Baghdad After Damascus: Questions About the Day After

 
US helicopters accompany Secretary Antony Blinken as he heads to the US Embassy in Baghdad on December 13, 2024 (Reuters)
US helicopters accompany Secretary Antony Blinken as he heads to the US Embassy in Baghdad on December 13, 2024 (Reuters)
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Baghdad After Damascus: Questions About the Day After

 
US helicopters accompany Secretary Antony Blinken as he heads to the US Embassy in Baghdad on December 13, 2024 (Reuters)
US helicopters accompany Secretary Antony Blinken as he heads to the US Embassy in Baghdad on December 13, 2024 (Reuters)

On November 24, 2024, the Islamic Resistance in Iraq claimed what seemed to be its final attack on Israel. The announcement came two weeks after Syrian President Bashar al-Assad fled to Russia, with armed groups declaring “Syria is free.”

The claim, shared on a Telegram channel, marked the end of the “Axis of Resistance” operations before a ceasefire took effect in Lebanon.

On November 27, 2024, Syrian factions advanced in western Aleppo, sparking political alarm in Baghdad.

Rumors spread that “Baghdad could be the next target” after Assad fled to Russia, prompting increased diplomatic talks with Western and Arab capitals.

Iraqi forces have mobilized along the Syrian border, citing concerns over the infiltration of “armed elements” and fears of a broader collapse.

This buildup began earlier, during the Syrian factions’ rapid advance toward Damascus in just 10 days.

Since November 27, Iraqi army and Popular Mobilization Forces (PMF) leaders have visited the border more than six times, the latest on December 13, 2024.

Iraq faces uncertainty after the fall of Assad, Iran’s retreat, and the decline of Hezbollah’s power. Key questions now center on the “new rulers” in Damascus, the “future of Iranian influence,” and the “direction of Iraq’s political process.”

The urgency of these issues grew after UN envoy Mohammed Al-Hassan met with Grand Ayatollah Ali al-Sistani in Najaf on December 12, 2024.

“I briefed Sayyed al-Sistani on recent UN discussions about Iraq,” Al-Hassan said.

“The region is changing rapidly, and Iraq needs bold, urgent decisions. We urge leaders to act quickly and take overdue steps toward reconciliation and unity,” he added.

Asharq Al-Awsat spoke to representatives of six Iraqi parties about Al-Hassan's remarks.

Many speculated about a “collapse of the political system” or a return to pre-2003 Iraq, with most concerns coming from traditional Shiite parties.

Recent events have revolved around Prime Minister Mohammed Shia Al-Sudani. On December 10, 2024, US CENTCOM chief Gen. Michael Kurilla met Kurdish SDF officials in Syria before heading to Baghdad to meet Sudani, who reaffirmed Iraq’s position on “respecting the Syrian people’s choices.”

The following day, Sudani visited Jordan to meet King Abdullah II, who later traveled to Abu Dhabi to meet UAE President Sheikh Mohammed bin Zayed. Sudani returned to Baghdad, received a call from Saudi Crown Prince Mohammed bin Salman, and met with a US delegation. Meanwhile, Germany’s defense minister visited Baghdad and Erbil.

Talks across the region have focused on “securing borders” with Syria. International discussions, involving US President Joe Biden and other Western officials, highlight a global push to bolster security in Syria’s neighboring states.

Despite these efforts, Shiite leaders in Baghdad remain unclear on Iraq’s future or how to handle mounting regional pressures.

A former government advisor described Iraq’s current situation as the most fragile in years, with Syria’s shifting dynamics raising serious questions for Iraq’s political stability.

Iraq Faces Rising Tensions After Assad’s Fall

Mutual fears are growing across the Iraq-Syria border. In Syria, concerns focus on Iraqi groups alarmed by the new regime, while in Iraq, fears center on potential unrest at the Sayyida Zainab shrine in Damascus, which could destabilize the region.

A senior Shiite figure told Asharq Al-Awsat that Assad had granted Iran full security control over the shrine, but this arrangement ended with his departure.

“Now, everyone is afraid,” the source said, though international assurances suggest Damascus will not unravel as quickly as Assad’s fall.

Since Assad fled to Moscow, Iraqi Shiite communities have voiced concerns over the safety of Shiite shrines in Syria, amplified by a flood of social media posts. However, Iraqi diplomats have engaged regional powers to prevent escalation, warning that even a minor misstep could ignite conflict.

