The U.S. has decided to send additional troops to Saudi Arabia after an attack on an oil facility that seriously impacted the country's oil production capabilities. This comes as U.S. Secretary of Defense Mark Esper called the recent attack evidence of a "dramatic escalation of Iranian aggression".
President Trump announced further sanctions on Iran's central bank and its sovereign wealth fund as a result of the attack, but has ruled out direct military action for now.
So the question is, how is Iran - already struggling under previous sanctions - likely to respond to the latest developments?
The Cipher Brief tapped former Senior CIA Officer Steven R. Ward who specializes in Iran and the surrounding region, for a look at what's likely ahead.
The Cipher Brief: What do you think Iran’s strategy will be going forward?
Ward: First, it can’t be overemphasized that the attack on the Saudi Abqaiq and Khurais oil facilities on September 14 was unprecedented. Regardless of whether the attack was launched by the Houthis, some other Iranian proxy, or by the Iranians, Tehran almost certainly played some role. Going after Saudi oil production capacity sends a very strong message that Iran’s leaders, perhaps increasingly desperate because of U.S. economic warfare, are willing to take great risks to implement a strategy to counter the pressure imposed by the United States and our allies and partners.
I think Tehran’s main objective is to get some relief from the very painful sanctions inflicted by the U.S. maximum pressure campaign. Given that Iran’s Supreme Leader has ruled out negotiations with Washington, their goal appears to be to prompt the Europeans, China, and perhaps others to offer the relief out of fear of the threat to world energy security and their economies. Such relief would not be easy, but it could come through lines of credit as proposed by France or trade alternatives to avoid the reach of the U.S. banking system such as the nascent European INSTEX system. Even better from Tehran’s perspective would be relief that came from countries flouting U.S. third-party sanctions by directly purchasing oil from Iran and daring the United States to punish them.
Iran’s approach to achieving this goal is to demonstrate that it will not be deterred by U.S. and allied forces in the region. Depending on the U.S. and Saudi response to Abqaiq, Iran almost certainly will continue to use plausibly deniable proxy attacks against Saudi infrastructure and commercial shipping in the Gulf to respond in kind for its inability to export oil. I think that Tehran is prepared to escalate in response to any retaliation for the Abqaiq attack, although it probably will wait to gauge the international reaction to a U.S., Saudi, or combined response. It then will retaliate directly against one or more of the Gulf Arab countries to intimidate them into backing down while daring Washington to risk taking another step up the escalatory ladder.
Iran has now demonstrated that it has the means to execute its strategy. Drones, rockets and missiles, naval mines, and other weapon systems that when used by proxies or by Iran have been shown capable of defeating defensive systems in the Arabian Peninsula and Persian Gulf. The regional countries are more alert now, so attacks will become more difficult. But there will be gaps and Iran will probe to find them. And, while Tehran may not be ready to attack U.S. forces directly, it can make life much more uncertain for our forces in the region. Also, if there is a significant retaliation for the Abqaiq attack, I would not rule out Iranian efforts to target U.S. forces directly.
The Cipher Brief: You’ve written about the need to take into account the possible second- and third-order consequences of U.S. actions. What do you think are some potential outcomes that might not be getting sufficient consideration?
Ward: Right now, Washington seems concerned about escalation and Iran’s ability to inflict damage on Gulf Arab energy facilities and possibly attempt to fulfill its longstanding threats to close the Strait of Hormuz to commercial shipping. I agree that this is a primary consequence of any retaliation against Iran and should be a priority concern, if only to help fashion the information operations needed to counter the inevitable “war for oil” allegations.
As far as secondary and tertiary consequences go, I could see Iran using the Houthis to expand the conflict—and the situation is a low-level conflict—into the Red Sea. The Houthis have attacked shipping in the past and the Saudis just intercepted an unmanned Houthi “bomb boat” filled with explosives there. In particular, given the recent Israeli attacks on Iranian bases in Syria and Iraq and Israel’s reliance on the Red Sea for trade, it is possible that Iran might ask the Houthis to target Israeli shipping around the Bab el-Mandeb strait in retaliation for the Israeli strikes.
Some other potential problems involve Iraq’s desire to stay out of the conflict and increased pressure on the government to restrict or remove U.S. forces there. After Israel was blamed for attacks on Iraqi militia bases in July and August, Baghdad placed restrictions on U.S. air operations that now force the leaders of Operation Inherent Resolve, the joint task force leading efforts against the Islamic State, to seek Iraqi approval for every helicopter, unmanned aerial vehicle and fighter aircraft launch. And, Israel, despite its current political turmoil, might try to take advantage of the volatility in the Gulf to execute more operations under its “campaign between the wars.” This nominally covert inter-war effort to prevent Israel's enemies from developing the capabilities to change the regional balance of power or undermine Israeli deterrence risks unpredictable consequences, especially given that Iran is already inclined to see Israeli actions as greenlighted by Washington and abetted by the Gulf Arabs.
