Israel war mania

Israel will do what is necessary to protect itself against the Iranian existential threat, Israeli Prime Minister Naftali Bennett said on Thursday. His utterings came at a time when world powers are getting ready to hold talks in Vienna with Tehran on the renewal of the 2015 nuclear deal.

“We will not tire, we will be relentless, when we are talking about the very existence of the Jewish state, we will do what we need to do,” Bennett said in a virtual address to a United States-based virtual conference by the group ‘United against a Nuclear Iran’.

“Iran poses a strategic threat to the world and an existential threat to Israel, and they ought not to be allowed to get away with it.

“If Iran goes nuclear, you will get Turkey, Egypt, Saudi Arabia, the whole Middle East will go nuclear. We have to keep up our pressure on Iran, and we have to stay united in our efforts to do so,” Bennett said.

Former US Ambassador to the UN Nikki Haley, who served under the Trump administration, said she believed the Iran deal, also known as the Joint Comprehensive Plan of Action, was outdated. 

She accused Biden administration of abandoning US Middle East allies on Iran and in specific of sending Saudi Arabia into the arms of Tehran. 

"We should never go and give concessions to Iran and play on their terms," but there should be a conversation with the Arab countries and Israel, Haley said.

"Israel now is contemplating how to deal with Iran without us, that is an unbelievable scenario, and they are not wrong to do that. If I was advising Israel I would say do not count on the Biden administration to help you with Iran, because they are not going to be there," she said.

Republicans and Democrats alike want to stop a nuclear Iran, but the Biden administration lacks bi-partisan support for the revival of the 2015 deal, said Haley. Like Israel, she does not believe the 2015 deal would stop Iran from becoming a nuclear power.

Iranian President Ebrahim Raisi, who is under personal US sanctions over allegations of human rights abuses in his past as a judge, said on Thursday that Iran seeks the “lifting of all US sanctions and neutralization of sanctions,” as he issued an uncompromising tone ahead of the Vienna discussions.

“The negotiations we are considering are result-oriented ones. We will not leave the negotiating table... but we will not retreat from the interests of our nation in any way,” Iranian state TV quoted Raisi as saying.

Under the 2015 deal between Iran and six world powers, Tehran curbed its uranium enrichment program, a possible pathway to nuclear arms, in return for the lifting of US, UN and European Union sanctions.

But former US president Donald Trump quit the deal in 2018 and reimposed harsh sanctions on Iran’s oil and financial sectors that have crippled its economy, prompting Tehran to breach limits set by the pact on its nuclear work.

In spite of six rounds of indirect talks, Tehran and Washington still disagree on which steps need to be taken and when with key issues being what nuclear limits Tehran will accept and what sanctions Washington will remove.

Separately, the chief commander of Iran’s elite Islamic Revolutionary Guard Corps, Hossein Salami, said US pressure on Iran had failed.

“The Americans have used all means, policies and strategies to surrender the Iranian nation... but the Islamic Republic has become stronger,” Salami said in a televised speech to mark the siege of the US embassy in Tehran after the 1979 Islamic revolution.

Mansour Abbas: Most unpredictable politician of Israel

In Israel people know well what a politician will say, except Ra’am leader Mansour Abbas. It is difficult to predict what he will do, whom he is going to join forces with or what he is going to say – which makes him among the most refreshing figures on the Israeli political scene today.

Abbas, who scrambled the political deck earlier this year by bolting from the Arab Joint List and ran Ra’am as an independent party, surprised everyone by displaying a willingness to be a part of any government in order to have an impact and get badly needed funds for the country’s Arab sector.

Following the elections in March, he delivered a watershed speech in Nazareth declaring a willingness to work with all parts of the Israeli political spectrum.

What made that speech so different and noteworthy was that he did not stick to the predictable script. He didn’t slam Israel – as other Arab MKs do reflexively – for racism, oppression, apartheid and the occupation. Instead, his message was one of conciliation, of working together so everyone benefits.

He surprised even more when he signed the coalition agreement in June, marking the first time that an Arab party would be a part of the Jewish state’s governing coalition, not just any Arab party, but an Islamist party.

Abbas surprised again this week when he pledged to United Torah Judaism’s Moshe Gafni to move NIS 100 million of the billions the Arab sector is slated to get in the new budget to the haredi parties to assist their communities.

Abbas is taking money earmarked for the Arab sector and passing it on to the ultra-Orthodox, why? According to Abbas, he was moved by a speech Gafni gave in the Knesset saying that Israel will never accept those not in the mainstream – neither the Arabs nor haredim – and that the country’s weaker elements need to stick together.

Others say it was nothing but a shrewd political move. Abbas likes life in the governing coalition – any governing coalition – so when this government ceases to exist, possibly to be replaced by a right-wing Likud-led government, he wants to ensure that he has allies on the Right who can help him join that coalition as well.

Either way, something is refreshing and even magnanimous about the gesture, something sorely lacking these days when it often seems as if the opposition and coalition parties view one another as mortal enemies.

The gesture did not prove contagious. No sooner did Abbas make the offer, that Religious Zionist Party head Bezalel Smotrich urged the haredi parties – his allies in the opposition – to turn it down, saying it is all part of a nefarious Muslim plan to present themselves as the patrons of the Jews.

And former finance minister Israel Katz (Likud) responded by saying during a Kan Bet interview that Abbas is to the Islamic Movement in Israel what Ismail Haniyeh is to Hamas, thereby trying to link Abbas and Ra’am in the minds of the listeners to Hamas and terror.

When Katz was then asked, if that was indeed the case, why Netanyahu tried to woo that same Abbas into a government he hoped to form earlier in the year, Katz hemmed and hawed and had no real answer.

