Saudi Arabia’s Crown Prince, Mohammed bin Salman is warning that military conflict with Iran would collapse the global economy. He made the statement during an interview with CBS’ 60 Minutes and said that he prefers a political solution over a military option.
"The region represents about 30 percent of the world's energy supplies, about 20 percent of global trade passages, about four percent of the world GDP (gross domestic product)," said the crown prince. "Imagine all of these three things stop. This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries.”
Tensions between the U.S. and Iran remain high. The Trump Administration ordered additional sanctions against Tehran after the oil facility attack and pledged to commit U.S. troops to the region to help bolster Saudi Arabia’s defensive capabilities against future attacks.
We tapped Cipher Brief expert Norm Roule, who previously served as the National Intelligence Manager for Iran at ODNI to help us understand the broader context of what came out of last week’s United Nations General Assembly meeting and what it means in the months to come.
The Cipher Brief: There have been efforts by French President Emmanuel Macron to encourage direct talks between President Trump and Iranian President Hassan Rouhani, but so far, they’ve gone nowhere. Meanwhile, the UK, France and Germany have recently joined the U.S. in its assessment that Iran was most likely behind the recent drone attacks on a Saudi oil facility – something Iran denies. Give us a sense of your impressions, especially since there was so much focus on Iran at last week’s United Nations General Assembly meeting in New York?
Roule: Despite the specter of a possible meeting between President Trump and his Iranian counterpart, the prospect of such an encounter remains very unlikely. The U.S. sees no reason to compromise on its strategy of deep sanctions, Iran has no incentive to give President Trump a photo opportunity absent sanctions relief, and hardliners in Iran likely see little reason to compromise on their core regional, missile, and nuclear demands.
The UK, France, and Germany did issue a tough statement following the Iranian attacks on Abqaiq and Khurais and this is a success for U.S. diplomacy. At the same time, these countries offered little beyond a tough statement. There has been some hardening of views on Iran, but this has yet to translate into real multilateral economic and diplomatic pressure.
Saudi Arabia has responded with skill. Along with the UAE, they clearly are trying to avoid an escalation and to build an international coalition against Iran. Some may say this slows the response against Iran, but a multilateral response to Tehran’s aggressive behavior will be more effective than any single country’s response.
Iran used the forum to conduct multiple policy and media meetings in which it put forward a stew of themes which included defiance, threats, Iran as victim, hints of possible concessions, and a call for the replacement of the U.S. in the region by a coalition of regional states.
The UN Security Council remains ineffective, largely as a result of Russian refusal to allow the group to criticize Iran.
The Cipher Brief: What is the long-term significance of the UK, France and Germany all joining the U.S. and Saudi Arabia in attributing the Saudi oil facility attacks on Iran?
Roule: It is important that these countries have begun to talk about more than the nuclear deal. But they are unlikely to abandon the nuclear deal. This leaves them with limited options beyond joining – or creating parallel organizations to U.S. security efforts in the Gulf.
The Cipher Brief: What is the likely next move for Tehran?
Roule: Tehran has few options beyond its current playbook. Iran needs sanctions relief and likely believes continued calculated pressure can yield diplomatic results. Much depends on how the world finally responds to the Abqaiq attacks.
Norman T. Roule, Former National Intelligence Manager for Iran, ODNI
When the investigation concludes and Iran is formally identified as the attacker, it will either face a punishment which deters similar future action or a non-response which will encourage Iran to believe that its attacks have yet to touch international red lines.
The Cipher Brief: Is it likely that Tehran will continue to use proxies for further attacks?
Roule: Yes, especially from Yemen. But the absence of international response to the shoot down of the drone, video of Iranian mining of tankers, and (to date) the Abqaiq attacks will make it more likely that Iran will simply decide that we have become accustomed to aggressive actions on the part of Iran itself.
The Cipher Brief: Was the U.S. response to the attacks – with sanctions and sending troops to Saudi – enough to deter any future planned attacks by Iran?
Roule: No, but I don’t think the recent U.S. troop deployments were meant to deter attacks as such.
Norman T. Roule, Former National Intelligence Manager for Iran, ODNI
The U.S. troop build up has been focused on defensive issues, such as improving air defense capability. We already have vast offensive power in the region. This is less an issue of U.S. capability and the Iranian military is professional enough to understand what enormous damage we could inflict on them. For Iran, the issue is more likely an assessment of U.S. will. Here we hurt ourselves by the lack of a partisan approach to Iranian aggression.
The Cipher Brief: What is likelihood that we will see an increase in Iranian-sponsored cyber attacks?
Roule: Very high. Cyber tools remain the cheapest way Iran can conduct offensive attacks against high value targets. U.S. firms in the region should do everything possible to improve cyber defenses and urge their host governments to do the same.
The Cipher Brief: What is the likelihood that Iran will mobilize Hezbollah to begin attacking U.S. interests overseas?
Roule: I don’t see this as likely in the near term. Hezbollah is still engaged in Lebanon and has suffered a financial hit because of U.S. sanctions. Iran will continue to use Hezbollah in Yemen and to train regional militants (such as the Bahrainis), but terrorism is not the right tool for current circumstances.
The Cipher Brief: What should global investors be focused on in the coming months?
Roule: Periods of short, sharp spikes of turbulence in oil and commodity markets. Iran will seek to introduce such damage, but the U.S. and its regional partners will attempt to quickly respond to restore confidence. The Saudi response to the Abqaiq attack is a good example and an extraordinary performance by any measure. Iranian planners no doubt will aim future attacks against regional infrastructure targets where it believes its adversary is less capable of fast repairs.
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Interact directly with dozens of Cipher Brief Experts, includingNorm Roule, atThe Cipher Brief’s 2020 Threat Conferencein Sea Island, GA March 22-24. The focus is on future threats and predicting what’s coming from artificial intelligence to quantum computing to space and beyond. Seats are extremely limited. Apply to attend today.