Iran Update, July 26, 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 a new 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. An Islamic Revolutionary Guards Corps Quds Force (IRGC QF) commander, Iranian security officials, and Hamas leadership discussed capitalizing on Israeli unrest in a three-hour meeting in mid-July, according to an Iranian diplomat and a Hamas source who spoke with Reuters.
2. Bolivian Defense Minister Edmundo Novillo Aguilar expressed interest in purchasing Iranian drones on July 25. CTP previously assessed that Iran may seek to sell drones to Bolivia as part of a memorandum of understanding (MoU) that the two signed on July 20.
3. The Raisi administration seeks to bolster electricity cooperation with Russia. Connecting Iran’s electricity grid to Russia’s could increase domestic stability in Iran.
4. Supreme National Security Council (SNSC) Secretary Rear Admiral Ali Akbar Ahmadian met with newly-appointed Chinese Foreign Minister Wang Yi on the sidelines of a Friends of BRICS National Security Advisors meeting in Johannesburg, South Africa on July 24.

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.

An Islamic Revolutionary Guards Corps Quds Force (IRGC QF) commander, Iranian security officials, and Hamas leadership discussed capitalizing on Israeli unrest in a three-hour meeting in mid-July, according to an Iranian diplomat and a Hamas source who spoke with Reuters.[i] The leaders decided to refrain from “direct interference” in Israel’s social unrest. Axis of Resistance leadership and media have devoted considerable attention to the judicial reform protests in Israel. IRGC-affiliated Tasnim News Agency recirculated former Israeli officials' comments on a coming civil war and the disintegration of Israeli society in the past week.[ii] Lebanese Hezbollah (LH) leader Hassan Nasrallah claimed Israel was on a path of collapse and fragmentation on July 24, referring to Israeli judicial reform.[iii]

CTP is considering several hypotheses for how Iran and the Axis of Resistance may capitalize on internal Israeli unrest.  

• Iran may give priority to rebuilding capabilities in the West Bank. CTP previously assessed Iran would likely help Palestinian militants rebuild the military capabilities the Israel Defense Forces degraded during a July 2023 raid in Jenin.[iv] Iranian leaders have stressed the importance of cultivating an armed resistance in the West Bank.[v]
• Iran may build up weapon stockpiles in Syria. Iran may have used Israeli preoccupation with domestic and Palestine issues to move advanced weaponry through eastern Syria and avoid Israeli targeting in May 2023.[vi] Israel targeted weapons sites in Damascus in an airstrike on July 18 amid domestic unrest, however.[vii] Israel has long sought to prevent the Iranian transfer of personnel and weapons into Syria.
• Iran may not take provocative actions. Iranian leadership may calculate ongoing Israeli unrest will be more disruptive for Israel than any direct Iranian action. LH-affiliated media Al Manar has repeatedly published that political and military divisions in Israel benefit Axis of Resistance objectives.[viii]

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.

Bolivian Defense Minister Edmundo Novillo Aguilar expressed interest in purchasing Iranian drones on July 25.[ix] CTP previously assessed that Iran may seek to sell drones to Bolivia as part of a memorandum of understanding (MoU) that the two signed on July 20.[x] Novillo stated on July 25 that Iranian drones would help Bolivia monitor mountainous areas and secure its borders against drug traffickers.[xi] Ashtiani stated on July 19 that Iran’s defense industry can provide Bolivia with “advanced technology” and separately stated on July 20 that Iran can help Bolivia with “border control” and “confronting drug smuggling.”[xii] Drones are frequently used to bolster border security and combat smuggling.

