Russia, China Push for De-escalation in Middle East Tensions

Students walking in front of an anti-United States mural in the heart of the capital, Tehran (AFP)
Students walking in front of an anti-United States mural in the heart of the capital, Tehran (AFP)
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Russia, China Push for De-escalation in Middle East Tensions

Students walking in front of an anti-United States mural in the heart of the capital, Tehran (AFP)
Students walking in front of an anti-United States mural in the heart of the capital, Tehran (AFP)

Tensions are rising in the Middle East, with Russia urging measures to calm the situation and China warning against a “cycle of retaliation.”

In response to a drone attack in Jordan, the US vowed to defend its forces, despite stating it doesn’t seek war with Iran.

US Defense Secretary Lloyd Austin on Monday vowed the US would take “all necessary actions” to defend its troops after a deadly drone attack in Jordan by Iran-backed militants, even as President Joe Biden’s administration stressed it was not seeking a war with Iran.

the Kremlin, asked on Tuesday about potential US strikes on Iranian interests, said tensions in the Middle East were high and that steps were needed to de-escalate rather than destabilize the wider region.

“We do not welcome any actions that lead to destabilization in the region and increase tensions, especially against the backdrop of the excessive potential for conflict,” Kremlin spokesman Dmitry Peskov told reporters.

“We will not welcome the continuation of such actions, regardless of who they come from. The level of tension is high now and we need to take steps to de-escalate. This is what will prevent the conflict from spreading.”

Russia’s special representative to Syria, Alexander Lavrentiev, informed TASS that Moscow and Washington are currently not engaged in any dialogue regarding Syria.

Meanwhile, China on Tuesday warned against a “cycle of retaliation” in the Middle East after the US vowed to respond to the drone attack.

Beijing said it had “noted reports of casualties caused by the attack on a US military base.”

“We have also noted that Iran stated that it had nothing to do with the attack,” foreign ministry spokesperson Wang Wenbin said.

“We hope that all relevant parties will remain calm and restrained... in order to avoid falling into a vicious cycle of retaliation and prevent further escalation of regional tension,” he added.

“The situation in the Middle East is currently highly complex and sensitive,” Wang said.

London Calls for De-escalation

UK Defense Minister Grant Shapps urged Iran to use its influence on militias, including the Houthi rebels in Yemen, to de-escalate tensions in the region.

In a post on “X,” Shapps affirmed that London and Washington are in continued collaboration to enhance stability in the Middle East.

British Prime Minister Rishi Sunak also strongly condemned drone attacks linked to Iran-affiliated groups.

Sunak expressed concern and pledged to urge Iran to seek de-escalation in the region, emphasizing strong support for allies in achieving stability and peace.

It’s worth noting that in response to recent attacks in Syria and Iraq, Washington conducted a series of strikes in Iraq targeting Iran-backed groups.

Protest and Political Resolution Call

In Tehran, the Iranian Foreign Ministry strongly protested London’s accusations by summoning the British ambassador.

The ministry did not specify the reason for the protest.

During the meeting, an Iranian official rejected the baseless accusations by British authorities, condemning their sabotage activities, as reported by IRNA.

This comes after London and Washington imposed sanctions on an Iranian network, accusing it of ties to the Tehran government and targeting dissident journalists.

The Iranian official informed the British ambassador that such sanctions are “illegitimate.”

The Iranian Foreign Ministry criticized NATO Secretary-General Jens Stoltenberg’s remarks about “Iran's role in the region,” calling them baseless and akin to bitter humor.

Iran asserted that it adheres to a consistent policy of enhancing relations with neighbors while opposing foreign interference.

On his part, former Foreign Minister Mohammad Javad Zarif called for an Iranian role in supporting the resistance amid the complexities of the upcoming US presidential elections.

While avoiding direct comments on the killing of US soldiers, Zarif mentioned ongoing diplomatic efforts for a political solution in Gaza and its regional consequences.