Here was a senior Likud official blasting Abbas and trying to delegitimize him and his party, when just a few months ago his own party’s head was trying to lure that same leader and party into his coalition. As unpredictable as Abbas is, this was the exact opposite: unabashed cynicism and hypocrisy that was completely unsurprising.

Will BoE and US Fed be on the same page?

The US Federal Reserve has made it official that starting later this month, it will reduce their monthly bond purchases by US$15 billion ($10 billion Treasuries, $5 billion mortgage backed securities). By June 2022, the bond buying program should come to an end. 

The Fed explains that pandemic stimulus can start to be unwound as “substantial further progress in the economy has (been) made toward the Committee’s goals since December 2021.” They left interest rates unchanged, which was expected and continued to use the word “transitory” to describe inflation.  

While some investors believed they would drop this language, it did not seem to matter as once the dust settled, USD ended the day virtually unchanged (slightly lower) from its pre-FOMC levels against other the major currencies. Stocks and bond yields ended higher which should benefit JPY crosses.

Looking ahead to Friday’s non-farm payrolls (NFP) report, economists expect a significant recovery in job growth during the month of October.  A large part of this has to do with the slowdown in September, when non-farm payrolls rose by only 194,000. That number is expected to more than double this week with a consensus forecast of 450,000. 

According to ADP, private sector payroll growth was very strong last month but even though service sector activity hit a record high in October, the shortage of workers drove the employment index lower. As one of the most important leading indicators for non-farm payrolls, this suggests that while more jobs are expected in October, the increase may fall short of the market’s lofty forecast. 

Will BoE hike rate today?

While the countdown to Friday’s NFP report has started, analysts have shifted focus to the monetary policy announcement by the Bank of England (BoE) on Thursday. In many ways, the BoE rate decision should have a greater impact on GBP than FOMC did on the USD because the UK central bank is close to raising interest rates.

As the second major central bank to reduce asset purchases, the BoE has been leading the pack in unwinding pandemic support and with inflation surging, a small contingent of investors believe they could hike as quickly as Thursday. The market is pricing in a 60% chance of 15bp hike which means a full quarter point move is unlikely. However the central bank has done a smaller adjustment before so we can’t rule out that possibility completely.

BoE Governor Bailey and monetary policy committee member Saunders have suggested that an immediate hike may be needed but other policymakers want to see further improvements in labor market activity or evidence that inflation is less transitory before making the move.

With the Reserve Bank of New Zealand raising rates, Bank of Canada announcing ending to Quantitative Easing and the Fed beginning to reduce asset purchases, there is a decent chance for a rate hike by the BoE. It may not be a full quarter point, but it could be 15bp increase. 

The immediate tightening should be wildly positive for the greenback as it is not really anticipated. However, if they forgo a rate hike in November, then a hike in December becomes very likely.

In this scenario, analysts expect no change to be accompanied by hawkish comments which could be initially negative but ultimately positive for GBP. Either way, barring an unexpected surprise analysts see GBP strengthening post BoE announcement, particularly against EUR. 

Iran thwarts attempt by United States to detain an oil tanker

In a major act of defiance, Iran announced Wednesday that it had foiled a US attempt to confiscate Iranian oil in the Sea of Oman, setting the stage for further Iranian defensive acts to protect its oil exports in the face of growing threats from the US to restrict Iran’s oil trade. 

The naval forces of Iran’s Islamic Revolution Guards Corps (IRGC) have launched a daring operation to protect Iran’s oil export after American forces confiscated a giant Iranian oil tanker in the Sea of Oman and transshipped its oil shipment to another oil tanker, the Iranian state media said on Wednesday. 

According to Iran’s state-run TV, the IRGC navy forces conducted a heliborne operation to return the seized oil cargo to Iran. The IRGC troops landed onboard the oil tanker carrying the seized oil and led it into Iran’s territorial waters. 

In the meantime, US forces sent several helicopters and destroyers in a bid to retake the oil tanker but the IRGC navy prevented them from doing so, according to Iranian media. 

The US made another effort to prevent Iran from taking the oil tanker but failed. 

The oil tanker is now in Iran’s territorial waters. Iranian media offered no further detail as to when the encounter happened and which country the seized oil tanker belongs to. 

The IRGC media office confirmed the encounter in a statement on Wednesday and said the oil tanker has docked at a Bandar Abbas port. The statement described the US move as “robbery.”

The United States has remained silent on Iran’s announcement. Of course, a US military official to Al-Jazeera, “The allegations of the Revolutionary Guard Corps about the Iranian oil tanker are not true.”

But the IRGC said it had “clear, telling, and undeniable images of the encounter” that would be shared with mass media. 

The episode marked the first time Iran and the U.S. engaged in a tense encounter since Joe Biden took office nearly a year ago. It also came against a backdrop of heightened tensions between Iran and the West over when to resume the stalled Vienna nuclear talks on how to revive a 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA).

On October 27, Iran said the Vienna talks will begin before the end of November. It also said on Monday the exact date for resuming the talks will be announced this week. 

While Iran’s return to Vienna remains under consideration, Washington and allies in Europe and the region ramped up their pressures on Iran both diplomatically and now economically. 

On the other hand, Iran called on the US to provide “objective guarantees” that Washington won’t renege on its commitments under a revived nuclear deal with Iran again.

Iranian Foreign Ministry spokesman Saeed Khatibzadeh described US administrations as “rogue regimes” that are not reliable to work with. 

“Onus is on @POTUS to convince int'l community—incl all JCPOA participants—that his signature means something. For that, ‘objective guarantees’ needed. No one would accept anything less,” Khatibzadeh said on Twitter. 

