Tag Archives: Iran Nuclear Deal

Exclusive: Iran moves missiles to Iraq in warning to enemies

FILE PHOTO: A display featuring missiles and a portrait of Iran's Supreme Leader Ayatollah Ali Khamenei is seen at Baharestan Square in Tehran, Iran September 27, 2017. Nazanin Tabatabaee Yazdi/TIMA via REUTERS

By John Irish and Ahmed Rasheed

PARIS/BAGHDAD (Reuters) – Iran has given ballistic missiles to Shi’ite proxies in Iraq and is developing the capacity to build more there to deter attacks on its interests in the Middle East and to give it the means to hit regional foes, Iranian, Iraqi and Western sources said.

Any sign that Iran is preparing a more aggressive missile policy in Iraq will exacerbate tensions between Tehran and Washington, already heightened by U.S. President Donald Trump’s decision to pull out of a 2015 nuclear deal with world powers.

It would also embarrass France, Germany and the United Kingdom, the three European signatories to the nuclear deal, as they have been trying to salvage the agreement despite new U.S. sanctions against Tehran.

According to three Iranian officials, two Iraqi intelligence sources and two Western intelligence sources, Iran has transferred short-range ballistic missiles to allies in Iraq over the last few months. Five of the officials said it was helping those groups to start making their own.

“The logic was to have a backup plan if Iran was attacked,” one senior Iranian official told Reuters. “The number of missiles is not high, just a couple of dozen, but it can be increased if necessary.”

Iran has previously said its ballistic missile activities are purely defensive in nature. Iranian officials declined to comment when asked about the latest moves.

The Iraqi government and military both declined to comment.

The Zelzal, Fateh-110 and Zolfaqar missiles in question have ranges of about 200 km to 700 km, putting Saudi Arabia’s capital Riyadh or the Israeli city of Tel Aviv within striking distance if the weapons were deployed in southern or western Iraq.

The Quds Force, the overseas arm of Iran’s powerful Islamic Revolutionary Guard Corps (IRGC), has bases in both those areas. Quds Force commander Qassem Soleimani is overseeing the program, three of the sources said.

Western countries have already accused Iran of transferring missiles and technology to Syria and other allies of Tehran, such as Houthi rebels in Yemen and Lebanon’s Hezbollah.

Iran’s Sunni Muslim Gulf neighbors and its arch-enemy Israel have expressed concerns about Tehran’s regional activities, seeing it as a threat to their security.

Israeli officials did not immediately respond to requests for comment about the missile transfers.

Israeli Prime Minister Benjamin Netanyahu said on Wednesday that anybody that threatened to wipe Israel out “would put themselves in a similar danger”.

MISSILE PRODUCTION LINE

The Western source said the number of missiles was in the 10s and that the transfers were designed to send a warning to the United States and Israel, especially after air raids on Iranian troops in Syria. The United States has a significant military presence in Iraq.

“It seems Iran has been turning Iraq into its forward missile base,” the Western source said.

The Iranian sources and one Iraqi intelligence source said a decision was made some 18 months ago to use militias to produce missiles in Iraq, but activity had ramped up in the last few months, including with the arrival of missile launchers.

“We have bases like that in many places and Iraq is one of them. If America attacks us, our friends will attack America’s interests and its allies in the region,” said a senior IRGC commander who served during the Iran-Iraq war in the 1980s.

The Western source and the Iraqi source said the factories being used to develop missiles in Iraq were in al-Zafaraniya, east of Baghdad, and Jurf al-Sakhar, north of Kerbala. One Iranian source said there was also a factory in Iraqi Kurdistan.

The areas are controlled by Shi’ite militias, including Kata’ib Hezbollah, one of the closest to Iran. Three sources said Iraqis had been trained in Iran as missile operators.

The Iraqi intelligence source said the al-Zafaraniya factory produced warheads and the ceramic of missile molds under former President Saddam Hussein. It was reactivated by local Shi’ite groups in 2016 with Iranian assistance, the source said.

A team of Shi’ite engineers who used to work at the facility under Saddam were brought in, after being screened, to make it operational, the source said. He also said missiles had been tested near Jurf al-Sakhar.

The U.S. Central Intelligence Agency and the Pentagon declined to comment.

One U.S official, speaking on condition of anonymity, confirmed that Tehran over the last few months has transferred missiles to groups in Iraq but could not confirm that those missiles had any launch capability from their current positions.

Washington has been pushing its allies to adopt a tough anti-Iran policy since it reimposed sanctions this month.

While the European signatories to the nuclear deal have so far balked at U.S. pressure, they have grown increasingly impatient over Iran’s ballistic missile program.

France, in particular, has bemoaned Iranian “frenzy” in developing and propagating missiles and wants Tehran to open negotiations over its ballistic weapons.

Foreign Minister Jean-Yves Le Drian said on Thursday that Iran was arming regional allies with rockets and allowing ballistic proliferation. “Iran needs to avoid the temptation to be the (regional) hegemon,” he said.

In March, the three nations proposed fresh EU sanctions on Iran over its missile activity, although they failed to push them through after opposition from some member states.

“Such a proliferation of Iranian missile capabilities throughout the region is an additional and serious source of concern,” a document from the three European countries said at the time.

