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In recent weeks, Iran and its proxies have begun operating under a new directive best described as a policy of controlled escalation. Still, the potential for miscalculation and region-wide conflict has grown considerably.
Responding to the chokehold of U.S. sanctions put in place by the Trump administration, Tehran, together with its non-state militias and terrorist entities, initiated a series of aggressive acts throughout the Middle East.
These include the targeting of oil tankers in the Gulf of Oman with mines by a naval Islamic Revolutionary Guards Corps (IRGC) squad, and last month, the targeting of oil tankers docked at a United Arab Emirates' port in the Strait of Hormuz.
Such attacks are a clear threat, aimed at showing off Iran's ability to disrupt international oil-shipping traffic. In addition, IRGC forces fired a missile at a U.S. intelligence drone. Meanwhile, Iranian proxy militias in Iraq and Syria were likely behind the firing of rockets recently at the U.S. embassy in Baghdad and at Israel's Golan Heights.
In addition, the Iranian-backed Houthis in Yemen launched cruise-missile and explosive drone attacks against sensitive targets in Saudi Arabia, hitting airports and oil facilities.
Behind all of the actions is a single message. If U.S. sanctions continue to damage the Iranian economy, the Islamic Republic is prepared to wreak havoc in response. Iran is demonstrating its ability to threaten oil exports by Washington's Arab allies. It is effectively holding the global oil market hostage, in addition to implicitly threatening to step up attacks on Israel.
According to a Hebrew-language report published on Sunday by the Middle East Media Research Institute (MEMRI), Iran has used terror factions in Gaza to send threatening messages in response to its standoff with America.
Examples include speeches delivered by Hamas chief Yahya Sinwar and Palestinian Islamic Jihad secretary-general Ziad Al-Nakhleh. Both released threatening statements outlining what the next conflict with Israel would look like and boasted about growing rocket arsenals at their disposals. Both terrorist leaders praised Iranian support for their respective organizations.
Sinwar and Al-Nakhleh delivered their speeches in a manner designed to line up with Iran's Quds Day, held on the last Friday of Ramadan, in which the regime in Tehran organizes rallies to call for Israel's destruction.
MEMRI interpreted the speeches by Sinwar and Al-Nakhleh as "a threatening message from Iran, via its proxies, against the U.S. and its allies, after the failure of indirect talks between Iran and the U.S. over the Iranian nuclear program." The statements echoed similar statements that came out of Iran itself on Quds Day, in what looks to be a coordinated influence campaign.
Planning to increase uranium enrichment
The Iranians are not rushing into war and are aware of America's superior military might. The Iranians have also tasted Israel's advanced capabilities in the form of large numbers of precision airstrikes in Syria that have destroyed many of their assets.
Instead, Iran wishes to frighten the international community, divide it and intimidate Europe into finding ways for protection from American sanctions.
The European Union has already tried (and failed) to set up a special financial mechanism to allow companies to bypass the sanctions; however, the threat of U.S. penalties has been overwhelming, and this effort failed.
European countries still have time to defend Iran from American sanctions, but they must act immediately, the spokesman for Iran's nuclear agency, Behrouz Kamalvandi, warned on Monday. His statement is an indication of Iran's short-term end game. Iran has given Europe until July 7 to do this.
After that, more severe Iranian violations of the nuclear agreement should be expected.
A longer-term objective for Iran seems to rest on waiting to see whether U.S. President Trump is re-elected in 2020 before taking any truly irreversible decisions.
In the meantime, the Iranians are preparing the option of leaving the nuclear agreement and restarting its nuclear program.
On Monday, Iran warned that it could begin enriching uranium to 20 percent, significantly higher than the 3 percent it is allowed under the terms of the 2015 nuclear deal. Tehran also increased the rate of uranium enrichment and stopped shipping excess uranium abroad, as it is obligated to do.
Between the lines, Iran's warning seems stark. If a strained economy causes instability at home, the Islamic Republic could prefer plunging the region into war in order to save itself, and in doing so rally Iranians around the flag.
The calculation behind such a move is that the Iranian regime would likely survive a U.S. air campaign, despite the massive damage it would incur. But it might not survive an uprising at home.
This, then, is Iran's response to the massive economic pressure it is under. After America cancelled waivers to countries that import Iranian oil, Tehran took the decision to embark on a policy of controlled escalation.
Iranian Supreme Leader Ayatollah Khamenei and the IRGC seem to be controlling Iran's posture, rather than the reformist camp and President Hassan Rouhani. The reformist camp's proposal to rescue the Iranian economy from sanctions and isolation by signing a nuclear deal with the international community in 2015 has been discredited in the eyes of Khamenei and the IRGC.
As tensions in the Persian Gulf rise, they also project outwards, to other areas of the Middle East. Iran controls powerful, heavily armed proxies, and it could activate any number of them as part of a new escalation.
Israel, for its part, has made it clear that it will not tolerate a situation in which Iran restarts its nuclear program.
Israeli Prime Minister Netanyahu said should that happen, the international community will have to immediately activate snapback sanctions, and "in any case, Israel will not allow Iran to obtain nuclear weapons."