The upcoming elections in Afghanistan, already subject to Taliban violence, is another arena where Iran could make things worse with the goal of diverting U.S. attention and forces from the Persian Gulf. Of course, the secondary consequence is that additional Iranian meddling prompted by the U.S. maximum pressure campaign might make a bad situation in Afghanistan worse.
Given that the whole point of maximum pressure was to get a better nuclear deal, I’m surprised that Washington isn’t more concerned about Iran moving farther and faster away from its past nuclear agreements. Having failed to get the Europeans to react effectively to its slow retreat from JCPOA commitments this summer, Tehran may feel compelled to try more drastic measures, such as ending its compliance with JCPOA. It also might walk away from earlier commitments, such as the more intrusive monitoring under the International Atomic Energy Agency’s Additional Protocols. In a worst case, the Iranians might try to add time pressure on the Europeans and others by giving the required three-month notice on an intent to leave the Non-Proliferation Treaty under Article X by arguing after a U.S. attack that it faces "extraordinary events" that jeopardize its supreme national interests.
The Cipher Brief: Is Iran winning or losing ground?
Ward: Iran is not winning, but I think it is fair to say that it is not losing either. The game is still on, and Tehran might even be ahead on points in some areas.
Iran, no doubt, is suffering from sanctions, and it has suffered setbacks from Israeli attacks in Syria and Iraq. The regime is clearly feeling pressure and, given the risk it took in supporting or directing the attack on Abqaiq, it apparently is getting desperate. Unfortunately, this makes Iran more dangerous and increases the risk of escalation into a conflict all sides swear they do not want.
Iran actually has had a decent run in confronting its adversaries since May. Up until then, Iran had practiced strategic patience for a year in the belief that it could ride out sanctions until 2021. When the Trump administration stop issuing waivers that allowed for some importing of oil from Iran in that month, however, it put the Iranian regime in a corner. Unsurprisingly, Iran shifted to a policy of pushing back by going after the most vulnerable targets. Attacks on shipping soon followed along with a significant uptick in Houthi drone and missile attacks on Saudi infrastructure. The Iranians even took a risk and shot down a U.S. drone. The upshot is that Iran is not being deterred from countering U.S. and allied pressure in the Persian Gulf region, has helped proxies inflict some pain on Riyadh, and has suffered few additional consequences.
The war in Yemen, meanwhile, is serving Iran’s purposes by continuing to be a drain on Saudi attention and resources as well as a major success in degrading Riyadh’s reputation—Yemen is globally seen as a horrible humanitarian catastrophe for which the Saudis deserve much of the blame—and in creating rifts among the Gulf Arabs.
Despite years of Israeli attacks on Iranian bases in Syria, Tehran has persisted in building up a presence in that country and has apparently exploited the Iraqi militia groups it supports to build up bases in Iraq to make the Israeli attacks slightly more difficult and very risky politically. Iran does not appear to be dissuaded from maintaining, much less increasing, its presence in Syria and Iraq. In addition, the Israeli strikes haven’t been cost free. Israel lost an F-16 fighter to Syrian air defenses in 2018 and an Israeli strike in Syria that killed two Hizballah commanders was followed at the start of this month by the first exchange of fire across the Lebanese-Israeli border since the 2006 war.
In addition, I’m sure Iranian Foreign Minister Javad Zarif is taking a lot of pleasure from the fate of the men he called the “B Team” and blamed for the confrontational and—his words—“warmongering” U.S. policies directed at Iran. John Bolton is out as U.S. National Security Advisor. UAE Crown Prince Muhammed bin Zayed, following the ship attacks this summer, traveled to Tehran to improve relations and is currently working against Riyadh in Yemen. Saudi Crown Prince Muhammed bin Salman is failing in Yemen, is tarred with the murder of Washington Post reporter Jamal Khashoggi, and just witnessed a significant amount of Saudi oil being taken off the market for at least a few weeks while repairs are made at Abqaiq. The latter event also put a serious crimp in the Crown Prince’s effort to sell shares in the Saudi Arabian Oil Company, (Aramco), which is key to his ambitious plans to transform the Saudi economy. That had to hurt his pride as much as his wallet. Israeli Prime Minister Benjamin “Bibi” Netanyahu, meanwhile, appears to be on his way out of office and possibly into a courtroom. So, not winning, but definitely not losing.
The Cipher Brief: What do you see happening in the short-term between Tehran and Washington?
Ward: The last takeaway from this assessment —and one of my biggest current concerns—is that Iranian hardliners might be getting cocky. It is well within the realm of possibility that in the coming weeks they might do something that provokes the larger confrontation that all parties want to avoid. The Trump administration will need to tread very carefully to avoid this coming to pass. As I’ve suggested before, if deterrence ultimately is about avoiding conflict, a U.S. approach that provides Iran some viable alternatives rather than piling on more pressure would be a powerful step in that direction. Looking for a military response to fix a faulty and failing Iran policy will not help stabilize the situation.
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