MESSAGE TO FOES

A regional intelligence source also said Iran was storing a number of ballistic missiles in areas of Iraq that were under effective Shi’ite control and had the capacity to launch them.

The source could not confirm that Iran has a missile production capacity in Iraq.

A second Iraqi intelligence official said Baghdad had been aware of the flow of Iranian missiles to Shi’ite militias to help fight Islamic State militants, but that shipments had continued after the hardline Sunni militant group was defeated.

“It was clear to Iraqi intelligence that such a missile arsenal sent by Iran was not meant to fight Daesh (Islamic State) militants but as a pressure card Iran can use once involved in regional conflict,” the official said.

The Iraqi source said it was difficult for the Iraqi government to stop or persuade the groups to go against Tehran.

“We can’t restrain militias from firing Iranian rockets because simply the firing button is not in our hands, it’s with Iranians who control the push button,” he said.

“Iran will definitely use the missiles it handed over to Iraqi militia it supports to send a strong message to its foes in the region and the United States that it has the ability to use Iraqi territories as a launch pad for its missiles to strike anywhere and anytime it decides,” the Iraqi official said.

Iraq’s parliament passed a law in 2016 to bring an assortment of Shi’ite militia groups known collectively as the Popular Mobilisation Forces (PMF) into the state apparatus. The militias report to Iraq’s prime minister, who is a Shi’ite under the country’s unofficial governance system.

However, Iran still has a clear hand in coordinating the PMF leadership, which frequently meets and consults with Soleimani.

(Additional reporting by Phil Stewart and Jonathan Landay in Washington; editing by David Clarke)

World Court hears Iran lawsuit to have U.S. sanctions lifted

By Stephanie van den Berg and Toby Sterling

THE HAGUE (Reuters) – Iranian lawyers asked the International Court of Justice on Monday to order the United States to lift sanctions imposed by the Trump administration against Tehran, but Washington described the suit as meritless.

At the start of a week of hearings in The Hague, the court’s president asked the United States to respect the outcome of the case that Iran filed in July. During their decades of animosity, both countries have ignored some rulings at the court.

Tehran’s suit says the U.S. sanctions, which are damaging the already weak Iranian economy, violate terms of a little-known friendship treaty between the two countries.

“The U.S. is publicly propagating a policy intended to damage as severely as possible Iran’s economy and Iranian national companies, and therefore inevitably Iranian nationals,” said Mohsen Mohebi, representing Iran. “This policy is plainly in violation of the 1955 Treaty of Amity.”

He said Iran had sought a diplomatic solution to the countries’ dispute but was rejected.

U.S. Secretary of State Mike Pompeo described Iran’s suit as “an attempt to interfere with the sovereign rights of the United States to take lawful actions, including re-imposition of sanctions, which are necessary to protect our national security”.

“We will vigorously defend against Iran’s meritless claims this week in The Hague,” he said in a statement.

A ruling is expected within a month, though no date has been set.

The ICJ is the United Nations tribunal for resolving international disputes. Its rulings are binding, but it has no power to enforce them.

U.S. President Donald Trump pulled out of a 2015 pact between Iran and major world powers under which sanctions were lifted in return for Tehran accepting curbs on its nuclear program. The Trump administration then announced unilateral plans to restore sanctions against Tehran.

Although Washington’s European allies protested against Trump’s move, most Western companies intend to adhere to the sanctions, preferring to lose business in Iran than be punished by the United States or barred from doing business there.

The United States and Iran have clashed at the court in the past since they became enemies after Iran’s 1979 Islamic Revolution. Iran ignored a 1980 U.S. suit at the ICJ over the seizure of American diplomats in Tehran, which the court found to be illegal.

In another suit and countersuit, the ICJ found that the 1955 treaty was still valid even though it was signed before the revolution. However, the court found in 2003 that neither actions by the United States against Iranian oil platforms nor Iranian attacks on American shipping violated the treaty.

(Writing by Toby Sterling; Editing by David Goodman, Peter Graff and David Stamp)

Iran threatens to hit U.S., Israel after Trump aide warns of ‘maximum pressure’

FILE PHOTO - Iranian cleric Ayatollah Seyed Ahmad Khatami delivers a sermon during Friday prayers in Tehran, Iran, May 26, 2017. TIMA via REUTERS

By Bozorgmehr Sharafedin and Dan Williams

LONDON/JERUSALEM (Reuters) – Iran warned on Wednesday it would hit U.S. and Israeli targets if it were attacked by the United States after President Donald Trump’s security adviser said Washington would exert maximum pressure on Tehran going beyond economic sanctions.

A U.S.-Iranian war of words has escalated since Trump withdrew Washington from the world powers’ nuclear deal with Iran in May, blasting it as flawed and reimposing sanctions to choke Iran’s economy and force it to renegotiate or change direction.

The U.S. turnaround, which scrapped a wary detente between Iran and the United States after decades of hostility, has drawn defiance from Tehran despite renewed unrest over economic privations and has unnerved other big powers where businesses have been debating whether to divest from Iran.

U.S. National Security Adviser John Bolton told Reuters the return of U.S. sanctions was having a strong effect on Iran’s economy and popular opinion.

“There should not be any doubt that the United States wants this resolved peacefully, but we are fully prepared for any contingency that Iran creates,” Bolton said during a visit to Israel, Iran’s enemy in the Middle East.