“The possibility that Biden will order direct attacks on Iranian targets cannot be ignored,” political analyst Ahmad Zeidabadi wrote in the Ham-Mihan newspaper.

But he said any US attacks would more likely target “the bases of Iranian forces in other countries.”

The reformist Etemaad Daily newspaper also said it was “possible” the Biden administration — under political pressure from the Republicans — “will target limited but strategic targets inside Iran.”

“This scenario may spell the end of diplomatic efforts between Tehran and Washington,” it said.

Iran’s Foreign Minister Hossein Amir-Abdollahian said Tuesday the solution to the crisis must be “political” and wrote on X that “diplomacy is active in this direction.”



Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports

Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
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Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports

Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH

Iran's Revolutionary Guards have tightened their grip on the country's oil industry and control up to half the exports that generate most of Tehran's revenue and fund its proxies across the Middle East, according to Western officials, security sources and Iranian insiders.

All aspects of the oil business have come under the growing influence of the Guards, from the shadow fleet of tankers that secretively ship sanctioned crude, to logistics and the front companies selling the oil, mostly to China, according to more than a dozen people interviewed by Reuters.
The extent of the Iranian Revolutionary Guard Corps' (IRGC) control over oil exports has not previously been reported.

Despite tough Western sanctions designed to choke Iran's energy industry, reimposed by former US President Donald Trump in 2018, Iran generates more than $50 billion a year in oil revenue, by far its largest source of foreign currency and its principal connection to the global economy.

Six specialists - Western officials and security experts as well as Iranian and trading sources - said the Guards control up to 50% of Iran's oil exports, a sharp increase from about 20% three years ago. The sources declined to be identified due to the sensitivity of the matter.

Three of the estimates were based on intelligence documents about Iranian shipping while others derived their figures from monitoring shipping activity by tankers and companies linked to the IRGC. Reuters was unable to determine the exact extent of the IRGC's control.

The IRGC's growing domination of the oil industry adds to its influence in all areas of Iran's economy and also makes it harder for Western sanctions to hit home - given the Guards are already designated as a terrorist organization by Washington.

Trump's return to the White House in January, however, could mean tougher enforcement of sanctions on Iran's oil industry. The country's oil minister said Tehran is putting measures in place to deal with any restrictions, without giving details.

As part of their expansion in the industry, the Guards have muscled in on the territory of state institutions such as the National Iranian Oil Company (NIOC) and its NICO oil trading subsidiary, according to four of the sources.

When sanctions hit Iran's oil exports years ago, the people running NIOC and the wider industry were specialized in oil rather than how to evade sanctions, added Richard Nephew, a former deputy special envoy for Iran at the US State Department.

