Iran Update, August 17, 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. Syrians demonstrated against worsening economic conditions and the Syrian regime’s mismanagement of the economy across the country.
2. Iran’s supreme leader emphasized internal security threats to the IRGC on August 17. He urged the IRGC combat enemy attempts to stoke unrest stemming from popular frustration over mandatory veiling and during the upcoming 2024 parliamentary elections.
3. Iranian Foreign Affairs Minister Hossein Amir Abdollahian traveled to Riyadh, Saudi Arabia on August 17, marking the first official visit of an Iranian foreign affairs minister to Saudi Arabia in more than eight years.
4. Russian efforts to ramp up the domestic production of Iranian Shahed-136/-131 drones indicate that Russia aims to develop the long-term capability to conduct large strikes series in Ukraine. The Washington Post report indicates that Russia is struggling to produce its own variants of the Shahed drones at the pace and quality it desires. Russia is likely dissatisfied with the quality of Shahed 131 and 136 drones it sources from Iran but likely seeks to retain Iran as a long-term strategic defense partner.

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.

Syrians demonstrated against worsening economic conditions and the Syrian regime’s mismanagement of the economy across the country. Syrian President Bashar al Assad removed fuel subsidies, raised salaries, and adjusted bus prices to counter the devaluation of the Syrian pound on August 15.[i] The Syrian pound has devalued by over 80 percent since May 2023, which has exacerbated an economic crisis for Syrian civilians.[ii]  The rising cost of living also has driven discontent in eastern Syria.

• Locals protested in the streets and called for a general strike in response to the Syrian regime’s announcement in Daraa and Suwayda provinces.[iii] Locals across Suwayda province in southern Syria called for Syrian President Bashar al Assad’s removal, re-using chants from the 2011 uprisings.[iv] Syrians previously protested fuel prices in Suwayda in December 2022.[v]
• The fuel price hike disrupted most forms of transportation in Tartous, Latakia, Damascus, Suwayda, and Homs Provinces on August 16.[vi] Public bus drivers stopped transporting civilians, according to reports on August 17 in Deir ez Zor city, following the raised price of fuel.[vii] Taxi and public bus strikes also disrupted service in pro-Assad Damascus on August 16 and 17.[viii]
• An unspecified number of butchers held an unannounced strike, according to reports on August 17 in Deir ez Zor City, after the governor raised the prices of a kilo of meat.[ix]

The Syrian Deir ez Zor Electricity Company reduced electricity access for some neighborhoods in Deir ez Zor city on August 16, which is further driving local discontent.[x] Electricity cuts have affected civilians across the province, and some took to swimming in the Euphrates River during the hottest time of the year.[xi] The Syrian Deir ez Zor Electricity Company did not reduce electricity access in areas where Iranian-backed militias or Syrian regime forces live, however.[xii] Iranian-backed militias and Syrian regime forces prevented residents not affiliated with them from swimming near Albu Kamal on August 17.[xiii]

Local opposition media reported the decision comes amid rising discontent with Iranian-backed militias.[xiv] CTP previously reported that Iran is attempting to cultivate a grassroots movement to expel US forces in Syria and that there is local dissatisfaction with the number of foreign fighters there.[xv] A widespread protest movement in Syria detracts from the international legitimacy Assad has been attempting to build.[xvi] Iran and Russia have demonstrated an interest in militarily and economically bolstering the Syrian regime, which implicates them in any further destabilization in the country. [xvii]

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.

Supreme Leader Ali Khamenei urged the IRGC to maintain its strength and commitment to the revolution in the face of enemy attempts to create crises inside Iran. Khamenei spoke to the Assembly of Commanders and Officials of the IRGC on August 17.[xviii] He emphasized the importance of the IRGC efforts to combat enemy attempts to create insecurity and disrupt the people’s lives and expressed concerns that Iran’s enemies will use rumors about rising gas prices, frustration over mandatory veiling, and the upcoming 2024 parliamentary elections to stoke unrest. He stressed the need for avoiding weakness and remembering the “truths” of the Iranian revolution.[xix] CTP previously assessed that there are divisions within the Iranian security establishment over the violent use of force to suppress internal unrest.[xx]

The emphasis on the IRGC’s internal security responsibilities marked a noticeable shift from Khamenei’s more externally oriented focus in his 2019 speech to these commanders.[xxi] That the regime endured a significant anti-regime protest movement in late 2022 partially explains this shift. Iranian leadership has voiced concerns about the resumption of anti-regime protests in recent weeks and regime officials are making preparations in anticipation of future protests commemorating Mahsa Amini’s killing on September 16, 2022, which could undermine the regime’s stability, as CTP previously reported.[xxii] Khamenei previously stated on June 4 that Iran’s enemies seek to “destroy” next year’s parliamentary elections.[xxiii] Interior Minister Ahmad Vahidi similarly stated on June 5 that Iran’s enemies are attempting to prevent the elections from being held.[xxiv] Other senior Iranian officials, including IRGC Deputy Commander Rear Admiral Ali Fadavi, warned of the enemies’ plans to destabilize the regime in recent weeks.[xxv] IRGC Political Deputy Yadollah Javani similarly warned on July 21 that universities will be the source of future “disturbance” and that the IRGC will “securitize” universities in the near future.[xxvi]

This was Khamenei’s first public meeting with an assembly of IRGC leaders since 2019. The supreme leader typically meets with the IRGC commanders in this venue annually but stopped holding them after 2019 due to the COVID-19 pandemic.[xxvii]

