For two weeks in May, the U.S. military shadowed two Iranian commercial boats sailing around the Persian Gulf as policy makers in Washington and Tehran traded threats and taunts. American surveillance kept constant watch on the two vessels after U.S. officials said they saw Iranian forces load missiles into launchers on their decks, according to U.S. officials. As tensions climbed, the Iranian ships eventually pulled into a harbor and unloaded the missiles that had set off alarms for the U.S. military.
The World Bank says Iran is likely to experience an even worse recession this year than previously thought, as U.S. sanctions largely choke off oil exports that have been Tehran's main revenue source. In its latest Global Economic Prospects report published Wednesday, the Washington-based institution that provides loans to countries said it expects Iran's Gross Domestic Product to shrink by 4.5% this year, a steeper contraction than its earlier estimate of negative 3.6% GDP growth for 2019.
Iran's supreme leader accused Saudi Arabia and other Arab countries of betraying the Palestinians by cooperating with the U.S. and Israel, in an attempt to rally regional supporters and raise the stakes for the Trump administration's long-awaited plan for peace in the Middle East. Ayatollah Ali Khamenei said Wednesday the Arab countries were committing "a big treason to the Islamic world" by supporting the U.S.'s so-called deal of the century.
NUCLEAR DEAL & NUCLEAR PROGRAM
A former deputy head of the UN's atomic watchdog said Wednesday that Iran is capable of producing a nuclear bomb in six to eight months. In an interview with Israel's Army Radio, Olli Heinonen said that Israel and the Gulf states "have a reason to worry." Heinonen said that despite assertions to the contrary by the current leadership of the UN's International Atomic Energy Agency, which he left in 2010, Tehran has not been adhering to the 2015 nuclear deal.
SANCTIONS, BUSINESS RISKS, & OTHER ECONOMIC NEWS
Oil is in the crosshairs as the prospect of confrontation brews between the U.S. and Iran. At least, that's how Iranian officials would have it. A top military aide to Iran's supreme leader Ayatollah Ali Khamenei, Yahya Rahim Safavi, warned over the weekend that "The first bullet fired in the Persian Gulf will push oil prices above $100." He added, "This would be unbearable to America, Europe and the U.S. allies like Japan and South Korea."
In an exclusive interview with Al-Monitor, Iraqi Minister of Electricity Luay al-Khatteeb talked about the situation of Iraq's electricity sector amid tense US-Iran relations. He discussed the waiver timeline that Washington granted Baghdad to keep buying Iranian gas and mentioned his fear that some parties are politicizing the electricity sector in Iraq. Iraqi Prime Minister Adel Abdul Mahdi's government voted Oct. 25, 2018 to appoint Khatteeb as minister of electricity.
In its latest outlook on the global economy the World Bank for the third consecutive time has revised downward its expectations for growth in the Iranian economy. WB's forecast in its Global Economic Prospects puts Iran at the bottom of its 2019 economic growth (Gross Domestic Product) country rankings, only ahead of Nicaragua. In mid-2018, WB had forecast a 4.1 percent growth for Iran in 2019, but only months later in January it revised the figure to a 3.6 percent negative growth and now it has reduced the number to minus 4.5 percent.
Given that the immediate focus of U.S. sanctions on Iran is the nation's oil sector, the Islamic Republic is concentrating on pushing its already significant petrochemicals capabilities to generate much-needed export revenues. Tehran also believes that foreign companies - particularly those in Europe - are much more likely to defy the U.S. in this sector than in the oil industry.
U.S.-IRAN RELATIONS & NEGOTIATIONS
A month after sending an aircraft carrier to the Middle East in reaction to intelligence the US claims it had showing Iran was preparing to attack US troops, military tensions appear to be easing, according to several US officials. "It seems tensions have dropped some, but we are still watching very closely, we haven't relaxed, we remain vigilant," one defense official with direct knowledge of the situation told CNN.
Japanese Prime Minister Shinzo Abe will visit Iran to ease rising tensions after President Donald Trump endorsed a mission where the premier would serve as an intermediary between leaders in Tehran and Washington. Chief Cabinet Secretary Yoshihide Suga did not give dates for the trip or further details of the visit at a briefing on Thursday, but Japanese media, including Kyodo News, said he would travel from June 12 to 14 and meet with Iran's leaders. The trip will be the first by a sitting Japanese prime minister to Iran in 41 years.
The US State Department has suspended funding for an organization whose hardline stance against the Iranian regime saw it targeting American journalists, activists and academics whom they didn't consider tough enough on Tehran, according to a State Department spokesperson. The Iran Disinformation Project claims it "exposes and counters the nefarious influence of one of the world's few remaining totalitarian regimes."
Iran's Supreme Leader Ayatollah Ali Khamenei says the US-devised roadmap for the Middle East conflict known as the "deal of the century" will lead nowhere, slamming Saudi Arabia and Bahrain as ground makers of "such an evil plot." Khamenei made the comments as part of his Eid al-Fitr sermon delivered to worshippers in the capital city of Tehran. He said the deal will never succeed, and he expressed gratitude toward Arab countries and Palestinian factions for standing up to it.