But it seems that the US has refrained from offering such guarantees. The secretary of Iran’s Supreme National Security Council, Ali Shamkhani, likened the current state of play between Iran and the US to the Iran-Iraq war in the 1980s. 

“The attacks from Saddam were in progress / the sanctions continue. Part of Iran was under the enemy’s occupation / the Iranian nation’s economy has been held hostage. The combatants were defending (Iran) in the front line / The scientists proceed with the legal nuclear activities,” he said on Twitter. 

Just as Saddam Hussein when he offered to hold negotiations with Iran, Shamkhani continued, President Biden too, is not repentant for his policy on Iran. And he is not willing to offer guarantees, the top Iranian security official added. 

“In case the current situation does not change, the result of negotiations would be clear in advance,” he warned. 

Shamkhani’s remarks, along with reports of a hike in Iran’s oil exports in recent months that seem to be the main reason behind the latest encounter, were the latest sign that the resumption of negotiations between Iran and the West won’t affect Iran’s active resistance policy adopted after former US President Donald Trump launched his “maximum pressure” campaign against Tehran. 

US Fed decision to tapper asset purchase a nonevent

For the first time since the pandemic began, the US Federal Reserve will reduce the stimulus they provided during COVID-19 crisis. Given the significance of this move and what it means for the central bank’s economic outlook, greenback should be trading much higher.

However, there’s been very little demand for the greenback over the past two weeks because the Fed has done an effective job of preparing the market for the imminent change. They’ve been talking about reducing or tapering asset purchases for the past few months giving investors plenty of time to position for the move. Bond yields soared and USD/JPY rose to its strongest level in 3 years just under two weeks ago but since then, we’ve seen more consolidation than continuation.

The decision to taper won’t be the most market moving one on Wednesday. Instead, investors want to know when taper will end and rate hikes begin. Fed Chairman Powell previously said taper could be finished sometime around the middle of next year. A precise end date will be positive for greenback, although it could also be calculated by the amount of bond purchases cut per month.

For example, if they reduce bond purchases by US$15 billion a month starting November, they could be done buying bonds by June 2022. Any number larger than US$15 billion (between Treasuries and mortgage backed securities) would be considered aggressive and anything smaller would be considered conservative.

The larger the reduction, the more upside pressure for the greenback and downside pressure for stocks. With the housing market refusing to cool, the Fed is unlikely to go for a smaller move but based on the new highs in stocks, investors also don’t expect significant hawkishness.

The Fed will be reluctant to make any commitments about rate hikes. Powell will almost certainly downplay the need to change interest rates but investors will make their own assumptions based upon how much they cut asset purchases and what he says about inflation.

CPI growth is at a 30 year high but core PCE, retail sales, non-farm payroll growth and ISM manufacturing declined from the previous month. Right now, there’s a significant misalignment between investor expectations and Fed guidance. None of the members of the FOMC expect rates to rise in 2022 but the market is pricing in over 50bp of tightening in year 2022. 

If the Fed fans those expectations by suggesting that prices are less transitory (or that word disappears completely), the greenback will rise but if they don’t waver from their view that prices will fall, the disappointment will send EUR/USD and USD/JPY plunging. 

Before FOMC, ADP and ISM services, two important leading indicators for Friday’s non-farm payrolls report will be released, making it a very insightful day for the greenback.

India one of largest buyers of military hardware from Israel

Israel and India have agreed to form a task force that will build a 10-year cooperation plan to identify new areas in defense cooperation between the two countries. The plan that includes defense procurement, production and research and development, has been agreed upon during a recent visit of Ajay Kumar, Director General of Indian Ministry of Defense to Israel.

Kumar met with his Israeli counterpart, Director General of Defense Ministry Amir Eshel at the Kirya military headquarters in Tel Aviv for the 15th meeting of the Joint Working Group on defense cooperation.

According to The Times of India, during the meeting, the two officials discussed bilateral military technological cooperation as well as strategic challenges in the Middle East and Indo Pacific regions.

“The two sides reviewed the progress made in military to military engagements, including exercises and industry cooperation,” an Indian official was quoted by the report, adding that “it was also decided to form a new sub-working group on defense industry cooperation.”

India recently participated in the Blue Flag international air drill, sending for the first time a Mirage fighter squadron to Israel. India had also participated in Blue Flag 2017. 

Israel has been supplying India with various weapons systems, missiles and unmanned aerial vehicles over the last few years, making India one of Israel’s largest buyers of military hardware.

A 2020 report by the Stockholm International Peace Research Institute found that Israel’s arms exports over the past four years have been the highest ever and accounted for 3% of the global total. 

According to the report, the top three customers of Israeli arms were India (45%), Azerbaijan (17%) and Vietnam (8.5%). Weapons sales to India have consistently totaled over US$ one billion per year.

In September, India purchased 4 Heron MK II from Israel Aerospace Industries in a deal worth some US$200 million as part of the country’s plans to upgrade the military amid its ongoing border strife with China.

The Indian Air Force already operates more than 180 Israeli-made UAVs, including IAI-made Searchers and 68 unarmed Heron 1s, for surveillance and intelligence gathering, as well as a fleet of IAI-produced Harpy UAVs, which carry a high-explosive warhead and self-destructs to take out targets such as radar stations.

Last year the Indian cabinet approved an order of two Phalcon AWACs from Israel in a deal reportedly about US$ one billion that had been in the works for the past few years.

Mounted on a Russian Ilyushin-76 heavy-lift aircraft the system has Active Electronic Steering Array (AESA), L-Band radar with 360° coverage and can detect and track incoming aircraft, cruise missiles and drones before ground-based radars.

The first three Phalcon AWACS were obtained by the Indian Air Force in 2009 after a US$1.1 billion. The deal was signed between India, Israel, and Russia in 2004.  