U.S. sanctions dusted off this month targeted Iran’s car industry, trade in gold and other precious metals, and purchases of U.S. dollars crucial to international financing and investment and trade relations. Farther-reaching sanctions are to follow in November on Iran’s banking sector and oil exports.

European powers have been scrambling to ensure Iran secures enough economic benefits to persuade it to stay in the deal. This has proven difficult, with many European firms keen to avoid financial penalties by the Trump administration.

“We expect that Europeans will see, as businesses all over Europe are seeing, that the choice between doing business with Iran or doing business with the United States is very clear to them,” Bolton said.

“So we will see what plays out in November. But (Trump) has made it very clear – his words – he wants maximum pressure on Iran, maximum pressure, and that is what is going on.”

Asked at a news conference later whether the United States had discussed any plans with ally Israel on how to capitalize on economic protests in Iran and if these posed any tangible threat to the Tehran government, Bolton said:

“Just to be clear, regime change in Iran is not American policy. But what we want is massive change in the regime’s behavior … We are going to do other things to put pressure on Iran as well, beyond economic sanctions.” He did not elaborate.

“PRICE OF WAR”

A senior Iranian cleric seen as close to Supreme Leader Ayatollah Ali Khamenei told worshippers at Eid holiday prayers in Tehran: “The price of a war with Iran is very high for America.

“They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted,” Ahmad Khatami said.

Iran’s Revolutionary Guards have said it could strike Israeli cities with missiles if it were threatened. Iran also has proxies in the region including Lebanon’s Hezbollah.

The Revolutionary Guards said on Wednesday they would continue increasing Iran’s defensive capabilities not surrender to U.S. pressure to scrap its ballistic missile program.

Last week, Khamenei – who has the ultimate say on Iranian policy – said the United States would avoid outright conflict because of Iranian military might.

“There will be no war…We have never started a war and they will not confront Iran militarily,” he said.

Trump’s campaign to isolate Iran and cripple its economy has put the old adversaries back on a collision course that European signatories to the nuclear accord fear will raise the risk of a broader Middle East war.

DEAL ‘SOFT ON IRAN’

Under the 2015 deal, Iran curbed its contested uranium enrichment program under U.N. monitoring and won an end to global sanctions in return.

Trump has condemned the deal as too soft on Tehran and would not stop it developing a nuclear bomb, though U.N. nuclear non-proliferation inspectors have repeatedly certified Iranian compliance with its terms.

Khatami, the prominent Iranian cleric, also said Trump’s offer of talks was unacceptable as he was demanding Tehran give up its ballistic missile program and scale back regional influence. Neither issue was covered by the 2015 agreement.

“Americans say you should accept what we say in the talks. So this is not negotiation, but dictatorship,” Mizan news agency quoted Khatami as saying.

Trump has said Iran must stop meddling in wars in Syria and Yemen, part of a foreign policy supporting regional allies in conflict with proxies of U.S.-backed Gulf Arab kingdoms.

Tehran has not given an inch to Trump’s pressure despite an economy beset by high unemployment and inflation and a rial currency that has lost half its value since April.

Thousands of Iranians have protested against price rises of some food items, a lack of jobs and state corruption. The protests over the cost of living have often turned into anti-government rallies.

“I think the effects, the economic effects certainly, are even stronger than we anticipated,” Bolton said.

“But Iranian activity in the region has continued to be belligerent: what they are doing in Iraq, what they are doing in Syria, what they are doing with Hezbollah in Lebanon, what they are doing in Yemen, what they have threatened to do in the Strait of Hormuz.”

The Strait is a strategic waterway for oil shipments which Iran’s Revolutionary Guards have threatened to block in response to Trump administration calls to ban all Iranian oil exports.

(Writing by Mark Heinrich; Editing by Janet Lawrence)

U.S. Navy says will protect commerce in face of Iran oil threat

FILE PHOTO: The Sterett Destroyer escorts the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) during a transit through the Strait of Hormuz, February 14, 2012. REUTERS/Jumana El Heloueh/File Photo

By Bozorgmehr Sharafedin

LONDON (Reuters) – The U.S. Navy stands ready to ensure freedom of navigation and free flow of commerce, a spokesman for the U.S. military’s Central Command said on Thursday, after Iran warned it will block oil shipments through the Strait of Hormuz.

Iran has threatened in recent days to close the strait, a vital route for world oil supplies, if Washington tries to cut Tehran’s exports.

An Iranian Revolutionary Guards commander said on Wednesday Iran would block any exports of crude for the Gulf in retaliation for hostile U.S. action.

“The U.S. and its partners provide, and promote security and stability in the region,” Central Command spokesman Navy Captain Bill Urban said in an email to Reuters.

Asked what would be the U.S. Naval Forces reaction if Iran blocks the Strait of Hormuz, he said: “Together, we stand ready to ensure the freedom of navigation and the free flow of commerce wherever international law allows.”

The Islamic Revolutionary Guards Navy (IRGCN) lacks a strong navy and instead focuses on an asymmetric warfare capability in the Gulf. It possesses many speed boats and portable anti-ship missile launchers and can lay naval mines.

A senior U.S. military leader said in 2012 the Guards have the ability to block the Strait of Hormuz “for a period of time” but the United States would take action to reopen it in such an event.

