Iran Scrambles to Swiftly Build Ties with Syria’s New Rulers

A handout photo made available by the Iranian presidential office shows Iranian President Masoud Pezeshkian (R) and Foreign Minister Abbas Araghchi (L) during the opening session of the Organization of Eight Developing Countries (D-8) summit in Cairo, Egypt, 19 December 2024. (EPA/Handout)
A handout photo made available by the Iranian presidential office shows Iranian President Masoud Pezeshkian (R) and Foreign Minister Abbas Araghchi (L) during the opening session of the Organization of Eight Developing Countries (D-8) summit in Cairo, Egypt, 19 December 2024. (EPA/Handout)
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Iran Scrambles to Swiftly Build Ties with Syria’s New Rulers

A handout photo made available by the Iranian presidential office shows Iranian President Masoud Pezeshkian (R) and Foreign Minister Abbas Araghchi (L) during the opening session of the Organization of Eight Developing Countries (D-8) summit in Cairo, Egypt, 19 December 2024. (EPA/Handout)
A handout photo made available by the Iranian presidential office shows Iranian President Masoud Pezeshkian (R) and Foreign Minister Abbas Araghchi (L) during the opening session of the Organization of Eight Developing Countries (D-8) summit in Cairo, Egypt, 19 December 2024. (EPA/Handout)

The Iranian government is scrambling to restore some of its influence in Syria as it still reels from the shock ouster of its close ally President Bashar al-Assad on December 8.

The Iranian president, Masoud Pezeshkian, is already facing multiple domestic and international crises, including an economy in shambles and continued tensions over its nuclear program. But it is the sudden loss of influence in Syria after the fall of Assad to opposition groups that is exercising Iranian officials most, reported The Guardian on Friday.

“In the short term they want to salvage some influence with the opposition in Damascus. Iranian diplomats insist they were not wedded to Assad, and were disillusioned with his refusal to compromise,” it said.

Foreign Minister Abbas Araghchi said in an interview this week: “We had long ago reached the conclusion that the continuation of governance in Syria would face a fundamental challenge. Government officials were expected to show flexibility towards allowing the opposition to participate in power, but this did not happen.”

He added: “Tehran always had direct contacts with the Syrian opposition delegation. Since 2011, we have been suggesting to Syria the need to begin political talks with those opposition groups that were not affiliated with terrorism.”

At the same time, Iran’s foreign ministry spokesperson insisted it only entered Syria in 2012 at Assad’s request to help defeat ISIS, continued The Guardian. “Our presence was advisory and we were never in Syria to defend a specific group or individual. What was important to us was helping to preserve the territorial integrity and stability of Syria,” he said.

Such explanations have not cut much ice in Damascus. Iran remains one of the few countries criticized by Ahmed al-Sharaa, the Hayat Tahrir al-Sham (HTS) leader.

Short honeymoon

Many Iranian officials are claiming the current victory lap being enjoyed by Türkiye in Syria may be brief as Ankara’s interests will start to diverge from the government led by the HTS.

Senior cleric Naser Makarem Shirazi said: “We must follow the Syrian issue with hope and know that this situation will not continue, because the current rulers of Syria will not remain united with each other”.

The conservative Javan newspaper predicted that “the current honeymoon period in Syria will end due to the diversity of groups, economic problems, the lack of security and diversity of actors.”.

Officially Iran blames the US and Israel for Assad’s collapse, but resentment at Ankara’s role is rife, ironically echoing Donald Trump’s claim that Syria has been the victim of an unfriendly takeover by Türkiye.

In his speech responding to Assad’s downfall supreme leader Ali Khamenei said a neighboring state of Syria played a clear role” in shaping events and “continues to do so now”. The Fars news agency published a poster showing the HTS leader in league with Recep Tayyip Erdogan, Benjamin Netanyahu and Joe Biden.

Iran’s Strategic Council on Foreign Relations questioned whether HTS would remain allies with Türkiye for long. It said: “Although Türkiye is only one of the main winners of Bashar al-Assad’s fall from power in the short term, Ankara can never bring a government aligned with itself to power in Syria. Even if HTS attempts to form a stable government in Syria, which is impossible, in the medium term, it will become a major threat to Türkiye, which shares an 830-kilometer border with Syria.”

Reliance on Türkiye

Former Iranian President Hassan Rouhani predicted a bleak future for Syria and Türkiye. “In recent weeks, all of Syria’s military power has been destroyed by Israel, and unfortunately, the militants and Türkiye did not respond appropriately to Israel. It will take years to rebuild the Syrian army and armed forces.”

Mohsen Baharvand, a former Iranian ambassador to the UK, suggested the Damascus government may find itself overly reliant on Türkiye. “If the central government of Syria tries to consolidate its authority and sovereignty through military intervention and assistance from foreign countries – including Türkiye – Syria, or key parts of it, will be occupied by Türkiye, and Türkiye will enter a quagmire from which it will incur heavy human and economic costs.”

He predicted tensions between Türkiye and the HTS in particular about how to handle the Syrian Kurdish demand in north-east Syria for a form of autonomy. The Turkish-funded Syrian National Army is reportedly ready to mount an offensive against the Kurdish Syrian Democratic Forces in Kobani, a Kurdish-majority Syrian town on the northern border with Türkiye.

Türkiye’s Foreign Minister Hakan Fidan said on Wednesday that if the issue were addressed “properly” Ankara would not seek a military intervention. “There is a new administration in Damascus now. I think this is primarily their concern now,” Fidan said.

More broadly, the Syrian reverse is forcing Iran to accelerate a rethink of its foreign policy. The review centers on whether the weakening of its so-called Axis of Resistance – comprising allied groups in the region – requires Iran to become a nuclear weapon state, or instead strengthen Iran by building better relations in the region.

For years, Iran’s rulers have been saying that “defending Iran must begin from outside its borders.” This hugely costly strategy is largely obsolete, and how Iran explains its Syria reverse will be critical to deciding what replaces that strategy.



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.