Iranian leaders have markedly increased their oil exports, particularly to China and India over the past few months. Iran’s oil exports increased significantly after the interim nuclear deal. According to Iran’s semi-official news agency Press TV, Iran’s oil sales picked up from 1.06 million barrels per day (bpd) to 1.32 million bpd.
A confluence of interests brought Iranian leaders to a desperate political and economic position, and ultimately to the negotiating table for nuclear talks. The main concerns of the Ayatollahs were the economic sanctions and high inflation that endangered the hold on power of the ruling Iranian cleric.
The major question is: what is the Obama administration doing in response? Instead of setting any deals based on American or the international community’s terms, the Obama administration is setting the nuclear deals based on the interests of the Iranian leaders. This is followed by a release of billions of dollars and the lifting of sanctions.
More importantly, how have the Iranian leaders responded to these kind offers? These economic and political moves have emboldened and strengthened the geopolitical and economic status of the Ayatollahs.
A few weeks ago, in a secret arms deal, the Islamic Republic and the Iraqi Shiite-led government of Prime Minister Maliki signed an arms deal worth millions of dollars. The deal was recently revealed by Reuters news agency. Based on the recent report by Reuters, Tehran has signed a $195 million arms deal with the central Iraqi government. Accordingly, Iranian and Iraqi defense officials have signed eight agreements through which Iran will sell Baghdad arms, military communications equipment, ammunition for tanks artillery, mortars, and ammunition for U.S.-made M-12 assault rifles, among other weaponry.
First of all, it is worth noting that this arms deal is in violation of the United Nations embargo on weapons sales by Iran. But the Obama administration has not seriously reacted about this arms deal and is still continuing the nuclear talks to reach a final nuclear deal and remove all economic and political sanctions against Iran.
This arms deal is considered to be the first official arms agreement between the Shi’ite Iranian government and Iraq’s Shi’ite-led government of Maliki. This also shows the increasing military, geopolitical, strategic and economic relationship between Iran and Iraq since American troops withdrew from Iraq in December 2011, and since the United States started to lift sanctions on the Islamic Republic.
After the withdrawal of US troops from Iraq and after the sanctions reliefs, the Islamic Republic of Iran can be seen as the most influential foreign force in Iraq politically, economically, and militarily. Based on recent developments, Iran’s socio-political and socio-economic leverage and influence in post-Baathist and post-Saddam Iraq appears to be at its peak.
Economically speaking, The Trade Promotion Organization of Iran (TPOI) pointed out that 72% of Iran’s exports in 2013 went to Iraq. The report also revealed Iraq’s imported goods from Tehran have increased by approximately 15% last year.
During a six-month period in 2013, Iran exported $2.868 billion worth of good to Iraq, from Iran’s total exports of $17.972 billion (of non-oil commodities, including gas condensates). Considering non-oil goods, Iraq is now Iran’s second largest trade partner—only after China. Last week, Iraqi leaders pointed out that they are working with their counterparts in Tehran to boost oil exports in an attempt to triple oil production in Iraq to 9 million bpd by 2020. Iraq’s ambassador to Iran, Mohamed Majed Abas Al-Sheikh, recently announced that Baghdad has signed an arms agreement with its eastern neighbor, Iran, to purchase weapons and military equipment as part of a broader plan to boost Iraqi defense systems and armed forces.
Last week, after the sanction relief and the nuclear interim deal, reports revealed that the Islamic Republic of Iran stepped up it military support on the ground for the Syrian regime and President Bashar al-Assad. They are further providing elite teams and necessary equipment to gather intelligence and train Syrian governmental troops. Russia, alongside the Islamic Republic, is also stepping up its arms and ammunition deliveries to Assad to assist him in regaining power.
Assad’s regime is now benefiting economically, intelligence-wise, militarily and politically from Iran’s economic recovery and from its senior commanders in Iran’s Revolutionary Gaurds Corps (IRGC), Iran semi-militia groups of Basij and the elite Quds Force, which is considered to be the secretive and external arm of the robust IRGC.
The more the Obama administration eases economic sanctions on the Islamic Republic, flowing billions of dollars to the Ayatollahs and appeasing the Iranian regime, the more the Islamic Republic is emboldened, empowered, and strengthened to pursue its Islamist and regional hegemonic ambition. This will cause tremendous geopolitical, security, and economic backlash on the United States and other regional states such as Israel on a short and long term basis.
According to the Islamic Republic of Iran’s Customs Office, Iran hit a record high in exports with $37.36 billions worth of non-oil products exported during the course of the past eleven months— from March 21, 2013 to February 20, 2014.