In May, U.S. President Donald Trump pulled out of a multinational deal under which sanctions on Iran were lifted in return for curbs to its nuclear program. Washington has since told countries they must stop buying Iranian oil from Nov. 4 or face financial measures.

(Reporting by Bozorgmehr Sharafedin; Editing by Matthew Mpoke Bigg)

Iran bans 1,300 imports as protesters, police clash over currency weakness

FILE PHOTO: A woman looks at exchange rates by the window of a currency exchange shop in Tehran's business district, Iran January 7, 2012. REUTERS/Raheb Homavandi /File Photo

By Andrew Torchia

DUBAI (Reuters) – Iran is banning imports of over 1,300 products, preparing its economy to resist threatened U.S. sanctions, amid rare public protests against the plunge of its currency to record lows.

Police patrolled Tehran’s Grand Bazaar on Monday as security forces struggled to restore normality after clashes with protesters angered by the rial’s collapse, which is disrupting business by driving up the cost of imports, witnesses said.

Traders from the bazaar, whose merchants supported Iran’s 1979 Islamic revolution, told Reuters by telephone that most shops remained closed.

“Police have dispersed the protectors. We are all angry with the economic situation. We cannot continue our businesses like this. But we are not against the regime,” said a merchant in the bazaar, who asked not to be identified.

Industries and trade minister Mohammad Shariatmadari slapped the import ban on 1,339 goods that could instead be produced within the country, Iran’s Financial Tribune newspaper reported on Monday, quoting an official document.

Prohibited imports include home appliances, textile products, footwear and leather products, as well as furniture, healthcare products and some machinery, the Tehran Times said.

The order suggests the U.S. sanctions threat is pushing Tehran back toward running a “resistance economy” designed to conserve foreign exchange reserves and become as self-sufficient as possible in many products.

The rial is under heavy pressure from the U.S. sanctions threat. It sank as low as 90,000 against the dollar in the unofficial market on Monday from 87,000 on Sunday and around 75,500 last Thursday, according to foreign exchange website Bonbast.com. At the end of last year, it stood at 42,890.

After U.S. President Donald Trump decided to withdraw from world powers’ deal with Iran on its nuclear program, some U.S. sanctions are to be reimposed in August and some in November.

This may cut Iran’s hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians’ savings from the rial into dollars.

Hundreds of merchants gathered in front of parliament in Tehran on Monday to protest at the rial’s fall, witnesses said.

In the Grand Bazaar, hundreds staged a similar protest, videos posted on social media showed. A larger, sustained series of protests could put pressure on President Hassan Rouhani, who has already been harshly criticized by hardliners for his economic record.

Ali Fazeli, the head of Iran’s Chamber of Guilds, a business association, told the semi-official Tasnim news agency later on Monday: “Business is as usual in the Grand Bazaar.”

State TV quoted Tehran’s deputy governor Abdolazim Rezaie as saying “no one has been arrested in the Tehran protests”, adding that all the shops will be open on Tuesday.

On Sunday, merchants at Tehran’s mobile phone shopping centers Aladdin and Charsou shut their shops to protest against the rial’s slide, Fars news agency reported.

RESISTANCE ECONOMY

Iran eased its “resistance economy” policy after many international sanctions were lifted in January 2016 under the nuclear deal. Rouhani announced plans to boost Iran’s foreign trade and give foreign companies a bigger role in its economy.

With Iran now aiming to close its markets to many foreign products and the government intervening to support locally owned companies, those goals look more distant.

Mehrdad Emadi, an Iranian economist who heads energy risk analysis at London’s Betamatrix consultancy, said the sanctions threat was strengthening interests in the Iranian government that favored tighter state control of the economy.

“In the coming months we will see much more intervention in the economy by the government, a centrally imposed style of management by dictat,” he said.

One result is likely to be a shift of influence over Iran’s non-oil foreign trade from the private sector, along with a strong presence by the government’s Revolutionary Guards, to near-complete dominance by the Guards, he added.

Emadi and other Iranian economists noted that Iran had imposed import bans during the previous sanctions era before 2016 with only limited success.

Many foreign goods continued to enter the country at higher prices as a result of corruption and smuggling, benefiting business interests with the close official ties needed to arrange the shipments.

The government is justifying its latest clampdown on imports by citing economic security. The Tehran Times quoted Mohammad Reza Pourebrahimi, head of parliament’s economic committee, as saying the ban would prevent an outflow of $10 billion of foreign currency.

The International Monetary Fund estimated in March that the government held $112 billion of foreign assets and reserves, and that Iran was running a current account surplus. These figures suggested Iran might withstand the sanctions without an external payments crisis.

But as U.S. pressure constricts Iran’s access to the international banking system, its ability to deploy some of those resources may have suffered. Indian government sources told Reuters last week that New Delhi was looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might close.

Concern about the rial’s vulnerability is prompting ordinary Iranians to pour money into non-cash assets. Tehran real estate prices have climbed and Iran’s stock market has jumped 17 percent since the end of May to a record high. Prices of gold coins have also risen sharply, local media reported.

(Editing by William Maclean)

Khamenei says curbing Iran’s missile program a ‘dream that will never come true’

FILE PHOTO: Iran's Supreme Leader Ayatollah Ali Khamenei speaks during Friday prayers in Tehran September 14, 2007. REUTERS/Morteza Nikoubazl/File Photo

ANKARA (Reuters) – Iran’s top leader said on Monday it would respond harshly to any attack and that Western demands for limits on its ballistic missile program are a “dream that will never come true”.

