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The Fuze is Lit - 31 July 2024 - assassination of Ismail Haniyeh

Iran vowed to respond to Israel after the assassination of Hamas political bureau chief Ismail Haniyeh in Tehran on 31 July 2024. Iran vowed to respond to Haniyeh's killing on its soil, which it accuses Israel of being responsible for, hours after Hezbollah military commander Fouad Shukr was killed in an Israeli strike in Beirut's southern suburbs.

Haaretz newspaper ruled out Iran's revenge against Israel for the killing of Hamas leader Ismail Haniyeh on its territory in the near future. Haniyeh was killed during his visit to the Iranian capital, Tehran. It explained that the time that has passed, in addition to the Revolutionary Guards’ statements that “time is on our side” to respond but without strengthening the position of Israeli Prime Minister Benjamin Netanyahu, in addition to the economic deterioration that Tehran is suffering from, are all factors that have led to fueling these speculations in the West that rule out a response from Iran to the killing of Haniyeh.

The newspaper presented a number of statements by current and former Iranian officials that confirm the validity of its assumption. Mohsen Rezaei, the former head of the Iranian Revolutionary Guard, said in an interview with CNN, "We have investigated the possible consequences. We will not allow Netanyahu, who is drowning in the quagmire, to save himself. Iranian measures will be very calculated." The newspaper reported that Ali Mohammad Naeini, spokesman for Iran’s Revolutionary Guards, adopted a similar tone. “Time is on our side and the wait for this response may be long,” he said, according to Iranian state media.

According to the newspaper, these statements, and the time that has passed since Haniyeh's assassination, attributed to Israel, at the official guesthouse of the Revolutionary Guards in Tehran, have fueled speculation in the West that Iran is not planning to launch an attack on Israel anytime soon.

Few disputed that Washington’s show of force, which included the transfer of aircraft carriers and missile boats that are now temporarily using the Mediterranean as a base, played a major role in influencing the “potential repercussions” that Rezaei spoke of, in addition to the public warnings issued by US President Joe Biden to Iran, as well as the intensive diplomatic efforts made by the US administration, through other regional players such as Qatar, Saudi Arabia, Oman, Turkey and the UAE.

Each of these countries is of great importance to Tehran’s decision-making process, the newspaper says, because they are crucial to its foreign policy strategy, which seeks to position Iran as a “regional friend” that poses no threat to its neighbors. This policy was set by Iran’s Supreme Leader Ali Khamenei, and former President Ebrahim Raisi sought to implement it until he was killed in a helicopter crash in May.

According to the newspaper, Tehran has gone to great lengths to make clear that this strategy has not changed even after the missile and drone attack it launched on Israel in April in response to the assassination of Mohammad Reza Zahedi, the commander of the Revolutionary Guards’ Quds Force in Syria and Lebanon. The newspaper reported that Iran portrayed the attack as a “calculated response” that was not intended to ignite a regional war. Moreover, it said that Iran had a “legitimate right” to defend its sovereignty, as Zahedi was killed in a building belonging to the Iranian consulate in Damascus, which, like every embassy and consulate, is considered the sovereign territory of its owner.

The newspaper spoke about a number of internal reasons that prevent Tehran from taking any action that would lead it into a war that it currently does not need, stating that while Iran has developed impressive technologies, profits from exporting drones to Russia (the cost of producing an Iranian Shahed 136 drone ranges between $20,000 and $50,000, and is sold to Russia for about $190,000), and exports oil to China, it is still far from covering its current needs. According to the newspaper, an IMF report in April estimated that Iran needs oil prices of $121 per barrel to maintain a balanced budget. This week, the price per barrel was around $79 and is expected to fall. Moreover, according to Reuters, Iran is giving China a discount of $13 per barrel, and its chances of bridging the gap are slim unless a global oil crisis suddenly occurs.

The central bank of Iran said the government and its subsidiaries owe about $118 billion, about $4 billion more than last year. Iran’s remedy is to borrow from the National Development Fund, an emergency fund that the government has been barred from borrowing from in the past. The amount of money in the fund is unknown, but according to reports from Iran, the government has already received a $100 billion loan from it, the newspaper reported.

The newspaper reported that Iran is using another mechanism excessively: printing money, a move that has flooded the markets with greatly devalued rials and caused inflation to rise, which is now officially estimated at 42%. However, the inflation rate does not fully reflect the rise in prices. A World Bank report released in June forecasts annual economic growth this year of just 3.2%, down from 5% last year. Next year growth is expected to be just 2.7%.

A survey conducted by the Presidential Research Center provided bleak data on the plans of Iranian students, professionals, businessmen, investors and entrepreneurs to emigrate. The main reasons for wanting to leave Iran are listed as inflation, unemployment and lack of economic prospects. Frequent power outages can be added to this list, the newspaper reported, citing news this week that the regional power plant in Khorasan Razavi province ordered stations to cut power consumption by dozens of percentage points for two weeks. This is a bombshell that the new president, Masoud Pezeshkian, must defuse.

Various reports have indicated that Pezeshkian urged Khamenei not to launch an attack on Israel so as not to plunge the country into economic turmoil. If such a conversation took place, the president is presumed to have told Khamenei about the implications such a war could have on his legacy, and perhaps even reminded him of the consequences of the Iran-Iraq War, in which he participated, according to the newspaper.

The newspaper considered these concerns as rational considerations for Iran to refrain from a comprehensive conflict at the beginning of the Gaza war, but it is difficult to assess the extent of the weight of the insult and the desire for revenge that Iran feels.

The Islamic Revolutionary Guard Corps (IRGC) said Israel would face severe consequences if it retaliated. In response, the IDF vowed to strike Iran “at a time and place” of its choosing. Tehran claimed the attack was retribution for the assassinations of Hezbollah Secretary-General Hassan Nasrallah and Hamas Political Bureau Chairman Ismail Haniyeh. Iran’s permanent representative to the UN added that the strike was legitimate retaliation for violations of Iran’s sovereignty (the attack on Haniyeh occurred in Iran’s capital, Tehran). Iran waited nearly two months to respond to Haniyeh’s assassination, and during this time, many people wondered whether Tehran would avenge the death of its political ally. Clearly, the time for action had come, and with one strike, Iran addressed two issues that troubled many people both within and outside the country. Evidently, Iran wants to avoid being pulled into a larger war – not because it fears Israel, but because, unlike the latter, it recognizes that in an apocalyptic scenario, there would be no victors.