Iran Update, August 11, 2023

The Iran Update aims to inform national security policy by providing timely, relevant, and independent open-source analysis of developments pertaining to Iran and its Axis of Resistance. This update covers political, military, and economic events and trends that affect the stability and decision-making of the Iranian regime. It also provides insights into Iranian and Iranian-sponsored activities abroad that undermine regional stability and threaten US forces and interests. The Critical Threats Project (CTP) at the American Enterprise Institute with support from the Institute for the Study of War (ISW) provides these updates Monday through Friday. To receive Iran Updates via email, please subscribe here.

The Institute for the Study of War (ISW) with support from the Critical Threats Project (CTP) at the American Enterprise Institute launched an interactive map of Iran and the Middle East. The map depicts events in Iran that affect the stability of the Iranian regime, namely anti-regime protests and reported poisoning incidents. It also shows developments in Syria that jeopardize regional stability and pose threats to US forces and interests, including Iranian and Iranian-backed militia positions.

Key Takeaways

1. Armed militant groups, including ISIS, have claimed attacks against pro-Syrian regime forces in eastern Syria on August 10, which may place pressure on Iranian campaigns and lines of effort there.
2. Syrian President Bashar al Assad indicated on August 9 that he will not seriously address the Arab states’ concerns in Syria, despite their revived bilateral ties. Assad’s rhetoric suggests that he pursued normalization with the Arab states to boost his international legitimacy but does not assign much urgency to further improving ties with them.
3. Iranian officials insisted that they can spend freely the $6 billion received as part of the recent prisoner swap agreement with the United States, rebuffing Western reports that Iran can only use the funds for humanitarian purposes. Iranian state media focused predominantly on celebrating the agreement with the United States and framing it as a victory for Iran on August 11.

Iranian Activities in the Levant

This section covers Iranian efforts to consolidate and expand Tehran’s economic, military, and political influence throughout the Levant especially in Syria. This section examines some of the many campaigns that Iran is pursuing to achieve this strategic objective. CTP will update and refine our assessments of these campaigns over time and in future updates.

Armed militant groups, including ISIS, have claimed attacks against pro-Syrian regime forces in eastern Syria on August 10, which may place pressure on Iranian campaigns and lines of effort there. ISIS attacked Syrian Arab Army (SAA) 17^th Division forces in the Mayadin desert on August 10 which resulted in over 40 causalities.[i] This attack is the largest on Syrian regime forces in the central Syrian desert since December 2020.[ii] The 17^th Division has previously collaborated with the Islamic Revolutionary Guards Corps (IRGC) Quds Force on security measures in eastern Syria.[iii] Iranian-backed militias deployed to the desert following the attack.[iv] Iranian-backed militias have several military facilities in the desert, including the T-2 Pumping Station, which is close to the location of the ISIS attack.[v] CTP has assessed that previous deployments to the desert may be to set conditions of an attack on US forces at the Al Tanf Garrison.[vi] Growing pressure from anti-Iran militants, such as ISIS, may impose pressure on this effort. CTP has also assessed that the Syrian regime’s lack of focus on killing and detaining mid-level ISIS leaders will enable the group to execute its campaign plan in Syria, which aims to set conditions for an ISIS resurgence after a US withdrawal.[vii]

A militia group called the Burkan al Furat Brigade has claimed multiple attacks on Iranian-backed militias in eastern Syria, including killing an Iranian-backed Iraqi commander outside of Deir ez Zor City on August 10.[viii] The group has vowed to continue operations until Iran leaves Syria.[ix] It is unclear if the group is responsible for all of the attacks it has claimed, however. The group has claimed attacks in areas where ISIS operates, and CTP cannot corroborate the militia’s claims. The recent confirmed attack on an Iraqi officer is consistent with CTP’s previous assessment that the buildup of Iranian-backed forces in eastern Syria since June 2023 may stoke local anti-Iran and anti-Shia discontent.[x] The buildup in forces is part of a coordinated Iranian, Russian, and Syrian regime coercion campaign to expel US forces from Syria.

Syrian President Bashar al Assad indicated on August 9 that he will not seriously address the Arab states’ concerns in Syria, despite their revived bilateral ties. Assad downplayed the importance of relations with the Arab states while stressing relations with Iran and Russia during an interview with Sky News, which CTP previously reported.[xi] Assad also dismissed the concerns of the Arab states, which include disrupting the Captagon trade, returning Syrian refugees, and minimizing Iranian influence in Syria.[xii] Assad has not made significant progress on these issues since he rejoined the Arab League in May 2023. The lack of progress, in fact, assists Iranian interests in Syria. Iranian-backed militants profit from the Captagon trade.[xiii] Iranian-backed militants have also tried to shape the human geography around Syria, which the return of refugees could disrupt. [xiv]

Assad’s rhetoric suggests that he pursued normalization with the Arab states to boost his international legitimacy but does not assign much urgency to further improving ties with them. Readmittance into the Arab League supports Assad’s efforts to frame his regime as the formal government for all of Syria. Iran and Russia have aided Assad’s push to reenter the Arab League and have meanwhile continued to expand their own ties with his regime.[xv] Assad’s reassertion of legitimacy and ruling capacity assists in the obfuscation of Iran and Russia’s influence and territorial control in Syria.

Iranian Domestic and Political Affairs

This section covers factors and trends affecting regime decision-making and stability. CTP will cover domestic politics, significant protest activity, and related issues here.

Iranian officials insisted that they can spend freely the $6 billion received as part of the recent prisoner swap agreement with the United States, rebuffing Western reports that Iran can only use the funds for humanitarian purposes. The agreement involves Iran releasing five US nationals in exchange for the United States allowing the release of $6 billion of frozen Iranian financial assets in South Korea.[xvi] The Iranian Foreign Affairs Ministry claimed on August 11 that “the decision on how to use these unfrozen resources and financial assets lies with the Islamic Republic of Iran.”[xvii] A media adviser to Iran’s negotiating team, Mohammad Marandi, separately claimed on August 11 that Iran has “full and direct access” to the unfrozen assets.[xviii] Marandi added that “no Qatari company” will control the unfrozen funds, referring to Western media reports that the United States will transfer the funds to the Qatari central bank.[xix] Iranian Vice President for Political Affairs Mohammad Jamshidi lastly indicated that Iran will not allow the US nationals to leave the country until the funds are “completely transferred.”[xx] Jamshidi did not specify whether he meant the transfer of the unfrozen assets to Qatar’s central bank or to Iran.

The Iranian regime could use the unfrozen funds for various purposes domestically and abroad. The funds would help Iran implement its 2023 fiscal budget and stimulate the struggling Iranian economy, as CTP previously reported.[xxi] The funds could go toward financing infrastructure projects and stabilizing the Iranian rial. Iran could also use some of these funds to support its proxy and partner militias throughout the Middle East.

Iranian state media focused predominantly on celebrating the agreement with the United States and framing it as a victory for Iran on August 11. Tasnim News Agency framed the agreement as an important success for regime efforts to stabilize the currency.[xxii] Iran Press separately described the prisoner swap agreement as Iran’s “authoritative” agreement with the Biden administration.[xxiii] An outlet tied to the Ebrahim Raisi administration inflated how much money Tehran is receiving as part of the agreement, claiming that the regime will receive over $10 billion.[xxiv]

The news of the agreement appears to have had an immediate positive impact on the value of the rial. The currency appreciated over two percent overnight.[xxv] This slight appreciation follows months of continued devaluation and high inflation rates. It is unclear, however, whether the rial will continue this positive momentum.