The two countries have also signed contracts to manufacture and supply BARAK 8/MRSAM missile kits for the Indian Army and Air Force.

The MR-SAM system, jointly developed by India’s Defence Research and Development Organization (DRDO) in close collaboration with Israel's Israel Aircraft Industry, is a land-based configuration of the long range surface-to-air missile (LRSAM) or Barak-8 naval air defense system. It is capable of shooting down enemy aircraft at a range of 50 to 70 km; it will help to protect India from enemy aircraft and will replace the country’s aging air defense systems. 

Israel accuses Iran for installing advanced anti aircraft batteries in Syria

Israel has carried out hundreds of strikes in Syria in an attempt to thwart Iranian entrenchment and supply of advanced weapons to not only to Hezbollah in Syria and Lebanon but also in countries like Iraq and even further.

While Israeli strikes on Syria have intensified, the response time by Syrian air-defense batteries has become quicker. This has lead to the Israel Air Force (IAF) changing it acts during such operations that include having larger formation during operations so that more targets can be struck at once instead of having jets return to the same target.

In 2018, an F-16 crashed in northern Israel after it was struck by an S-200 missile fired by Syrian forces during an Israeli operation. Syrian missiles have also landed in Israel in recent years, including this year when shrapnel from one missile hit northern Tel Aviv and another errant interceptor missile landed close to the Dimona nuclear site in the Negev Desert.

Iran is a top priority for Israel’s military and Chief of Staff Aviv Kohavi has set aside an additional defense budget for war readiness and military exercises. The IAF has also resumed intensive training for scenarios in which Iran’s nuclear facilities are targeted.

In an attempt to challenge Israeli jets, Iran has changed the deployment of its anti-aircraft missile batteries, separating their radars from the missile launchers. Such a move forces more Israeli jets to take part in any possible operation against the country’s nuclear program.

The IAF believes that the defense industry of Iran is robust. While it might not have an air force, its drone capabilities are enormous and pose a major threat to Israel and other regional countries, as evident from the 2019 Aramco attack and the recent attack on Mercer Street earlier this year.

Defense officials have identified an increased amount of Iranian drones in the hands of Hezbollah, Hamas, and other groups.

Hamas, Palestinian Islamic Jihad group and Hezbollah have all used weaponized drones to carry out attacks after they invested in drone capabilities.

Drones have breached Israeli airspace in recent years, leading the IDF to scramble jets or fire missiles. Hamas used Iranian drones during the last war in May, and several Iranian drones tried to breach Israeli airspace in the North of the country.

Following the attack on Mercer Street, Israeli Defense Minister Benny Gantz warned that Iran has used its drones in several attacks, and it is “exactly why we must act now against Iran. Iran not only strives to gain nuclear capabilities, but it is also sparking a dangerous arms race and creating instability in the Middle East through militias armed with hundreds of UAVs, in Iran, Yemen, Iraq and other countries.”

Warning that the threat posed by Iran is “not a future threat but a tangible and immediate one,” Gantz vowed that Israel will work to remove any threat against Israeli citizens and interests.

Biden wants to mend relations between US and France

Joe Biden, President of the United States, has lately acknowledged that handling of a submarine deal with Australia by his administration was clumsy.

 He sought to repair relations between the US and France during a one-on-one meeting with French President Emmanuel Macron in Italy.

The security pact made between Australia, United Kingdom and the United States, known as AUKUS, caused a rift between the US and its oldest ally, France and resulted in France temporarily recalling its ambassador to the United States

“I think what happened was, to use an English phrase, what we did was clumsy,” Biden told reporters during the meeting with Macron at the French Embassy to the Holy See. "It was not done with a lot of grace. I was under the impression certain things had happened that hadn’t happened."

“I want to be clear: France is an extremely, an extremely valued partner,” Biden continued. “We have the same values.”

Biden later said he was under the impression that France had been informed long before the AUKUS pact was announced, in fact Paris had not been.

“We clarified together what we had to clarify,” Macron then told reporters. “And now what’s important is precisely to be sure that such a situation will not be possible for our future.”

Macron insisted on the need for “stronger coordination" and "stronger cooperation” and said the two countries had taken steps in recent weeks to enhance their ties.

"What really matters now is what we will do together in the coming weeks, the coming months, the coming years," he said.

France was caught flat-footed with the announcement of the AUKUS pact, which deals with security in the Asia Pacific, and reacted angrily to the announcement last month. The pact involves the U.S. and the U.K. selling Australia nuclear-powered submarines and caused France to lose out on a multibillion-dollar deal to provide submarines to Australia.

At the time, one French official likened Biden to former President Trump, who often acted unilaterally to the dismay of US allies.

Biden and Macron have spoken twice over the phone since the incident. On Friday, there were signs of a thawing. Biden and Macron shook hands, sat closely to one another and occasionally smiled in the meeting, giving way to a genial atmosphere that seemed to ease tensions between the US and France in recent weeks.

A senior administration official told reporters following the meeting that the two leaders discussed a range of topics, including Russia, China, Iran and nuclear issues.

The official also said of the US-France relationship: “We’re moving forward.”

 “We had some hard conversations in September and October, I think the conversations heading into November will be exciting and engaging,” the official said. “There’s not any sense that there's some kind of fundamental rift in the relationship, I think, at this point.”

The meeting came at the start of Biden’s second overseas trip as president. Both leaders will attend a Group of 20 Summit in Rome and, later, a major UN climate summit in Glasgow.

If Hezbollah not, who else is responsible for Beirut port explosion?

A new report by Rai Al-Youm about the investigations into Beirut port explosion reveals that a bank account based in a Gulf capital and its main branch in Switzerland financed the ship and personalities affiliated with the future introduced nitrates without Hariri’s knowledge. 