Iranian Foreign Affairs Minister Hossein Amir Abdollahian traveled to Riyadh, Saudi Arabia on August 17, marking the first official visit of an Iranian foreign affairs minister to Saudi Arabia in more than eight years.[xxviii] Iran and Saudi Arabia signed an agreement with Chinese mediation to reestablish bilateral relations on March 10.[xxix] Abdollahian discussed expanding economic cooperation and implementing the agreements Iran and Saudi Arabia signed in Beijing in March during a meeting with his Saudi counterpart Faisal bin Farhan on August 17.[xxx] Abdollahian’s visit to Saudi Arabia is part of Iran’s continuing effort to manage a stable and predictable relationship with the Gulf Arab states.[xxxi] Iran appointed a new ambassador to Saudi Arabia in May, Faisal bin Farhan visited Tehran in June, and Saudi Arabia’s embassy in Tehran began operating on August 6.[xxxii]

There are various obstacles to Iran and Saudi Arabia further improving bilateral relations, however. Iranian media has frequently touted the economic benefits that normalization with Saudi Arabia will bring Iran.[xxxiii] An unspecified Saudi official recently disclosed to Western media that Saudi Arabia is not pursuing sanctions exemptions, however.[xxxiv] The Saudi official stated that without a resolution to the nuclear issue between Iran and the West, “the economic benefits of the rapprochement will be very limited.” Iran and Saudi Arabia also remain divided over issues like Iran’s involvement in the Yemeni conflict and Iran's advancing nuclear program.[xxxv] Iran lastly opposes the idea of normalization between Israel and Saudi Arabia, as normalization between these states would further isolate Iran and strengthen the Western bloc seeking to contain Iran.[xxxvi]

NOTE: A version of this text will also appear in The Institute for the Study of War's (ISW) August 17, 2023 Russian Offensive Campaign Assessment.

Russian efforts to ramp up the domestic production of Iranian Shahed-136/-131 drones indicate that Russia aims to develop the long-term capability to conduct large strikes series in Ukraine. The Washington Post reported that a drone production facility in the Alabuga Special Economic Zone aims to build 6,000 Iranian Shahed drones domestically by 2025.[xxxvii] The Washington Post cited leaked documents from a disillusioned Alabuga facility worker that stated that Russia aims to develop a drone manufacturing capability that exceeds Iran’s production capacity and aims to improve on existing capabilities of the Iranian 131- and 136 drones. The report noted that Russia is focused on producing and improving the Shahed 136 variant, which has a payload 10 times larger than the Shahed-131. Ukrainian Air Force Spokesperson Yuri Ihnat stated on August 17 that Russian forces are producing many missiles, helicopters, and aircraft but are unable to sustain this production.[xxxviii] Ihnat recently assessed that Russian forces will rely on strike drones because they are cheaper and easier to manufacture than precision missiles.[xxxix] Ihnat stated that Russian forces are largely launching precision missiles that Russia recently produced, which indicates that Russian forces are prioritizing targeting Ukraine with precision missiles over restoring their stockpiles.[xl] Russian forces currently use Shahed drones in Ukraine primarily as decoys so that high precision missiles have better chances of hitting their targets. The Russian command may believe that a large number of strike drones will allow Russian forces to overwhelm Ukrainian air defenses, although Shahed drones remain Russia’s high-precision weapon system most vulnerable to Ukrainian air defenses.[xli] Shahed drones do not carry sufficient payloads to significantly damage most critical military targets and Russian forces are likely to continue using the drones to target soft and civilian targets in Ukraine.[xlii]
 
The Washington Post report indicates that Russia is struggling to produce its own variants of the Shahed drones at the pace and quality it desires. The Washington Post cited experts who assessed from the leaked documents that the Alabuga drone production facility has only manufactured the external components for 300 drones and is about one month behind schedule.[xliii] The leaked documents indicate that the Alabuga facility has struggled to fill specialist positions and that workers, including the one who leaked the documents, struggle with morale issues and that the plant has had to implement incentives such as increased pay and coercive measures such as seizing passports to retain workers. The documents also indicate that the Alabuga facility is struggling to obtain necessary drone components from foreign sources, as Russia only produces four of the 130 necessary internal components, and recent US blanket sanctions have further hindered Russia’s ability to acquire some electrical components.

Russia is likely dissatisfied with the quality of Shahed 131 and 136 drones it sources from Iran but likely seeks to retain Iran as a long-term strategic defense partner. The Washington Post’s leaked documents indicate that Iran has consistently held an advantage over Russia with the provision of the Shahed drones on Iranian rather than Russian terms.[xliv] The documents state that Iran leveraged negotiations to provide the smaller Shahed 131 drone to Russia despite Russia’s strong preference for the larger Shahed 136. The Washington Post reported that an estimated 25 percent of Iranian-provided drones arrive damaged, many even inoperable. Russia has continued to posture itself as supporting or partnering with Iran in other strategic initiatives, including promoting Iranian weapons at the ongoing Army-2023 development forum, continuing bilateral defense cooperation discussions, and seeking to expel US forces from Syria, however.[xlv]

The Washinton Post article added that Iran is expected to receive more than $1 billion for its help in developing the drone factory. Iran has insisted on receiving this payment in dollars or gold, moreover, due to the volatility of the ruble. This report is consistent with previous reports that Iran seeks to get money from Russia in return for Iranian drone technology. Iranian diaspora media claimed on July 6 that Russia has paid Iran nearly 900 million US dollars for Iranian drone technology.[xlvi] The British Secret Intelligence Service separately revealed on July 19 that Iran seeks to acquire cash from Russia in return for Iranian drones.[xlvii]