President Trump said Wednesday that there is "a chance" the U.S. military will take action against Iran, after a series of escalations between the two countries in recent weeks. Trump made the comments on "Good Morning Britain" to co-host Piers Morgan, who asked the president whether he was considering military action against Tehran. "There is always a chance. Do I want to? No, I'd rather not. But there's always a chance," Trump said. "I'd much rather talk," he added.
The recent White House decision to speed the deployment of an aircraft carrier battle group and other military assets to the Persian Gulf has led many in Washington and elsewhere to assume that the US is gearing up for war with Iran. As in the lead-up to the 2003 invasion of Iraq, US officials have cited suspect intelligence data to justify elaborate war preparations.
Donald Trump has told British officials he is not seeking a military confrontation with Iran and is instead aiming for direct talks with Tehran over his plan to negotiate and broaden the country's nuclear deal. Despite the assurances, British officials remain nervous the US president may have only 30 days before Iran takes irreversible steps to forgo the agreement. The assurance that Trump is not seeking war with Iran was made by US officials to British counterparts in talks surrounding the president's three-day state visit to the UK.
An unprecedented change of tone about U.S. President Donald Trump turned out to be the highlight of Iranian Supreme Leader Ayatollah Ali Khamenei's speech on the 30th anniversary of his predecessor's death on Tuesday June 4. Contrary to his usually derogatory remarks about Trump, Khamenei called him "The respectful President of the United States," while welcoming with a smile his recent remarks about Iran being able to progress with its current leaders.
Republican Congressman Adam Kinzinger warned on Wednesday that Iran would be defeated very quickly if it chose to challenge the U.S., making the comment after President Donald Trump told reporters "there's always a chance" of war with the Persian Gulf nation. Appearing for an interview on Fox News' America's Newsroom, Kinzinger, who represents Illinois and serves on the House Foreign Affairs Committee, said that Trump was right to take a hardline stance against Iran, arguing that Tehran was the ones that had provoked Washington.
IRANIAN INTERNAL DEVELOPMENTS
A fire broke out at a facility used for storing oil products at the Bandar Rajaee port on Iran's Gulf coast on Wednesday, the Islamic Republic News Agency (IRNA) reported. Firefighters were on the scene combating the blaze, which was accompanied by explosions, according to IRNA. IRNA did not provide any information on possible casualties. The fire started at a machine used to lift containers at the port and spread to an area used for storing oil products, IRNA reported.
IRANIAN REGIONAL AGGRESSION
Arab and Muslim leaders have just concluded a series of emergency summits in Mecca to discuss recent attacks on Saudi and Emirati territory which US officials have linked to Iran and its proxies. While both Riyadh and Abu Dhabi have repeatedly said they do not want war with Iran, they have strongly backed Washington's decision to impose sweeping sanctions on the Islamic Republic until Iran's leaders change their behavior.
CHINA & IRAN
Russian President Vladimir Putin on Wednesday hosted Chinese leader Xi Jinping for Kremlin talks that reflected increasingly close ties between the two countries that were communist rivals during the Cold War. At the conclusion of the meetings a joint statement by Russia and China voiced support for Iran and commended Iran's implementation of the requirements of the Joint Comprehensive plan of Action (JCPOA) or Iran's nuclear agreement with world powers, reported Russia's Interfax news agency.
RUSSIA, SYRIA, ISRAEL, HEZBOLLAH, LEBANON & IRAN
A high-ranking Syrian army commander was assassinated on Tuesday near the city of Sweida in the war-torn country's southwest, dozens of miles from the border with Israel. Brig. Gen. Jamal al-Ahmad was gunned down by unknown assailants while touring the sector, the intelligence blog Intelli Times and London-based pan-Arabic daily Asharq Al-Awsat both reported on Wednesday.
The German Bundestag is scheduled to debate a bill on Thursday to outlaw the radical Islamic organization Hezbollah in the federal republic. The far-right party Alternative for Germany (AfD) party introduced the bill.
GULF STATES, YEMEN, & IRAN
Iran's President Hassan Rouhani has stressed his country's willingness to strengthen relations with Qatar, and called regional tensions with Tehran "detrimental". In a phone call on Wednesday between Rouhani and Qatar's Emir Sheikh Tamim bin Hamad Al Thani, the two leaders exchanged Eid al-Fitr greetings.
OTHER FOREIGN AFFAIRS
Iranian Foreign Minister Mohammad Javad Zarif has recently kept busy with diplomatic visits to neighboring countries. On May 23, he arrived in Islamabad, his third trip to Pakistan since Prime Minister Imran Khan took office in August 2018, and held talks with Khan, army chief Qamar Bajwa, Speaker Asad Qaisar and his counterpart, Shah Mehmood Qureshi.