The results of the port’s investigations will not be published as it is part of the black box of the war in Syria.

The investigation into the last year’s explosion in Beirut port is still kept secret and the Lebanese judicial authorities have been keen not to publish anything about this investigation. The investigation is supposed to answer the questions that preoccupied Lebanese public opinion since the first day of Beirut’s shaking and destruction.

There are two important questions, 1) who brought the ammonium nitrate to the port of Beirut? Who owned the ship? 

Since the explosion, the Secretary General of Hezbollah Hassan Nasrallah has demanded the judicial investigator in three letters to publish the results of the technical investigation to the Lebanese public opinion. He has said to the judge, “If you do not want to publish the investigation to the public opinion, at least gather the families of the port victims and tell them how their sons were martyred.” 

 But those demands from Hassan Nasrallah did not resonate and the investigation results were kept secret. The current investigative judge Tariq Al-Bitar, as the former judge Fadi Sawan preceded him, followed up the part related to job negligence in the explosion without details of what preceded the shipment.

The first part, Job neglect, required a request to listen and investigate several parliamentarians, military commanders and general managers that caused split in Lebanon, accusing the judge of discretion in summoning and politicization. Still, the judge concentrated on ministers who held the position in the period between the ship’s arrival and the explosion.

He also chose the former Prime Minister Hassan Diab without summoning previous prime ministers who successively held the position during the presence of nitrates inside the port. These are questions and observations made by political parties and legal figures that Judge Bitar did not answer until now.

According to Rai Al-Youm sources, the investigation answers these questions regarding who brought the ship to Lebanon and for whom? The authorities talk about part of the investigations with broad headings without going into details.

The sources report that the shipment was paid for from a bank account based in an Arabian state in the Persian Gulf, with the main branch in Switzerland. The shipment was brought in by some figures in the Future Movement, without the knowledge of Saad Hariri.

The sources suggested that the nitrates were stored in the port and were due to transport into Syrian territory to benefit terrorist groups stationed on the Syrian-Lebanese border. At that time, some of the materials remained neglected in ward No. 12 in the port.

It appears that the ship, its owners, and the shipment route were included within the “black box” of the war in Syria, which was forbidden with strict international and regional support, not to disclose or publish facts of the Syrian conflict. Including the parties involved in it, how weapons and terrorists transferred, and their financing for that. 

 According to Rai Al-Youm, there is not a single evidence against Hezbollah in the investigations and that the accountability framework will be limited to those directly responsible for negligence. Information indicates that the judge was heading to close the file and issue the indictment, but the prosecution insisted on listening to former President Michel Suleiman, and former Prime Minister Tammam Salam, before giving the decision.

The investigation into the port explosion will likely reach a clear conclusion for public opinion and legal accountability, unlike other files that remain pending without conclusions.

 

Biden administration sanctions top Iranian military official

Biden administration on Friday sanctioned a top Iranian military official for his role in the July attack on an Israeli-managed commercial shipping vessel in the Gulf of Oman. In addition to that there was blacklisting a network of individuals and companies behind Iran’s Unmanned Aerial Vehicle (UAV) program. 

Iran’s drone program is a highly criticized aspect of its military support and operations in the Middle East against US forces and partners in the region. 

This includes actions in Syria, Iraq and Yemen; actions against Saudi and Israeli entities; and its reported use in Ethiopia’s brutal, yearlong civil war. 

“Iran’s proliferation of UAVs across the region threatens international peace and stability,” Deputy Treasury Secretary Wally Adeyemo said in a statement.

“Iran and its proxy militants have used UAVs to attack US forces, our partners, and international shipping. Treasury will continue to hold Iran accountable for its irresponsible and violent acts.”

The sanctions come days after US intelligence officials reportedly pointed to Iran as behind a drone attack on a military outpost in southern Syria where American forces reside, although no injuries were reported.  

Targeted individuals include Saeed Aghajani, Brigadier Beneral of Iran’s Islamic Revolutionary Guard Corps (IRGC), who oversees the military unit’s drone command and directs the planning, equipment and training of drone operations, the Treasury Department said in a statement. 

Aghajani is described as orchestrating a July 29 attack on the commercial shipping vessel Mercer Street off the coast of Oman, killing two Romanian crew members. The incident was condemned by the US, the United Kingdom, Romania and Israel. The Israeli management office was located in London. 

The Treasury Department further said that Aghajani was behind the planning of a 2019 attack against oil refineries in Saudi Arabia, which temporarily disrupted global oil markets and risked triggering a larger, regional confrontation. 

Other sanctioned individuals include IRGC Brigadier General Abdollah Mehrabi, Chief of the IRGC Aerospace Force Research and Self-Sufficiency Jihad Organization. The Oje Parvaz Mado Nafar Company, co-owned by Mehrabi, was also sanctioned along with its Managing Director, Yousef Aboutalebi.

The Treasury sanctioned the Kimia Part Sivan Company (KIPAS), an Iranian-based company that the US says has worked with the IRGC's elite Quds Force to improve its UAV program, and blacklisted Mohammad Ebrahim Zargar Tehrani for helping KIPAS source UAV components from companies based outside of Iran. 

The sanctions block any property or interests held in the US by the blacklisted individuals or companies, prohibit American transactions with those sanctioned and put international financial institutions on notice that they risk being blocked from the U.S. market if they engage with sanctioned entities. 

Iran is likely to take issue with the sanctions amid its deliberations to return to international talks to reinvigorate the Joint Comprehensive Plan of Action (JCPOA), the international nuclear agreement that former President Trump withdrew the United States from in 2018.

