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The dangerous precedent set by Tehran's recent international deals

When discussing the recent deal between Tehran and Washington to release five American prisoners in exchange for Iran gaining access to $6 billion in seized assets in South Korea, Iranian officials use a specific key phrase: "honorable diplomacy."

On Aug. 16, Iranian President Ebrahim Raisi described the release of frozen oil revenues for humanitarian purposes as a product of "honorable diplomacy" as opposed to "begging diplomacy,” while Foreign Minister Hossein Amir-Abdollahian called it a facet of achieving "honorable diplomacy as emphasized by the Supreme Leader." Earlier, government spokesman Ali Bahadri Jahormi said that it proved that Tehran’s "honorable diplomacy" could secure its financial resources abroad without joining the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.

The concept of "honorable diplomacy" has its origins in the political discourse of Ayatollah Ali Khamenei, the leader of the Islamic Republic. In his most recent meeting with Foreign Ministry officials and Iranian ambassadors, Khamenei established "honor" as a cornerstone of the government's foreign policy, urging Iranian authorities to avoid "begging diplomacy "and to disregard the "words and actions of officials from other countries."

In other words, according to Iranian officials, "honorable diplomacy" means dealing with America and Europe from a position of strength, while "begging diplomacy "refers to efforts to defuse tensions with Western counterparts. Iranian authorities claim that, even after the brutal suppression of the 2022 protests, they have successfully used their leverage with foreign adversaries to win unexpected concessions — a claim that, while potentially exaggerated, points to an unprecedented series of developments in recent months.

Economic gains

Iranian sources emphasize that the recent agreement granting Tehran access to its $6 billion in blocked assets in South Korea is only one part of a broader deal. As the state-owned Iranian Students’ News Agency (ISNA) claimed on Aug. 12, Iran will also gain access to an additional €6 billion of frozen assets in Iraq.

This comes at a time when Iran's foreign exchange earnings have increased significantly over the past year — a development that, logically, wouldn't have occurred if the U.S. had maintained a rigid stance on Iranian sanctions.

According to statistics from the Central Bank of Iran, the value of the country's exported goods in the Iranian year 1401 (March 2022 to March 2023) exceeded$97.6 billion. During the same period, Iran exported oil and petroleum products worth $55.4 billion and non-oil goods worth $42.2 billion. These figures are consistent with OPEC's latest annual report, which estimates Iran's crude oil exports for 2022 at around $42.6 billion — a staggering 67% increase from 2021. Much of this increase can be attributed to the spike in global oil prices following Russia's full-scale invasion of Ukraine, coupled with a 17% rise in Iran's oil and oil product exports.

Kpler, a commodities intelligence firm specializing in oil tankers, recently announced that Iran shipped approximately 1.5 million barrels per day (bpd) of crude oil to China in August 2023, the highest volume of exports to the country in a decade. Kpler's data also shows that Iran's crude oil exports to China in the first seven months of 2023 averaged around 917,000 bpd.

Iran's export revenues swelled even as it escalated uranium enrichment to 60% purity, ignoring the concerns of the International Atomic Energy Agency (IAEA). At the same time, it has also provided Russia with military drones for use in its war with Ukraine, undaunted by Western admonitions. Iran has clearly used these two issues as bargaining chips with the U.S. The Wall Street Journal recently suggested that Tehran "has significantly slowed" the pace at which it is accumulating 60% enriched uranium and "has diluted some of its stockpile" to ease tensions with Washington. The Financial Times also reported that during ongoing negotiations on de-escalation, the U.S. implored Iran to stop supplying Russia with military drones.

Security achievements

The Iranian regime's economic gains from the lifting of oil and financial sanctions coincide with unexpected achievements on the foreign security front following the suppression of the 2022 protests.

On May 26, 2023, in yet another "successful" hostage-taking episode, Tehran orchestrated the repatriation of its security agent, Assadollah Assadi, from a Belgian prison. Assadi had been sentenced to 20 years in jail for plotting to attack a gathering of the Mujahedeen-e Khalq (MEK), a militant Iranian opposition group, in Paris. Tehran secured his release by arresting a Belgian citizen and holding him until Belgium agreed to hand over Assadi in exchange.

Less than a month later, on June 20, the Albanian police raided the MEK camp in Albania and confiscated computers belonging to its members. The Albanian police said they acted under a judicial order due to the "violation of agreements and commitments" made by the MEK when they settled in Albania "solely for humanitarian purposes" a decade ago. These allegations are reportedly related to cyber operations carried out by the MEK against Iranian government websites. These had occurred repeatedly in the past but had not elicited a similar response from Albania. Tirana had even severed diplomatic ties with the Islamic Republic in September 2022 after accusing Tehran of orchestrating cyberattacks against it.