Tensions between Iran and the West have resurged since President Donald Trump pulled the United States out of world powers’ 2015 nuclear deal with Tehran, calling it deeply flawed.

European signatories are scrambling to save the accord, which they see as crucial to forestalling an Iranian nuclear weapons, by protecting trade with Iran against the reimposition of U.S. sanctions to dissuade Tehran from quitting the deal.

Under the deal, the Islamic Republic curbed its disputed nuclear energy program and in return won a lifting of most international sanctions that had hobbled its economy.

One of Trump’s demands – which European allies back in principle – is negotiations to rein in Iran’s ballistic missile program, which was not covered by the nuclear deal.

Iranian Supreme Leader Ayatollah Ali Khamenei again said this was non-negotiable. “Some Europeans are talking about limiting our defensive missile program. I am telling the Europeans, ‘Limiting our missile work is a dream that will never come true,” he said in a televised speech.

Trump also objected that the 2015 deal did not address Iran’s nuclear work beyond 2025 or its role in conflicts in Yemen and Syria. Though committed to the deal, European powers share Trump’s concerns and want broader talks with Iran to address the issues.

“Our enemies have staged economic and psychological … warfare against us and new American sanctions are part of it,” Khamenei told a gathering to mark the 29th anniversary of the death of Iranian revolutionary leader Ayatollah Ruhollah Khomeini.

“Tehran will attack 10 times more if attacked by enemies … The enemies don’t want an independent Iran in the region … We will continue our support for oppressed nations,” he said.

Khamenei said Iran had no intention of curbing its influence in the Middle East and urged Arab youth to stand up to U.S. pressure.

“Young Arabs, you should take action and the initiative to control your own future … Some regional countries act like their own people’s enemies,” he said in an allusion to U.S.-allied Gulf Arab states who have supported rebels fighting to topple Syrian President Bashar al-Assad, a close ally of Tehran.

(Writing by Parisa Hafezi; Editing by Mark Heinrich)

Maersk latest company to shun Iran as EU scrambles to save nuclear deal

FILE PHOTO: The Maersk ship Adrian Maersk is seen as it departs from New York Harbor in New York City, U.S., June 27, 2017. REUTERS/Brendan McDermid/File Phot

COPENHAGEN (Reuters) – Shipping group A.P. Moller-Maersk on Thursday joined a growing list of companies preparing to call a halt to doing business with Iran, casting doubts on whether European leaders can keep alive a nuclear deal with Tehran.

Maersk’s move comes a day after French energy group Total and other European companies signaled they could exit Iran ahead of a reimposition of sanctions following the United States’ decision to pull out of the Iran accord.

French President Emmanuel Macron said on Thursday that the European Union must protect European Union companies doing business with Iran from U.S. sanctions.

But Macron, joining EU leaders for a summit in Bulgaria, also said he recognized that big companies would want to protect their own interests.

“International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom,” he said.

U.S. President Donald Trump’s decision to abandon the 2015 nuclear accord with Iran means European countries that have since invested in the country will be at risk once new sanctions come into effect.

Maersk Chief Executive Soren Skou said: “With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the U.S., and we have that on a large scale.”

“I don’t know the exact timing details, but I am certain that we’re also going to shut down (in Iran),” Skou told Reuters in an interview following Maersk’s first-quarter earnings.

MSC, the world’s second biggest container shipping group after Maersk, said on Wednesday it would stop taking new booking for Iran.

Other companies which have warned they would wind down business in Iran following reinstated sanctions include German insurer Allianz, Siemens and Danish oil product tanker operator Maersk Tankers, previously owned by the Maersk conglomerate.

Maersk’s Skou said higher oil prices which followed the U.S. withdrawal were hitting its container shipping business because of higher bunker fuel prices.

Oil prices hit their highest level since November 2014 on Thursday, with Brent crude creeping ever closer to $80 per barrel. [O/R]

(Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen; Editing by Jon Boyle and Jane Merriman)

Merkel defends nuclear deal, Iran says won’t ‘surrender’ to U.S.

German Chancellor Angela Merkel speaks during the 2018 budget debate at the lower house of parliament Bundestag in Berlin, Germany, May 16, 2018. REUTERS/Hannibal Hanschke

By Bozorgmehr Sharafedin

LONDON (Reuters) – German Chancellor Angela Merkel pushed back on Wednesday against Washington’s rejection of the Iran nuclear deal, saying the accord helped outside powers worried about Tehran’s regional role to pursue their concerns with the Islamic Republic.

Iran reiterated it would not surrender to U.S. pressure and would resist U.S. “plots”, following President Donald Trump’s abandonment of the 2015 agreement last week.

Repudiating the result of more than a decade of diplomacy, Trump complained that the deal does not cover Iran’s ballistic missiles, its role in regional wars or what happens after the pact begins to expire in 2025.

Major European countries share Trump’s concerns but argue that the nuclear deal is the best way to stop the increasingly influential regional power from obtaining an atomic weapon.

Merkel reasserted a defense of the deal in remarks to lawmakers in the Bundestag lower house of parliament.

“The question is whether you can talk better if you terminate an agreement or if you stay in it … we say you can talk better if you remain in it,” she said.