Inside Iraq, fears are mounting among Shiite leaders about losing control over factions or being outmaneuvered by Sunni and Kurdish rivals. These groups might exploit Iran’s retreat, seen by some as a "tactical withdrawal," to shift Iraq’s political balance.

Shiite politicians also worry the Iraqi premier could distance himself from Iran-aligned factions and pursue a new political deal, using “protecting Baghdad” as his justification.

“Sudani holds a strong card,” one political adviser noted.

Publicly, Shiite leaders focus on warnings about Syria’s “extremist rule” and the risk of militants crossing into Iraq. Privately, they remain unsettled about Iraq’s next steps as regional dynamics shift.

Recent developments underscore these tensions. Sudani reportedly sent a message to Syrian authorities, pledging non-interference while seeking assurances about the safety of Shiite communities.

Iraq’s stance toward Syria shifted after airstrikes hit convoys carrying Shiite fighters and Syria’s army collapsed. These events freed Sudani from earlier obligations to Iran-backed factions, allowing him to adopt a more flexible position.

Iraq's Political Crossroads: Regional Pressures and US Strategy

A Western diplomat in Baghdad, who spoke anonymously, said that “stability in Iraq is now a top priority for the international community,” but regional pressures are pushing to dismantle the militias that have fueled instability.

This comes as political discussions focus on a question raised by many: Is the fall of regimes in the Resistance Axis moving toward Iraq? Some consider it an unlikely scenario without solid evidence.

An Iraqi politician, who claimed insight into US-Iraq talks, suggested that the US has engaged Israel, which wants to “finish the job of removing the Resistance Axis, with Iraq as the last standing member.”

The theory suggests that Israel sees Baghdad as “Iran's most important asset,” and Tehran might use Iraq’s resources to revive the collapsing axis, meaning the crisis won’t end with Assad.

To counter Israel’s objectives, the US reportedly proposed an “alternative plan” with similar goals.

An Iraqi adviser explained that the new approach involves disarming militias, integrating the PMF into the state, and removing militia offices from Sunni areas.

This adviser also said that the US wants to hold new elections in Iraq and believes “Iran will have to accept this new reality.”

However, figures from Iraq’s Coordination Framework dismissed this as “fantasy,” although they acknowledge that messages reaching Baghdad indicate that “cutting Iraq’s ties to Iran is now seen as essential.”

Sidelining entrenched groups in Iraq’s government is difficult, and some believe this could only be achieved through negotiations with Iran.

A political adviser noted, “It’s hard to remove Iranian influence so easily. They are involved in ongoing discussions in the region, and if Iraq’s political situation changes, Iran will be a part of it.”

The Middle East’s Shifting Landscape and Sudani’s Challenge

In political circles, a simple question is being raised: “Why should Baghdad be targeted when it stayed out of the support war and didn’t intervene to prevent Assad’s fall?” This reflects a desire to avoid the consequences of the post-conflict situation.

But this is not the regional reality. A series of events suggests that Iraq must change to avoid difficult choices ahead.

A Western diplomat told Asharq Al-Awsat, “The region has changed... it’s clear that the dynamics have shifted, and players must adapt.”

For the first time since 2003, excluding the threat from ISIS in 2014, Iraq’s Shiite forces face mounting pressures, forcing them to decide how to adapt politically.

During his visit to Baghdad on December 13, US Secretary of State Antony Blinken didn't wear a bulletproof vest, unlike his November 2023 trip, symbolizing a more relaxed approach.

He joked with Sudani, saying, “It’s wonderful to fly in from the airport and see the vitality of the city.”

However, Blinken’s reassuring words—calling it the right moment for Iraq to strengthen its sovereignty—are met with skepticism in Iraq.

Officials fear these may be just the comments of a diplomat in his final month, with a Republican administration likely to take a harder line on Iran, and Iraq possibly being the last target of “maximum pressure.”

Iraqi politicians are convinced that “something will happen,” but opinions differ on what that might be. There's speculation about a possible Israeli strike, or if Washington plans to protect Iraq through a new deal aimed at limiting Iranian influence.

Sudani’s aides downplay the likelihood of military strikes but hint at necessary political changes, which could soften the impact of a future US administration under Donald Trump.

However, these changes could create risks, as Sudani’s opponents in both Baghdad and Tehran fear unforeseen consequences.



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.