Iran's Permanent Mission to the United Nations, referencing a recent Politico report about the hacking of Donald Trump's election campaign, has denied any intention to interfere in the US presidential election.
General Joseph Votel retired four-star US Army General and commander of US Centcom from March 2016 to 2019 and now Senior Fellow on National Security at MEI, and Firas Maksad Senior Director for Strategic Outreach and Senior Fellow, MEI were the speakers. They laid out the implications of the most recent rise in hostilities between Israel and Iran and its affiliated proxies. Also discussed were scenarios of Israel's strategic assessments, the risk of the US being drawn into a broader regional conflict, and the aftermath of Haniyeh's death on Hamas' future.
In his opening comments Firas Maksad said: “Israel has successfully gained escalation dominance in this conflict; essentially projecting out to the world and warring parties that it is ready to take the next step up the escalatory ladder, should it come to it. Iran and Hezbollah have lost quite a bit of their deterrence, as their response on April 13th was not enough to pause,” he added: “I think in fact the Israeli Prime Minister Benjamin Netanyahu has been quite successful in putting both Iran and Hezbollah in a Catch 22 type situation. A policy dilemma.”
Maksad described the closing ring on fire that Iran and its proxies have established around Israel and that it is very real. This is a strategic argument that can be made for a war by Israel. Politically, Netanyahu is embattled, his political future hangs in the balance and many in Israel will say that [Netanyahu] doesn’t have much of an interest in reaching a ceasefire with Hamas in Gaza and he is at odd with most of his intelligence and security chiefs who believe that a deal can be had.” He added: “The answer to the million-dollar question as to whether Netanyahu is looking for a broader war; there are many reasons and justifications as to why the answer to that might be yes.”
He outlined three potential scenarios:
1. Limited Response: The least likely scenario involves a coordinated but fairly limited response from Iran and Hezbollah. Back-channel diplomacy, such as efforts by the Jordanian prime minister, has emphasized de-escalation and warned Tehran that Jordan would prohibit the passage of Iranian missiles and drones through its airspace. Saudi Arabia has reportedly conveyed a similar message to Iran.
2. Escalated Conflict from Lebanon: The second scenario, which may be the most likely, involves increased missile fire from Lebanon. Given Lebanon's proximity to Israel, this incoming fire would be harder to block. Hezbollah possesses over 1,000 missiles, many equipped with precision-guided kits, and the US and its allies might not have the same advance warning as they did on April 13. In this case, Israel would likely retaliate strongly, potentially launching a major operation into Lebanon.
3. Wider Regional Conflict: The third and most catastrophic scenario involves Iran following through on its repeated promises to defend Hezbollah if Israel launches a major offensive. Hezbollah is Iran’s most significant foreign investment, with over 40 years and billions of dollars spent on arming, training, and equipping what is considered the most formidable non-state military actor in the world. As Hezbollah serves as a first line of defense for Iran's nuclear program, this scenario could lead to a much broader and more devastating conflict.
In his opening comments Votel pointed out that US influence in the region has diminished which is not unexpected. He explained: “Our desire to put more focus on the Pacific and to reduce our presence in the Middle East which was done to large extent through cessation of operations in Afghanistan, Iraq and Syria, though there are still 2500 troops on in the region.”
He emphasized that Iran’s response will not be limited to actions in the Levant and that the IRGC’s global network can exact costs in other parts of the world.
Maksad argued that Hezbollah does not want to see an escalation of the conflict. Given the events of the last week, Lebanon is no longer a secondary front and in danger of becoming the primary front. He explained that there are many reasons why Hezbollah does not want to fight a head on war with Israel. The most important reason being that Hezbollah’s primary sponsor does not want to see it spent in such a war and wants to keep that power in case of any potential Israeli attack on Iran proper. Lebanon is still staggering from the financial collapse of 2019 and the Shia community in Lebanon does not want to see a war that could be devastating for Beirut being fought for Palestinians and Hamas.
A viewer asked: What are the chances and the consequences of the war spreading to the entire region and the GCC, impacting energy flow through the strait of Hormuz. Votel replied saying that it will certainly impact shipping, market and insurance prices and will have an overall decrease of the movement of goods out of the region.
Maksad and Votel who have recently returned from touring countries in the region, including the CENTCOM facilities in the area. Maksad argued that it is unescapable for the GCC countries not to be impacted. According to Maksad, Saudi Arabia is laser focused on Yemen, the Houthis and their participation in any forthcoming escalation. The regional countries have done their utmost to sit this war out which is very difficult for them. The Red Sea is vital and so much of what the Crown Prince Mohammad Bin Salman, envisioned, into turning the country into a logistical trade hub by 2030 whose logistical trade is around the Red Sea through which 15% of the global commerce goes through. The UAE, Qatar, Saudi Arabia are firm US partners and allies, but they cannot continue to hedge if the issue expands into the Persian Gulf as well.
Maksad argued that if the reports of the their readiness of providing Iran with a significant air defense as possible, such as the S400 to help defend against incoming Israeli attacks, will underscore what many including Maksad and Votel have said all along to the Biden administration which is it is not possible to push back against Russia and the rise of China and not be involved in the Middle East. Russia is stepping back in in a significant way and this will give credence to not only the Israeli argument but other American allies in the region, that America needs to be more involved.
