Insider news & Analysis in Iran

On Wednesday, the global media featured a number of different reactions to the previous day’s news that Rex Tillerson would be replaced in the position of US Secretary of State by the current CIA director, Mike Pompeo. The move has predictably met with opposition from critics of the Trump administration but praise from supporters of its assertive policies toward the Islamic Republic of Iran, because Pompeo’s views seem to align more closely with those of the president.

Mr. Trump himself cited differences of opinion over the 2015 Iran nuclear deal as a major reason for his firing of Tillerson. Although the outgoing Secretary of State had been harshly critical of that agreement, which had been spearheaded by the Obama administration and negotiated between Iran and six world powers, he was also credited with talking Trump down from initial plans to unilaterally withdraw from the Joint Comprehensive Plan of Action.

In January, the White House announced that Trump would not renew the relevant sanctions waivers when they next came due in May, unless Congress and its European partners took concrete steps to strengthen the JCPOA. Tillerson’s ouster makes it all the more likely that the president will follow through on this promise, in light of Pompeo’s public contempt for the deal and his declared commitment to countering Iran’s efforts to reenter the global economy.

As the Associated Press put it, Tillerson had recently been pursuing “a delicate strategy with European allies and others to try to improve or augment the Obama-era deal.” It is not immediately certain to what extent Pompeo will break with this approach, but media reports emphasize that the change in leadership is contributing to anxiety in Tehran while conversely raising the hopes of many of Iran’s adversaries, including those in the Arab world.

The AP quoted both hardline and reformist Iranian media as projecting that this was the first step toward the US torpedoing the JCPOA, an outcome that would be widely embraced by the leadership of regional states including Saudi Arabia and the United Arab Emirates. The AP also noted that these opponents of the Islamic Republic were looking forward to the change in US policy toward neighboring Qatar that also might follow Pompeo’s takeover of the State Department.

In June of last year, Saudi Arabia and the UAE were joined by Egypt and Bahrain in breaking of diplomatic relations with Qatar and cutting off travel to the island nation, in part because of its alleged efforts to encourage Arab cooperation with Tehran. These supposed efforts marked a significant break with the aggressive policies being pursued by other members of the Gulf Cooperation Council, who have been contributing to a Saudi-led coalition with the mission of pushing back Iranian influence, especially in Yemen where it supports the Houthi rebels who currently control the capital.

As the AP put it, “Trump has at times appeared to side with Qatar's rivals in the dispute, while Tillerson had projected a more neutral stance,” advocating for the Saudis to call off their boycott and open a dialogue with Qatar. Several Arab media analysts have thus projected a major shift following Tillerson’s ouster. And indeed, Pompeo’s well-known antipathy toward Iran, which he has compared to Islamic State militants, will almost certainly have knock-on effects upon the Trump administration’s approach to tangentially-related regional issues, including the Qatar’s apparent drift into Iran’s orbit.

But some voices within the Iranian regime have reportedly been trying to mitigate expectations regarding the extent of the effects from Tillerson’s appointment. According to Reuters, this was the approach taken on Wednesday by Bahram Qasemi, the spokesman for the Iranian Foreign Ministry, who emphasized that personnel changes in the Trump administration were nothing new and represented only “their internal issue.”

Reuters identified this as part of an effort to “downplay” the potential impact of the change on the JCPOA. But Qasemi stopped well short of saying that that agreement was secure, instead using the relevant news conference to insist that the United States “cannot be trusted very much” and may therefore follow through on Trump’s promise to withhold sanction waivers if his demands are not met.

Furthermore, not every Iranian official and not even every official in the Iranian Foreign Ministry has echoed Qasemi’s optimistic assessment of the Pompeo effect. Agence France Presse reported, for instance, that Deputy Foreign Minister Abbas Araqchi had identified Tillerson’s firing as evidence that the US is “determined to leave the nuclear deal.”

Araqchi also declared that if the US does leave the deal, Iran will immediately follow suit. However, AFP pointed out that on this point also there are internal contradictions among different members of the regime. President Hassan Rouhani has previously stated that Iran will continue adhering to the provisions of the JCPOA as long as doing so appears to be in the country’s interest. This leaves open the door for European entities to continue doing business with the Islamic Republic over the objections of the United States, provided that they can secure financing and keep the relevant transaction isolated from American sanctions.

There have been various reports of efforts, on both sides, to achieve this very isolation. France, for instance, has considered establishing a bank that would undertake no transactions with the US in order to minimize the risk of asset seizures. And the Iranian Central Bank recently announced its intention to establish a national cryptocurrency, apparently emulating a similar move that had been undertaken by Venezuela in order to evade sanctions.

In the meantime, Iran is also striving to secure sources of financing other than Western banks, and there have been scattered reports of success in this endeavor, although not all of them have been substantiated. On Wednesday, Iran’s English-language propaganda network Press TV announced that a Chinese company had signed an agreement with Iran Air to provide financing for pre-arranged purchases of aircraft from America’s Boeing Corporation and the French-headquartered Airbus.

The Press TV report did not identify the company by name, but seemed to be suggesting that Iran Air would still have opportunities to follow through on the purchase agreement even in the face of mounting pressure from the White House. However, the same report also acknowledged that there was persistent speculation about the Trump administration possibly cancelling license agreements that are necessary for the completion of sales from both Boeing and Airbus, since the latter utilizes American-made parts.

Given that Pompeo has staunchly opposed the expansion in trade with Iran, it stands to reason that pressure for this cancellation will intensify alongside pressure for the cancellation of the JCPOA itself after he takes over as Secretary of State.

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