A simmering regional standoff between the US and Iran shifted from the high seas to dry land over the past two weeks, as street protests from Beirut to Baghdad challenge existing political orders and alliances.

The Trump administration’s “maximum pressure” campaign, aimed at bringing the Islamic Republic to its knees, hit the rocks in the Persian Gulf over the summer. Explosions targeting oil tankers – capped by a precision attack on Saudi Aramco in September – drove home the message to Arab monarchies that their own interests would suffer should they continue to egg on the US campaign.

But in October, first in Iraq and then in Lebanon, nationwide street protests erupted against dire economic conditions and endemic corruption of sectarian political elites.

In both countries, allies of Iran play a dominant role in government while the US exerts significant influence on the military and political spheres.

“Popular protests in the Middle East cannot be separated from the confrontation that is going on between the two powers,” said Noam Raydan, a Baghdad-based geopolitical analyst at ClipperData.

The Trump administration in May of last year withdrew from the Iran nuclear deal, setting the stage for a resumption of crippling sanctions, with the goal of driving Iran’s critical petroleum exports to zero.

“We cannot forget the pressure being put on Iran right now,” Raydan told Asia Times.

Iranian navy boats run rings around the UK tanker Stena Impero in a July 20 screenshot from Fars News Agency.

Maximum pressure

As leaderless street revolts threaten to morph into protracted political upheaval in Lebanon and Iraq, alarm bells are going off in Tehran. “It cannot lose what it has gained over the past years,” said Raydan.

Iraq is of paramount importance, being not only neighbor and OPEC member, but most crucially a holder of a US sanctions waiver that allows for the continued import of Iranian energy supplies.

“And we can’t forget, Iranian policymakers and leaders today were all shaped by the Iran-Iraq war. They want to ensure that Iraq never poses the kind of threat to Iran that it did,” said veteran journalist and NYU professor Mohamad Bazzi.

The Trump administration has called on the Iraqi government to rein in Iran-backed paramilitaries, with Secretary of State Mike Pompeo visiting Prime Minister Adel Abdul Mahdi in May.

Iraqi protesters last weekend torched the offices of several Iran-backed paramilitary groups in the southern provinces, sparking calls for vengeance and finger-pointing at the United States. In some cities, Iraqi protesters have shouted slogans calling on Iran to leave.

Those paramilitaries are accused of participating in the crackdown against protesters, which left nearly 250 people dead in October alone, according to the Iraqi Human Rights Commission. Attempts to forcefully disperse the demonstrations, including with live ammunition and tear gas canisters fired at peoples’ heads, has only swelled their numbers, with growing participation by women and schoolchildren.

“The people have justifiable demands, but they should know their demands can only be fulfilled within the legal structure and framework of their country,” Iran’s supreme leader, Ayatollah Ali Khamenei, tweeted on Wednesday. 

He was speaking about not only Iraq, where the prime minister could soon be compelled to step down, but also Lebanon.

Iraqi demonstrators stand above a high rise (foreground) and at Tahrir Square in Baghdad during ongoing anti-government demonstrations on October 28, 2019. Photo: AFP

Hezbollah allies threatened

In Lebanon, the first night of the October protests saw working-class people block intersections with burning tires, in outrage over new taxes to be levied on fuel and free internet calling services.

“Shiites were at the forefront of the original protests,” said Amal Saad, a professor of political science at Lebanese University.

Saad, who is writing a forthcoming book on Hezbollah’s evolution into regional power, says the group’s fear is that the current nationwide outrage could be channeled into an anti-Hezbollah agenda – specifically targeting its arms.

In May, Mike Pompeo traveled to Beirut where – standing side-by-side with his Hezbollah-allied counterpart, Gibran Bassil – he labeled Hezbollah a threat to Lebanon and called for the Lebanese people to rise up against it.

Four months later, when Bassil traveled to Washington on the heels of the UN General Assembly, he found no administration official willing to hold court.

When mass protests broke out in Lebanon two weeks ago, one of the first chants to catch fire directly targeted Bassil.

In Hezbollah’s view, Saad says, the US seized the moment to pressure Bassil – the rising star of President Michel Aoun’s party – out of the cabinet. When Aoun refused, Prime Minister Saad Hariri resigned from his post. His return is now believed to be contingent on Bassil leaving.

“Bassil was the person that the Americans wanted to get rid of,” Saad told Asia Times. “As a foreign minister, he is kind of like an ambassador for Hezbollah.”

With the combination of Bassil representing a Christian nationalist constituency, and Hariri catering to the West and Gulf Arabs, “we have a Lebanese government that is giving political and legal cover for Hezbollah – and even international legitimacy,” she said. 

Hezbollah throwing Bassil under the bus would have torpedoed a more than decade-old alliance. At the same time, the Shiite party needs Hariri in its corner to avert Lebanon becoming a regional and global pariah.

Bazzi, who has a forthcoming book on regional proxy wars, notes that while Hariri provides international cover for Hezbollah, a staunch defender like Bassil could be impossible to replace.  

“Nasrallah obviously is in a very delicate position because if he completely overlooks Hariri and tries to form a government without him, it could subject Lebanon to US sanctions,” said Saad. 

A Lebanese woman wearing an orange scarf, the color of Michel Aoun’s party, takes pictures of Hezbollah supporters waving the Shiite Muslim movement’s yellow flags and pictures of its chief Hassan Nasrallah during a rally in a southern Beirut suburb on August 14, 2009. Photo: Ramzi Haidar / AFP

No bailout coming

Neighboring Israel is meanwhile lobbying the US to prevent any future Lebanese government from including its Shiite rival, and urging that aid be halted “as long as Hezbollah is part of the Lebanese government.”

“Israel is very concerned that Hezbollah will develop an industrial capacity of manufacturing precision missiles, which could pose a significant threat to its military bases and strategic sites,” journalist Barak Ravid reported for Israel’s Channel 13 news.

While President Trump has shown an aversion to Middle East commitments, his administration has embraced economic sanctions as a tool of war.

The Trump administration is now reportedly withholding $105 million in security aid to Lebanon, Reuters said Friday citing two unnamed officials.

Already, Lebanon’s economy was in dire straits with the central bank in recent years relying on “financial engineering” to attract hard currencies from the banking sector, in exchange for immediate profits in Lebanese pounds in the form of high interest rates.

The banks have made billions in profits since 2016 through this mechanism, paid for by increasing public debt, with the goal of propping up the sacrosanct peg to the dollar.

Lebanon’s central bank governor Riad Salameh warned Monday the country had only “days” to find a political solution to avert financial disaster.

The US and Saudi Arabia, to which Lebanon could historically turn for a bailout, appear to be allowing the country to approach the precipice before they step in to negotiate any sort of compromise.

President Aoun on Thursday called for any new government comprised of ministers chosen on “merit, not political affiliations.”

Lebanese banks opened on Friday morning for the first time in two weeks, instituting varied daily or weekly limits on dollar withdrawals. Overseas transfers were being carried out on a case by case basis, depending on client’s track records and requirements.

Salim Sfeir, the president of the Association of Banks in Lebanon, hailed the citizenry for demonstrating “awareness and responsibility”– not panic – in their transactions. 

Hezbollah leader Hassan Nasrallah speaks Friday at 2:30pm.