Iran has said it is likely to return to talks before the end of November. The sixth round of talks ended in April.

The intent of the JCPOA is to put strict limits on Iran's nuclear activities and subject it to intensive oversight, but critics of the agreement say it does little to curb Iran's other problematic behavior, such as its support for proxy fighting forces across the Middle East.

US foreign policy held hostage by Israel

Some might recall US Presidential candidate, Joe Biden’s pledge to work to rejoin the Joint Comprehensive Plan of Action (JCPOA) that was a multilateral agreement intended to limit Iran’s ability to develop a nuclear weapon.

The JCPOA was signed by President Barack Obama in 2015, when Biden was Vice President and was considered one of the only foreign policy successes of his eight years in office.

Other signatories to it were Britain, China, Germany, France, and Russia and it was endorsed by the United Nations. The agreement included unannounced inspections of Iranian nuclear facilities by the IAEA and, by all accounts, it was working and was a non-proliferation success story.

In return for its cooperation Iran was to receive its considerable assets frozen in banks in the United States and was also to be relieved of the sanctions that had been placed on it by Washington and other governments.

The JCPOA crashed and burned in 2018 when President Donald Trump ordered US withdrawal from the agreement, claiming that Iran was cheating and would surely move to develop a nuclear weapon as soon as the first phase of the agreement was completed.

Trump, whose ignorance on Iran and other international issues was profound, had surrounded himself with a totally Zionist foreign policy team, including members of his own family, and had bought fully into the arguments being made by Israel as well as by Israel Lobby predominantly Jewish groups to include the Foundation for Defense of Democracies (FDD) and the American Israel Public Affairs Committee (AIPAC).

Trump’s time in office was spent pandering to Israel in every conceivable way, to include recognizing Jerusalem as the country’s capital, granting Israel the green light for creating and expanding illegal settlements on the West Bank and recognizing the occupied Syrian Golan Heights as part of Israel.

Given Trump’s record, most particularly the senseless and against-American-interests abandonment of JCPOA, it almost seemed a breath of fresh air to hear Biden’s fractured English as he committed his administration to doing what he could to rejoin the other countries who were still trying to make the agreement work.

After Biden was actually elected, more or less, he and his Secretary of State Tony Blinken clarified what the US would seek to do to fix the agreement by making it stronger in some key areas that had not been part of the original document.

Iran for its part insisted that the agreement did not need any additional caveats and should be a return to the status quo ante, particularly when Blinken and his team made clear that they were thinking of a ban on Iranian ballistic missile development as well as negotiations to end Tehran’s alleged interference in the politics of the region.

The interference presumably referred to Iranian support of the Palestinians as well as its role in Syria and Yemen, all of which had earned the hostility of American friends Israel and Saudi Arabia.

Israel inevitably stirred the pot by sending a stream of senior officials, to include Foreign Minister Yair Lapid, Defense Minister Benny Gantz and Prime Minister Naftali Bennett to discuss the Iranian threat with Biden and his top officials. Lapid made clear that Israel reserves the right to act at any given moment, in any way… We know there are moments when nations must use force to protect the world from evil. And to be sure, Biden, like Trump, has also made his true sentiments clear by surrounding himself with Zionists. Blinken, Wendy Sherman and Victoria Nuland have filled the three top slots at State Department; all are Jewish and all strong on Israel.

Nuland is a leading neocon. And pending is the appointment of Barbara Leaf, who has been nominated Assistant Secretary to head the State Department’s Near East region. She is currently the Ruth and Sid Lapidus Fellow at the Washington Institute for Near East Policy (WINEP), which is an AIPAC spin off and a major component in the Israel Lobby. That means that a member in good standing of the Israel Lobby would serve as the State Department official overseeing American policy in the Middle East.

At the Pentagon one finds a malleable General Mark Milley, always happy to meet his Israeli counterparts, and Secretary of Defense Lloyd Austin, an affirmative action promotion who likewise has become adept at parroting the line “Israel has a right to defend itself.” And need one mention ardent self-declared Zionists at the top level of the Democratic Party, to include Biden himself, Speaker of the House Nancy Pelosi, House Majority Leader Steny Hoyer and, of course, Senate Majority Leader Chuck Schumer?

Rejoining the JCPOA over Israel objections was a non-starter from the beginning and was probably only mooted to make Trump look bad. Indirect talks including both Iran and the US technically have continued in Vienna, though they have been stalled since the end of June.

Trita Parsi has recently learned that Iran sought to make a breakthrough for an agreement by seeking a White House commitment to stick with the plan as long as Biden remains in office. Biden and Blinken refused and Blinken has recently confirmed that a new deal is unlikely, saying time is running out.

There have been some other new developments. Israeli officials have been warning for over twenty years that Iran is only one year away from having its own nukes and needs to be stopped, a claim that has begun to sound like a religious mantra repeated over and over, but now they are actually funding the armaments that will be needed to do the job.

Israeli Defense Force Chief of Staff Aviv Kohavi has repeatedly said the IDF is accelerating plans to strike Iran and Israeli politicians, including former Prime Minister Benjamin Netanyahu have regularly been threatening to do whatever must be done to deal with the threat from Iran. Israeli media is reporting that US$1.5 billion has been allocated in the current and upcoming budget to buy the American bunker buster bombs that will be needed to destroy the Iranian reactor at Bushehr and its underground research facilities at Natanz.

In the wake of the news about the war funding, there have also been reports that the Israeli Air Force is engaging in what is being described as intense drills to simulate attacking Iranian nuclear facilities.