Members of the MEK have been based in Albania since 2014 as a result of an agreement between Washington and Tirana. It was therefore significant that the U.S. State Department supported the June 2023 police raid and "the Government of Albania’s right to investigate any potential illegal activities within its territory."

But the Iranian regime has also managed to rack up further unexpected victories against its opponents based in Europe. On Feb. 18, 2023, Iran International, a prominent TV channel that actively promoted those advocating regime change in Iran during the nationwide protests, declared the temporary closure of its London studio until further notice. The network stated that due to "serious and immediate threats to the safety of Iranian journalists working within this media," as conveyed by the London Metropolitan Police, and with the intention of safeguarding the well-being of its journalistic staff, it had deemed it necessary to cease broadcasting from London. Instead, the network would continue its 24-hour broadcast operations from Washington, the network announced. The owner of Iran International is Volant Media, a U.K.-registered company directed by an investor of Saudi Arabian origin. While Iranian authorities regard this network as having ties to the Saudi government, the network's management refutes any such affiliation.

The decision to temporarily suspend Iran International's London-based broadcasts came just two days after a statement from the British Anti-Terrorism Police, in which they revealed that 15 different murder or kidnapping plots since the beginning of 2022 had been traced back to Iranian origins and issued a warning about foreign governments’ increasing activities.

Within three weeks, an even more significant development made headlines: Iran and Saudi Arabia, with Chinese mediation, signed an agreement to resume diplomatic relations after seven years of heightened political and security tensions. A Wall Street Journal report published after the announcement claimed, as a part of the deal, “Iran agreed to stop encouraging cross-border attacks on Saudi Arabia from Yemen by Iranian-backed Houthis," and in exchange, "Saudi Arabia agreed to tone down critical coverage of Iran by Iran International […] funded by Saudi business people." However, a Volant Media spokesman told The Wall Street Journal that Iran International is independent and that "Iran-Saudi relations have never been a factor influencing our reporting or editorial guidelines."

In any case, despite lingering doubts among analysts about the longevity of the newly re-established Tehran-Riyadh relations, the tripartite statement issued by Iran, Saudi Arabia, and China in Beijing on March 10, 2023, appeared quite ambitious. It underscored that Iran and Saudi Arabia had agreed not to intervene in each other's internal affairs, and furthermore, to uphold the security cooperation agreement signed on April 17, 2001. This agreement was struck at the zenith of relations between Tehran and Riyadh under the reformist administration of Mohammad Khatami.

Establishing a framework

Although the American government and its allies initially took a tough stance against the Islamic Republic in the midst of the Iranian protest movement in late 2022, the subsequent landscape has revealed a more complex picture. Amid the brutal quelling of the protests, the Iranian regime orchestrated a sequence of calculated maneuvers aimed at exerting pressure on its international adversaries by leveraging security measures. Taking Western citizens hostage, creating insecurity on European soil, shipping arms to Russia and the Houthis in Yemen, and enriching uranium to 60% purity are just a few of these tactics deftly employed by Tehran.

Remarkably, Tehran has turned each of these pressure points into a strategic bargaining tool, reaching a series of agreements with the very governments that appeared uncompromising since early 2023.

Iran's leadership is confronted with a multitude of economic, social, and security crises. Widespread corruption and mismanagement have left the economy in dire straits. Tensions with citizens over social freedoms have reached unprecedented levels. Many experts, both inside and outside Iran, predict that the accumulation of internal discontent will eventually lead to new, powerful waves of anti-regime protests. In addition, unforeseen events — such as the deteriorating health of the Iranian leader, uncontrollable security crises within the country, or a drastic shift in U.S. policy after the upcoming 2024 presidential elections — could potentially pave the way for a change in Tehran's foreign policy approach.

However, the deals that the Iranian regime has made with its foreign counterparts in 2023 and their underlying drivers are bound to leave an indelible mark upon the leadership’s memory. Until further notice, Tehran will draw upon these experiences to substantiate its dismissal of what might appear to be disconcerting warnings from the United States and its allies, even at the most pivotal of times.

In the eyes of the Iranian regime, the most effective strategy for engaging with the West and its allies will continue to involve applying pressure through security measures, rather than adhering to international regulations.

Marie Abdi is an Iranian political researcher focusing on the Islamic Republic's domestic and regional strategies.

Second publication by courtesy of Middle East Institute


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