“This agreement is everything other than ideal, but Iran is, according to all the knowledge of the international nuclear authorities, sticking to the commitments of the agreement.”

The deal between Iran and six world powers lifted most international sanctions in 2016 in return for Tehran curbing its nuclear program, under strict surveillance by the U.N. nuclear watchdog.

Trump last week announced he planned to reimpose an array of sanctions lifted by the accord, and the U.S. Treasury on Tuesday imposed sanctions on Iran’s central bank governor, three other individuals and an Iraq-based bank.

Iran meanwhile said the new U.S. sanctions were an attempt to derail efforts to save the deal.

“With such destructive measures, the American government is trying to influence the will and decision of the remaining signatories of the JCPOA (nuclear agreement),” Iranian Foreign Ministry spokesman Bahram Qasemi was quoted as saying by Fars news agency.

Iran has described the sanctions as illegal and has warned that if talks to rescue the accord fail, it would ramp up its nuclear program to a level more advanced than before.

Iranian President Hassan Rouhani said Trump expected Tehran to leave the deal after the U.S. withdrawal, but Tehran had refused to follow that plan by trying to save the deal with its remaining signatories.

“Trump played his first card, but miscalculated the second move,” Rouhani was quoted as saying by the ISNA agency.

GUARANTEES

He also said Iran would not surrender to U.S. pressures.

“They think they can make the Iranian nation surrender by putting pressures on Iran, by sanctions and even threats of war… The Iranian nation will resist against the U.S. plots,” Rouhani was quoted as saying by ISNA news agency.

However the top advisor to Iran’s Supreme Leader Ali Khamenei said he doubted Tehran’s talks with European nations to save the deal would be successful.

“I doubt that the talks with the Europeans will be fruitful. I hope we see good results, but …. we should become self-sufficient,” Ali Akbar Velayati said, Fars news agency reported.

European powers this week vowed to shore up the deal by trying to keep Iran’s oil and investment flowing, but admitted they would struggle to provide the guarantees Tehran seeks.

British, French and German foreign ministers met in Brussels on Tuesday to see how they can save the nuclear deal without the United States, but appeared hard-pressed over how their companies could continue doing business with Iran once Washington begins to reimpose sanctions.

Iranian Foreign Minister Mohammad Javad Zarif said his meeting with European Union officials in Brussels had been a good start, but he wanted to see guarantees materialize.

The Europeans and Iranians have tasked experts to come up with measures quickly and will meet again in Vienna next week.

Reuters reported on Wednesday that a senior Iranian official has met Chinese oil buyers this week to ask them to maintain imports after U.S. sanctions kick in.

(Reporting by Bozorgmehr Sharafed, additional reporting by Michelle Martin in Berlin, Editing by Raissa Kasolowsky, William Maclean)

Israel says it attacked targets in Syria after Iranian rocket fire

Missile fire is seen from Damascus, Syria May 10, 2018. REUTERS/Omar Sanadiki

By Dan Williams and Angus McDowall

JERUSALEM/BEIRUT (Reuters) – Israel said it attacked nearly all of Iran’s military infrastructure in Syria on Thursday after Iranian forces fired rockets at Israeli-held territory for the first time.

It was the heaviest Israeli barrage in Syria since the start in 2011 of its war, in which Iranians, allied Shi’ite Muslim militias and Russian troops have deployed in support of President Bashar al-Assad.

The Syrian Army Command said Israel’s attack killed three people and injured two others. A Britain-based war monitor, the Syrian Observatory for Human Rights, said the strikes killed at least 23 military personnel, including Syrians and non-Syrians.

The White House, in a statement, condemned Iran’s “provocative rocket attacks” from Syria and said it supported Israel’s right to defend itself.

Expectations of a regional flare-up, amid warnings from Israel that it was determined to prevent any Iranian military entrenchment in Syria, were stoked by U.S. President Donald Trump’s announcement on Tuesday that he was withdrawing from the 2015 nuclear deal between Iran and world powers.

The Trump administration portrayed its rejection of that agreement as a response, in part, to Iran’s military interventions in the Middle East, underpinning Israeli Prime Minister Benjamin Netanyahu’s tough line towards Tehran.

Israel said 20 Iranian Grad and Fajr rockets were shot down by its Iron Dome air defense system or did not reach targets in the occupied Golan Heights, territory captured from Syria in a 1967 war.

The Quds Force, an external arm of Iran’s Revolutionary Guards, carried out the rocket salvo, Israel said.

There was no immediate comment from Iran.

Iran and Israel were already drawing deeper into confrontation before Trump pulled the United States out of the deal, but his move has shaken up the region. Within Iran, it could empower hardliners while weakening the moderate camp that has sought better relations with the West.

Syrian state media said Israel launched dozens of missiles and hit a radar station, Syrian air defense positions and an ammunition dump, underscoring the risks of a wider escalation involving Iran and its regional allies.

“We hit … almost all of the Iranian infrastructure in Syria,” Israeli Defence Minister Avigdor Lieberman said at the annual Herzliya security conference near Tel Aviv. “I hope we finished this chapter and everyone got the message.”

Lieberman said the Iranian rockets either fell short of their targets – military bases in the Golan – or were intercepted.