The MOU is consistent with Iran’s explicitly stated policy in recent years to increase the number of countries that buy Iranian drones. Supreme Leader Military Affairs Advisor and former IRGC Commander Major General Yahya Rahim Safavi boasted in October 2022 that 22 countries—including Algeria, Armenia, Serbia, Tajikistan, and Venezuela—had submitted formal requests for Iranian drones.[xiii] President Ebrahim Raisi additionally promoted Iranian drone technology during several recent foreign trips, including during his most recent trip to Kenya, Uganda, and Zimbabwe between July 12-14.[xiv] Iranian media and officials have previously highlighted the desire of other African countries, including Ethiopia, to purchase Iranian-made drones.[xv] Iran has, furthermore, established drone manufacturing factories in Tajikistan and Venezuela and is building another in Yelabuga, Russia.[xvi]

The MOU is also consistent with CTP’s previous assessment that Iran is seeking to increase defense exports to generate revenue for the Iranian economy.[xvii] Armed Forces General Staff Chief Major General Mohammad Bagheri emphasized on May 31 that Iran will export its military capabilities to “friendly” countries.[xviii] Bagheri also called on Foreign Affairs Ministry officials to relay Iran’s willingness to export its defense capabilities to foreign dignitaries on May 30.[xix] Defense Minister Brigadier General Mohammad Reza Ashtiani separately expressed Iran’s willingness to supply Mali with military equipment and small arms on May 29 and offered to sell arms to and help develop Syria’s defense industry on May 8 and 10.[xx] Iran is currently facing critical economic conditions, with the value of the rial hovering slightly below 500,000 rials to one US dollar.[xxi] Iranian media, citing the Iran Statistical Center, reported on July 25 that Iran’s inflation rate is approximately 47.5 percent.[xxii]

The Raisi administration seeks to bolster electricity cooperation with Russia. Iranian Energy Minister Ali Akbar Mehrabian announced on July 16 that Iran is in “final negotiations” to conduct electricity exchanges with Russia via two routes, one via Azerbaijan and the other via Armenia and Georgia.[xxiii] Iranian officials have discussed connecting Iran’s electricity grid to Russia’s for several years, making it unclear whether Mehrabian’s announcement indicates real progress on this project.[xxiv] Unspecified senior Iranian Energy Ministry officials separately discussed bilateral electricity cooperation with managers of Russian power company Rosseti in Tehran on July 26.[xxv] Iran currently exchanges electricity with Afghanistan, Armenia, Azerbaijan, Iraq, Pakistan, Turkey, and Turkmenistan.[xxvi]

Connecting Iran’s electricity grid to Russia’s could increase domestic stability in Iran. Mehrabian stated that Iranians use more electricity in the summer while Russians use more electricity in the winter and that therefore Iran can export electricity to Russia in the winter and import electricity from Russia in the summer.[xxvii] Power outages during a heatwave previously triggered protests throughout Iran in June 2021.[xxviii] Several Iranian cities have experienced temperatures greater than 115 degrees Fahrenheit in recent weeks.[xxix] Iranian authorities have additionally shut down numerous offices across Iran for consuming “too much” electricity in recent weeks.[xxx]

Supreme National Security Council (SNSC) Secretary Rear Admiral Ali Akbar Ahmadian met with newly-appointed Chinese Foreign Minister Wang Yi on the sidelines of a Friends of BRICS National Security Advisors meeting in Johannesburg, South Africa on July 24.[xxxi] Ahmadian and Wang Yi discussed Chinese transportation investments and China’s support for Iranian territorial integrity. This meeting is part of Iran’s broader efforts to establish a parallel world order with other revisionist states that challenges Western “dominance.”[xxxii] Iran recently became a member of the Chinese and Russian-led Shanghai Cooperation Organization (SCO) on July 4.[xxxiii] Iranian media framed Iran’s accession into the organization as part of “the transformation of the world order.”[xxxiv] CTP previously assessed that Iran’s membership in this organization may enable it to circumvent sanctions by conducting non-US dollar financial transactions with other SCO countries.[xxxv] Iranian officials have additionally expressed support for Chinese regional infrastructure projects and sought to attract Chinese infrastructure investments in recent weeks.[xxxvi]