could soar, and the economy could be affected.
In 2020 as well, we cannot take our eyes off the course of this confrontation, which could even affect Japan’s fate.