After Israel obtains the 5000 pound bunker buster bombs, it will also need to procure bombers to drop the ordnance, and one suspects that the US Congress will come up with the necessary military aid to make that happen. Tony Blinken has also made clear that the Administration knows what Israel is planning and approves. He met with Israeli Foreign Minister Yair Lapid on October 13, 2021 and said if diplomacy with Iran fails, the US will turn to other options. He followed that up with the venerable line that Israel has the right to defend itself and we strongly support that proposition.

Lapid confirmed that one of Blinken’s options was military action. “I would like to start by repeating what the Secretary of State just said.  Yes, other options are going to be on the table if diplomacy fails. Eeverybody understands what does that mean. It must be observed that in their discussion of Iran’s nuclear program, Lapid and Blinnken were endorsing an illegal and unprovoked attack to prevent Iran from acquiring a nuclear weapon that it is apparently not seeking, but which it will surely turn to as a consequence if only to defend itself in the future.

In short, US foreign policy is yet again being held hostage by Israel. The White House position is clearly and absurdly that an Israeli attack on Iran, considered a war crime by most, is an act of self-defense. However it turns out, the US will be seen as endorsing the crime and will inevitably be implicated in it, undoubtedly resulting in yet another foreign policy disaster in the Middle East with nothing but grief. The simple truth is that Iran has neither threatened nor attacked Israel.

Given that, there is nothing defensive about the actions Israel has already taken in sabotaging Iranian facilities and assassinating scientists, and there would be nothing defensive about direct military attacks either with or without US assistance on Iranian soil. If Israel chooses to play the fool it is on them and their leaders. The United States does not have a horse in this race and should butt out, but one doubt if a White House and Congress, firmly controlled by Zionist forces, have either the wisdom or the courage to cut the tie that binds with the Jewish state.

 

Iran to return to talks in November

On October 27, 2021, Iran’s lead negotiator announced the return to nuclear talks with the world’s six major powers by the end of November this year. 

Ali Bagheri, the new Deputy Foreign Minister, tweeted the announcement after meeting in Brussels with Enrique Mora, the EU coordinator for the talks.

In response, White House press secretary Jen Psaki said that the Europeans and the US negotiators would determine next steps. “Our framing continues to be compliance for compliance,” she told reporters. 

A return to negotiations in Vienna, however, is no guarantee that the diplomatic process will resolve the deep differences between Tehran and Washington over both substance and sequencing.

On substance, Iran wants guarantees that the United States will never reimpose sanctions if it returns to compliance with the 2015 nuclear deal, while the Biden administration says it cannot guarantee what another president might do.

On sequencing, Iran wants the United States to lift sanctions before Tehran reverses breaches that began in 2019, after the Trump administration abandoned the deal and reimposed sanctions. 

The Biden administration has stipulated that both countries must simultaneously return to their commitments in the Joint Comprehensive Plan of Action (JCPOA).

From April to June 2021, Iran and the world’s six major powers held six rounds of talks on restoring the 2015 nuclear deal. Diplomacy stalled in June during Iran’s presidential campaign and the political transition as Ebrahim Raisi took office and appointed his cabinet in August. The two main issues in the talks are lifting US sanctions and reversing Iran’s nuclear program that can be addressed in the following three likely scenario.

Scenario 1

President Raisi's team agrees to a deal that is marginally better for Iran than the package that was on the table in June. Although they were close to their bottom lines, both sides probably still have some maneuvering space. If they are willing to compromise, this would be the least costly option. It would provide the Raisi administration with an early political win, which could be framed as their victory given that the hardliners now control all levers of power and dominate the country’s media. It would also constitute a much needed economic reprieve amid a confluence of crises that Iran is facing, ranging from economic stagnation and social unrest to the raging COVID-19 pandemic.

The Biden administration, which has had a major setback in Afghanistan, would benefit not just by defusing a simmering nuclear crisis, but also by potentially paving the ground for de-escalation in Iraq and in the Gulf. This would allow Washington to shift its focus to the larger challenge of great power competition with China and Russia. The parties could then try to achieve a better-for-better deal that is more satisfactory for both sides and thus more stable than the JCPOA.

Scenario 2

Raisi's team drives a hard bargain and makes maximalist demands that are unacceptable to the United States and European powers. This is the most likely outcome because the Iranian leadership seems to believe that time is on its side. Iran sees an advantage in the exponential growth of its nuclear program. It also views the US leverage from sanctions as past its peak and now at the point of diminishing returns. Iran also believes that the West has no appetite for military confrontation. This calculus is underpinned by an optimistic view on Iran’s ability to remain afloat as its economy has stabilized and oil exports to China hover around a million barrels per day. 

In this scenario, Iran would insist that the United States lift all the sanctions that were imposed and reimposed since 2017, provide the sanctions relief upfront and allow several months for Tehran to verify its effectiveness. Iran would also demand guarantees. It is not hard to predict what comes next.

In 2005, when Mahmoud Ahmadinejad came to power, Iran pursued a similar confrontational approach, which led to 10 years of mutual escalation in what can be called the race of sanctions against centrifuges. It was a lose-lose game for both sides and brought them to the brink of military confrontation.

Renegotiating the package that has been coming together in six rounds of talks is not going to shift Washington’s bottom lines or core demands, but it risks bringing down the JCPOA. This is primarily because there are pressure points on the timeline. The United States and European powers are increasingly concerned that Iran’s advances are approaching the point of irreversibility, making the existing agreement, even if fully restored, insufficient.

At the same time, Iran is in a standoff with the IAEA over access for its inspectors and outstanding issues with regards to Iran’s past nuclear activities. If these issues are not resolved before the end of 2021, another referral to the UN Security Council is almost certain.

