Tense Times Ahead for Lebanon after Elections

People walk along the Mediterranean sea waterfront in Lebanon's capital Beirut on May 15, 2022. (AFP)
People walk along the Mediterranean sea waterfront in Lebanon's capital Beirut on May 15, 2022. (AFP)
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Tense Times Ahead for Lebanon after Elections

People walk along the Mediterranean sea waterfront in Lebanon's capital Beirut on May 15, 2022. (AFP)
People walk along the Mediterranean sea waterfront in Lebanon's capital Beirut on May 15, 2022. (AFP)

Hezbollah's opponents might rejoice at their loss of majority in parliament but Lebanon's packed political calendar now sets the stage for protracted deadlocks at best or violence at worst.

Sunday's polls passed without any major incident, in itself an achievement in a country which has a history of political violence and is suffering its worst crisis since the 1975-1990 civil war.

Iran-backed Hezbollah is described by its supporters a bulwark against enemy Israel and by its detractors as a state within a state whose continued existence prevents any kind of democratic change in Lebanon.

Hezbollah and its allies lost the clear majority they had in the outgoing parliament, despite a flurry of televised addresses by the party's leader Hassan Nasrallah in the week running up to the vote.

The biggest winners were the Christian Lebanese Forces party and new faces born of a 2019 secular protest movement, all of whom have a clear stance against Hezbollah.

"Old guard parties will seek to assert their political dominance in the face of the reformists who have entered parliament for the first time," said analyst Lina Khatib, head of the Middle East and North Africa Program at Chatham House.

Speaker election
As of May 22, after the current assembly's mandate expires, the new lawmakers will have 15 days to pick a speaker, a position Nabih Berri has held since 1992 and is not intent on leaving despite reaching the age of 84.

By convention, Lebanon's prime minister position is reserved for a Sunni, the presidency goes to a Maronite Christian and the post of speaker to a Shiite.

Berri is a deeply polarizing figure but all Shiite seats in parliament were won by Hezbollah and the veteran speaker's own Amal party, which rules out the emergence of a consensual candidacy.

The election will be a first test of how willing Hezbollah's opponents are to challenge the Shiite tandem.

MP Mohammed Raad, the leader of Hezbollah's parliamentary bloc, set the tone as early as Monday when he warned rivals against becoming "shields for the Israelis".

His words were a reply to Samir Geagea, whose Lebanese Forces have championed the case for disarming Hezbollah, and had laid down the gauntlet by vowing never to support Berri's re-election or join a unity government.

The new polarization of Lebanese politics raises fears of a repeat of deadly violence that broke out in Beirut last year between Hezbollah-aligned fighters and FL supporters.

The L'Orient-Le Jour daily stressed in an analysis that Hezbollah's parliament majority in recent years had enabled it "not to resort to terror to impose its decisions and preserve its red lines".

Government formation
"The risk of a total stalemate is real, deadlocks are a Lebanese specialty," said Daniel Meier, a France-based researcher.

In Lebanon's unique and chaotic brand of sectarian consensus politics, forming a government can take months, even when the country faces multiple emergencies.

Between the two latest elections, two out of four years were spent under a caretaker government with limited powers as the country's political barons haggled over cabinet line-ups.

The latest government, led by billionaire Najib Mikati, has only been in place since September 2021 after a 13-month vacuum.

It was billed a mostly technocratic government tasked with guiding Lebanon to recovery, but each minister was endorsed by one of Lebanon's perennial heavyweights.

Whether any of the 13 MPs labelled as representing the interests of the 2019 anti-establishment uprising would consider joining a coalition government with that same establishment is doubtful.

"There is change in the balance of power but this will not translate in a program for change because despite everything Hezbollah keeps its veto power," analyst Sami Nader said.

A quick fix would be to keep the Mikati government in a caretaker capacity until the presidential election.

Presidential election
That is the last but not the least of the major hurdles in the institutional calendar.

Due by the end of the year, the new parliament's pick for a president to succeed Michel Aoun, who will be 89 by then, was further complicated by the latest election.

He groomed his son-in-law Gebran Bassil for years but the electoral surge of the Lebanese Forces, the rivals of Aoun's Free Patriotic Movement, is a spanner in the family works.

Army chief Joseph Aoun has already been tipped as an alternative but talks could drag on.

"Probably we will have a long period of stalemate in the parliament," said Joseph Bahout, a professor at the American University of Beirut.

He predicted a tunnel of institutional deadlocks could delay reforms requested by the International Monetary Fund for a critically needed rescue package until the spring of 2023.



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.