The White House said: “The Iranian regime’s deployment into Syria of offensive rocket and missile systems aimed at Israel is an unacceptable and highly dangerous development for the entire Middle East.”

The Syrian foreign ministry said the Israeli attack indicated “the start of a new phase of aggression” against Damascus.

Israeli soldiers are seen in the Israeli-occupied Golan Heights, Israel May 10, 2018. REUTERS/Ronen Zvulun

Israeli soldiers are seen in the Israeli-occupied Golan Heights, Israel May 10, 2018. REUTERS/Ronen Zvulun

CALLS FOR RESTRAINT

Thursday’s exchange followed a suspected Israeli rocket strike in Syria on Tuesday on a military base in Kisweh, hours after Trump’s announcement on the nuclear deal.

The Syrian Observatory for Human rights said 15 people, including eight Iranians, were killed in that attack. A commander in the pro-Syrian government regional alliance said there were no casualties. Israel, as it has typically done in similar incidents, neither confirmed nor denied a role.

France urged Iran on Thursday to refrain from all “military provocation” and cautioned it against “all temptations for regional hegemony”.

Russia, which is generally friendly to Israel but fights in Syria’s civil war on the same side as Iran, called on both to show restraint and resolve differences through diplomatic means.

Israeli military spokesman Lieutenant-Colonel Jonathan Conricus said Israel destroyed dozens of Iranian military sites in Syria, as well as Syrian anti-aircraft units that tried unsuccessfully to shoot down Israeli planes.

He said the military focused on inflicting “long-term damage on the Iranian military establishment in Syria” and assessed “it will take a substantial time to replenish”.

Russia’s defense ministry said Syria had shot down more than half of the missiles fired by Israel, RIA news agency reported.

In the Golan, Israeli schools opened as usual on Thursday morning after sirens sent residents to shelters overnight.

The Israelis fear that Iran and its Lebanese ally Hezbollah are turning Syria into a new front against them. Israel says its occasional strikes in Syria aim to prevent such an outcome.

Iran vowed retaliation after a suspected Israeli air strike last month killed seven of its military personnel at a Syrian air base. Israel regards Iran as its biggest threat and has repeatedly targeted Iranian forces and allied militia in Syria.

(Additional reporting by Jeffrey Heller in Jerusalem; Dahlia Nehme and Tom Perry and Ellen Francis in Beirut; Writing by Jeffrey Heller and Angus McDowall; Editing by Tom Perry, Mark Heinrich and Peter Graff)

Europeans scramble to save Iran deal after Trump reneges

U.S. President Donald Trump displays a presidential memorandum after announcing his intent to withdraw from the JCPOA Iran nuclear agreement in the Diplomatic Room at the White House in Washington, U.S., May 8, 2018. REUTERS/Jonathan Ernst

By Yara Bayoumy and Brian Love

WASHINGTON/PARIS (Reuters) – Dismayed European allies sought to salvage the international nuclear pact with Iran on Wednesday after President Donald Trump pulled the United States out of the landmark accord, while Tehran poured scorn on the U.S. leader.

“The deal is not dead. There’s an American withdrawal from the deal but the deal is still there,” French Foreign Minister Jean-Yves Le Drian said.

Iranian Supreme Leader Ayatollah Ali Khamenei, who had been reluctant to back the deal, said: “Mr Trump, I tell you on behalf of the Iranian people: You’ve made a mistake…I said many times from the first day: don’t trust America.”

French President Emmanuel Macron was due to speak later in the day to his Iranian counterpart Hassan Rouhani, Le Drian said. Iran also signaled its willingness to talk.

Trump announced on Tuesday he would reimpose U.S. economic sanctions on Iran to undermine what he called “a horrible, one-sided deal that should have never, ever been made”, which was “defective at its core”.

The fruit of more than a decade of diplomacy, the agreement was concluded in 2015 by the United States, France, Britain, Germany, Russia, China and Iran.

It was designed to prevent Iran obtaining a nuclear bomb in return for lifting sanctions that had crippled its economy.

Trump complained that the deal, the signature foreign policy achievement of his Democratic predecessor, Barack Obama, did not address Iran’s ballistic missile program, its nuclear activities beyond 2025 or its role in conflicts in Yemen and Syria.

His decision raises the risk of deepening conflicts in the Middle East, puts the United States at odds with European diplomatic and business interests, and casts uncertainty over global oil supplies. Oil prices rose more than 2 percent, with Brent hitting a 3-1/2-year high. [O/R]

The deal could also strengthen the hand of hardliners at the expense of reformers in Iran’s political scene.

“REGION DESERVES BETTER”

France’s Le Drian, German Chancellor Angela Merkel and the International Atomic Energy Agency (IAEA) all said Iran was honoring its commitments under the accord.

“The region deserves better than further destabilization provoked by American withdrawal,” Le Drian said.

The European Union said it would remain committed to the deal and would ensure sanctions on Iran remain lifted, as long as Tehran meets its commitments.

The Kremlin said Russian President Vladimir Putin was “deeply concerned” by the withdrawal, the RIA news agency said

Merkel said that, while the existing deal should not be called into question, there should be discussion of “a broader deal that goes beyond it”. British Foreign Secretary Boris Johnson spoke of a “follow-on agreement” but said it was now up to Washington to come up with concrete proposals.