Scenario 3

Raisi's team seeks to negotiate a new deal to replace the JCPOA. A consensus seems to have emerged among the Iranian hardliners, who now control all levers of power that the JCPOA was flawed from the beginning and that its restoration is futile as it will only produce the same outcome ‑ depriving Iran of its nuclear leverage with an empty promise of economic incentives, followed by a return of sanctions. This approach has a lot of appeal to those in Tehran and Washington who deem the JCPOA inadequate and seek a more advantageous agreement, JCPOA-Plus. 

Kayhan, the daily whose editor in chief is appointed by the Supreme Leader, recently wrote, “The JCPOA must change is the one issue upon which Iran and the US converge.” But the path to a new deal is likely to pass through a risky escalation. 

Iran might up the nuclear ante further, prompting the United States to impose more coercive measures, both looking for more leverage ahead of a return to talks. Iran, as it has already indicated in the six rounds of talks in Vienna, would want more sanctions relief, including from US primary sanctions. They were the main obstacle to the Iranian banking sector’s return to the US$-dominated global financial system after the United States lifted sanctions in 2016. Iran also wants compensation for damages incurred during the Trump administration’s “maximum pressure” campaign. 

The path to a JCPOA-Plus does not need to be so treacherous. One option to avoid the escalatory cycle would be to quickly strike an arrangement that amounts to a JCPOA-Minus. Iran could agree to freeze proliferation-sensitive activities, including uranium enrichment above 3.67 percent, advanced centrifuge work, and uranium metal production. In return, the Western powers could accept an agreed-upon level of oil exports and/or partial access to its frozen assets.

An interim arrangement could cap the immediate nuclear proliferation crisis, deliver economic reprieve for Iran, and buy time for the parties to negotiate parameters of a more-for-more JCPOA-Plus that addresses their broader demands. One pertinent question here is whether such an interim agreement would trigger the Iran Nuclear Agreement Review Act (INARA) of 2015 – a US law requiring any new deal with Iran to be subject to a congressional review, but a JCPOA-Minus is not a new deal, it is a waystation toward the original agreement.

Oil chiefs to testify at congressional hearing

Top executives at ExxonMobil and other oil giants are set to testify at a landmark House hearing today (Thursday) as congressional Democrats investigate what they describe as a decades-long, industry-wide campaign to spread disinformation about the role of fossil fuels in causing global warming.

Top officials at four major oil companies are testifying before the House Oversight Committee, along with leaders of the industry’s top lobbying group and the US Chamber of Commerce. Company officials were expected to renew their commitment to fighting climate change.

The much-anticipated hearing comes after months of public efforts by Democrats to obtain documents and other information on the oil industry’s role in stopping climate action over multiple decades. The appearance of the four oil executives — from ExxonMobil, Chevron, BP America and Shell — has drawn comparisons to a high-profile hearing in the 1990s with tobacco executives who famously testified that they didn’t believe nicotine was addictive.

 “The fossil fuel industry has had scientific evidence about the dangers of climate change since at least 1977. Yet for decades, the industry spread denial and doubt about the harm of its products — undermining the science and preventing meaningful action on climate change even as the global climate crisis became increasingly dire, ″ said Carolyn Maloney and Ro Khanna.

Maloney chairs the Oversight panel, while Khanna leads a subcommittee on the environment.

More recently, Exxon, Chevron and other companies have taken public stances in support of climate actions while privately working to block reforms, Maloney and Khanna charged. Oil companies frequently boast about their efforts to produce clean energy in advertisements and social media posts accompanied by sleek videos or pictures of wind turbines.

The industry “spends billions to promote climate disinformation through branding and lobbying″ that is increasingly outsourced to trade groups, “obscuring their own roles in disinformation efforts,” the lawmakers said.

Democrats have focused particular ire on Exxon, after a senior lobbyist for the company was caught in a secret video bragging that Exxon had fought climate science through “shadow groups” and had targeted influential senators in an effort to weaken President Joe Biden’s climate agenda, including a bipartisan infrastructure bill and a sweeping climate and social policy bill currently moving through Congress.

Keith McCoy, a former Washington-based lobbyist for Exxon, dismissed the company’s public expressions of support for a proposed carbon tax on fossil fuel emissions as a “talking point.”

McCoy’s comments were made public in June by the environmental group Greenpeace UK, which secretly recorded him and another lobbyist in Zoom interviews. McCoy no longer works for the company, an Exxon spokesperson said last month.

Darren Woods, Exxon’s chairman and chief executive, has condemned McCoy’s statements and said the company stands by its commitment to work on finding solutions to climate change.

Woods is among the chief executives set to testify Thursday, along with BP America CEO David Lawler, Chevron CEO Michael Wirth and Shell President Gretchen Watkins.

Casey Norton, an ExxonMobil spokesperson, said the company has cooperated with the Oversight panel, adding: “ExxonMobil has long acknowledged that climate change is real and poses serious risks.″

In addition to substantial investments in “next-generation technologies,” the company also advocates for responsible climate-related policies, Norton said.

“Our public statements about climate change are, and have been, truthful, fact-based, transparent and consistent with the views of the broader, mainstream scientific community at the time, ″ he said.

Maloney and Khanna compared tactics used by the oil industry to those long deployed by the tobacco industry to resist regulation “while selling products that kill hundreds of thousands of Americans.″

The oil industry’s “strategies of obfuscation and distraction span decades and still continue today,″ Khanna and Maloney said in calling the hearing last month. The five largest publicly traded oil and gas companies reportedly spent at least US$ one billion from 2015 to 2018 “to promote climate disinformation through ‘branding’ and lobbying,” the lawmakers said.

Bethany Aronhalt, a spokeswoman for API, said the group’s president, Mike Sommers, welcomes the opportunity to testify and “advance our priorities of pricing carbon, regulating methane and reliably producing American energy.”