"The IRGC guys were much, much better at smuggling, just terrible at oil field management, so they began to get a larger control of oil exports," said Nephew, who is now a researcher at Columbia University.
The IRGC, NIOC, NICO and Iran's foreign ministry did not respond to requests for comment.
RISK APPETITE
The IRGC is a powerful political, military and economic force with close ties to Supreme Leader Ali Khamenei.
The Guards exert influence in the Middle East through their overseas operations arm, the Quds Force, by providing money, weapons, technology and training to allies Hezbollah in Lebanon, Hamas in Gaza, Yemen's Houthis and militias in Iraq.
While Israel has killed a number of senior IRGC commanders over the past year, the oil specialists in its ranks have been able to continue their operations, two Western and two Iranian sources said.
The Iranian government began allotting oil, instead of cash, to the IRGC and Quds Force around 2013, according to Nephew.
The government was under budgetary pressure then because it was struggling to export oil due to Western sanctions imposed over Iran's nuclear program.
The IRGC proved adept at finding ways to sell oil even under sanctions pressure, said Nephew, who was actively involved in tracking Iranian oil activities then.
Iranian oil revenues hit $53 billion in 2023 compared with $54 billion in 2022, $37 billion in 2021 and $16 billion in 2020, according to estimates from the US government's Energy Information Administration.
This year, Tehran's oil output has topped 3.3 million barrels per day, the highest since 2018, according to OPEC figures, despite the Western sanctions.
China is Iran's biggest buyer of oil, with most going to independent refineries, and the IRGC has created front companies to facilitate trade with buyers there, all the sources said.
Oil export revenues are split roughly evenly between the IRGC and NICO, said one source involved in Iranian oil sales to China. The IRGC sells oil at a $1-$2 barrel discount to prices offered by NICO because buyers take a bigger risk buying from the Guards, the person said.
"It depends on a buyer's risk appetite, the higher ones will go for the IRGC, which the US designates as a terrorist group."
Two Western sources estimated that the IRGC offered an even bigger discount, saying it was $5 per barrel on average but could be as much as $8.
The oil is allocated directly by the government to the IRGC and Quds Force. It's then up to them to market and ship the oil - and work out a mechanism for disbursing the revenue, according to the sources and intelligence documents seen by Reuters.
NIOC gets a separate allocation.
CHINESE FRONT
One of the front companies used is China-based Haokun. Operated by former Chinese military officials, it remains an active conduit for IRGC oil sales into China, despite Washington hitting it with sanctions in 2022, two of the sources said.
The US Treasury said China Haokun Energy had bought millions of barrels of oil from the IRGC-Quds Force and was sanctioned for having "materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF".
In one oil transaction dated March 16, 2021 involving Haokun and parties including Turkish company Baslam Nakliyat - which is under US sanctions for its trading links to the IRGC - a payment was processed via US bank JP Morgan and Turkish lender Vakif Katilim, according to the intelligence documents.
The transaction took place before the companies were sanctioned. Reuters has no indication JP Morgan or Vakif Katilim were aware of the Iranian connection - highlighting the risks of companies getting inadvertently caught up in the shadow trade.
JP Morgan declined to comment. Vakif Katilim said in a statement: "Our bank performs its activities within the framework of national and international banking rules."
Haokun declined to comment. Baslam did not respond to a request for comment.
'GHOST FLEET'
Quds Force commander Qassem Soleimani, who was killed in a US strike in Baghdad in 2020, had set up a clandestine headquarters and inaugurated that year for the unit's oil smuggling activities, initially staffed by former oil minister Rostam Ghasemi, according to the intelligence documents.
Reuters could not determine where all the oil money funneled through the IRGC goes. The IRGC headquarters and day-to-day operations has an annual budget of around $1 billion, according to assessments from two security sources tracking IRGC activities.
They estimated that the IRGC budget for Hezbollah was another $700 million a year.
"Exact figures remain undisclosed, as Hezbollah conceals the funds it receives. However, estimates are that its annual budget is approximately $700 million to $1 billion. Around 70%-80% of this funding comes directly from Iran," Shlomit Wagman, former director general of Israel’s Money Laundering and Terrorism Financing Prohibition Authority, said separately.
Hezbollah did not respond to a request for comment.
The former Secretary General of Hezbollah, Hassan Nasrallah, who was killed in an Israeli airstrike, said Iran provided the group's budget, including for salaries and weapons.
Iran's main tanker operator NITC, which previously played a key role in exports, also now provides services to the IRGC.
It executes ship-to-ship transfers of Iranian oil onto vessels operated by the IRGC to ship crude into China, according to sources and ship-tracking data. Such transfers are common practice to help disguise the origin of the oil tankers carry.
NITC did not respond to a request for comment.
In August, Israel's National Bureau for Counter Terror Financing, part of the country's defense ministry, imposed sanctions on 18 tankers it said were involved in transporting oil belonging to the Quds Force.
In October, the US Treasury slapped sanctions on 17 separate tankers it said formed part of Iran's "ghost fleet", outside of NITC vessels. It followed up with sanctions on a further 18 tankers on Dec. 3.