Macron’s contact with Rouhani will be followed by meetings next week involving the Iranians and European counterparts from France, Britain and Germany.

But Iran’s Khamenei appeared skeptical, saying: “I don’t trust these three countries.”

The prospects of saving the deal without Washington depends in large part on whether international companies are willing and able still to do business with Iran despite the U.S. sanctions.

Le Drian said meetings would be held with major firms including oil giant Total <TOTF.PA>.

In a harbinger of what could be in store, Trump’s new ambassador to Germany said German businesses should halt their activities in Iran immediately.

French Finance Minister Bruno Le Maire said the United States should not consider itself the world’s “economic policeman”. Britain and France said they would do their utmost to protect their business interests in Iran, while Germany said it was seeking details of the effect of U.S. sanctions.

European companies including carmaker PSA <PEUP.PA>, plane manufacturer Airbus <AIR.PA> and engineering group Siemens <SIEGn.DE> said they were watching the situation.

In a speech carried on his official website, Khamenei said Trump’s announcement had been “silly and superficial”, adding: “He had maybe more than 10 lies in his comments.”

“DEATH TO AMERICA!”

Lawmakers in Iran’s parliament burned a U.S. flag and a symbolic copy of the deal, known officially as the Joint Comprehensive Plan of Action (JCPOA), chanting “Death to America!”.

President Hassan Rouhani, a reformist who had hoped that the deal would boost living standards in Iran, struck a more pragmatic tone in a televised speech, saying Iran would negotiate with European Union countries, China and Russia.

“If at the end of this short period we conclude that we can fully benefit from the JCPOA with the cooperation of all countries, the deal will remain,” he said.

Trump’s decision adds to the strain on the transatlantic alliance since he took office 16 months ago. One by one, European leaders came to Washington and tried to meet his demands, while pleading with him to preserve the deal.

The Trump administration kept the door open to negotiating another deal with allies, but it is far from clear whether the Europeans would pursue that option or be able to convince Iran to accept it.

China’s foreign ministry said Beijing would defend the deal and urged parties “to assume a responsible attitude”.

A Western diplomat who declined to be named was more pointed about the decision. “It announces sanctions for which the first victims will be Trump’s European allies,” the diplomat said, adding that it was clear Trump did not care about the alliance.

Abandoning the pact was one of the most consequential decisions of Trump’s “America First” policy, which has led him to quit the global Paris climate accord, come close to a trade war with China and pull out of an Asian-Pacific trade deal.

It also appeared to reflect the growing influence within the administration of Iran hawks such as new National Security Adviser John Bolton and Secretary of State Mike Pompeo, who arrived in Pyongyang on Wednesday to prepare for a summit that Trump hopes will secure North Korea’s denuclearisation.

COMPLYING WITH DEAL

Iran denies long-held Western suspicions that it tried in the past to develop atomic weapons and says its nuclear program is for peaceful purposes.

Senior U.S. officials themselves have said several times that Iran is in technical compliance with the pact.

Renewing sanctions would make it much harder for Iran to sell its oil abroad or use the international banking system.

Iran is the third-largest member of the Organization of the Petroleum Exporting Countries and pumps about 3.8 million barrels per day of crude, or just under 4 percent of global supply. China, India, Japan and South Korea buy most of its 2.5 million bpd of exports.

Its rial currency plunged to a record low against the U.S. dollar in the free market, after sliding for months because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who feared that renewed U.S. sanctions would hit Iranian exports hard.

“I am scared,” 47-year-old Isfahan school teacher Morad Sabzevari said by telephone. “I listened to Trump’s speech on English news channels last night…It was a declaration of war against Iran … It means dark days and months are ahead of us.”

The U.S. Treasury says sanctions related to Iran’s energy, auto and financial sectors will be reimposed in three and six months.

U.S. Treasury Secretary Steve Mnuchin said a license for Boeing Co <BA.N> to sell passenger jets to Iran will be revoked, scuttling a $38 billion deal. The ban will also hit Europe’s Airbus <AIR.PA>, whose planes contain U.S.-made parts.

Trump said the nuclear agreement did not prevent Iran from cheating and continuing to pursue nuclear weapons.

“It is clear to me that we cannot prevent an Iranian nuclear bomb under the decaying and rotten structure of the current agreement,” he said.

Trump said he was willing to negotiate a new deal with Iran, but Iran has already ruled that out.

Iran’s growing military and political power in Yemen, Syria, Lebanon and Iraq worries the United States, Israel and Washington’s Gulf Arab allies such as Saudi Arabia.

Among the few nations to welcome Trump’s decision were Israel and Saudi Arabia, Iran’s arch-foes in the Middle East.

Less than 24 hours after Trump’s announcement, Saudi Arabia said it had intercepted missiles fired at Riyadh by the Iran-aligned Houthi forces it is fighting in Yemen.

(Reporting by Steve Holland; Additional reporting by Tim Ahmann, Makini Brice, Warren Strobel, Jonathan Landay and Arshad Mohammed, Patricia Zengerle, David Lawder, Mohammad Zargham in Washington, Ayenat Mersie in New York, Sybille de La Hamaide, John Irish and Tim Hepher in Paris, Parisa Hafezi in Ankara, David Milliken and Bozorgmehr Sharafedin in London and Andrew Torchia in Dubai; Writing by Angus MacSwan and Kevin Liffey)