Mohammad-Reza Bahonar, a member of the Expediency Discernment Council, has suggested a potential 25-fold increase in gasoline prices, while the deputy minister of Economy has urged that the price of bread needs to be raised.
Over the past three years, the Islamic Republic has sharply increased the prices of certain energy carriers and lifted price controls on flour used for non-traditional breads and pasta. Even the price of traditional bread, which is subsidized by the government, has been raised in two stages, amounting to an approximate 70% increase.
This week, the Court of Audit reported widespread government violations in subsidy allocations, specifically noting 730 trillion rials (approximately 1.2 billion USD), related to bread subsidies. Additionally, the government has forced the Central Bank to withdraw 315 trillion rials ($500 million) from the accounts of certain government agencies and illegally allocate it to partially settle the government’s debt to private wheat farmers.
Despite these extensive violations, the government still owes wheat farmers 1,160 trillion rials ($2 billion dollars) as the harvesting season has been completed and producers desperately need money.
Iran’s wheat market
According to The Food and Agriculture Organization of the United Nations (FAO) statistics, Iran consumes 16.5 million tons of wheat annually. Iranian state statistics also show that 10 million tons of this amount is supplied to traditional bakeries, while the rest is sold at free market prices to other consumer sectors, such as free market bread and pasta production units. Farmers sell an additional 3.5-4 million tons on the free market.
In traditional bakeries, 80% of the final bread price is covered by government subsidies, with the citizens paying 20% of the actual bread price.
Last year, Iran imported 2 million tons of wheat, and FAO forecasts this figure will rise to 3 million tons this year.
Over the years, Iranian wheat farmers have preferred to sell their wheat on the free market due to low government purchase prices and delays in settling their debts. Last year, one-quarter of their wheat production was sold on the free market, especially to poultry farms.
Last year, the government paid 130,000 rials per kilogram of wheat to domestic farmers, while the average global wheat price was around 34 cents, equivalent to 160,000 rials (based on last year's dollar rate). Due to sanctions and increased costs of purchasing and transporting wheat, Iranian government also spent 250,000 rials (50 cents) per kilogram for imported wheat, the Iran Custom statistics indicate.
This year, the government has increased the wheat price purchase from domestic farmers by 34% year-on-year, but Iranian rial also has lost 20% of its value comparing to last year. On the other hand, the costs for electricity, fuel, fertilizers, labor, and services in agriculture sector have also seen significant increases.
Islamic Republic officials have accused the public of wasting bread over the years, suggesting that increasing its price is necessary to reduce consumption.
The point is that although Iran's per capita wheat consumption is 2.5 times the global average, but only 60% of this wheat is supplied to traditional bakeries that use government subsidies.
Bread has always been an important staple in the Iranian diet. For context, Iran, Turkey, and Germany have similar populations, yet Iranians consume 27% less bread than Turks and 2.5 times more than Germans. When it comes to rice, Iranians consume nearly six times more than both Turks and Germans. However, Turks and Germans have a much higher intake of meat and dairy products—Turks consume more than twice as much meat and four times as much dairy as Iranians, while Germans consume twice as much meat and 13 times as much dairy.
Therefore, it's not accurate to say that Iranians waste bread; instead, the focus should be on addressing the low consumption of protein-rich foods among Iranians. This disparity is largely due to the decline in per capita income caused by the country's struggling economy.
Gasoline shortage crisis
Over the past three years, Iran has neither launched new refineries nor started building any. Meanwhile, nearly one million domestically manufactured vehicles, known for their low quality and efficiency, are sold to citizens each year. As a result, gasoline production at Iranian refineries last year was about 97 million liters per day (ml/d), while consumption peaked at 115 ml/d.
To address this deficit, the government blended 14 ml/d of additives, including 8 ml/d of non-standard petrochemical products, into the gasoline supply—a practice harmful to human health. This increased daily gasoline production to 111 million liters, with the remaining demand met through imports.
Statistics from the Oil Ministry for March 2024, the first month of the Iranian fiscal year, reveal that the government has increased the amount of additives in gasoline to 25 million liters per day, significantly endangering the health and safety of Iranian citizens. This measure comes in response to a 6% reduction in gasoline production at refineries and a 9% increase in gasoline consumption compared to the same month last year. The reasons for the decline in refinery production remain unclear, as does whether this trend has continued in subsequent months.
In 2022, before Iran faced gasoline shortages, only 5-6 million liters per day of additives were blended into the gasoline. Now, as the government becomes a gasoline importer for the second consecutive year, calls for price increases are growing louder. Mohammad-Reza Bahonar, a former parliament representative and member of the Expediency Discernment Council, has stated that if the gasoline imbalance continues, prices could rise to 500,000 rials (over 80 cents) per liter. Currently, subsidized gasoline in Iran is sold at 15,000 rials (2.5 cents) per liter, while non-subsidized gasoline is priced at double that amount.
The Mission said Sunday that the US election is a domestic issue and dismissed the reports as “lacking credibility.”
Despite the denials, the Trump campaign has said that its internal communications, including sensitive vice-presidential vetting files, were hacked in a breach they believe was orchestrated by Iranian hackers.
The revelation emerged after Politico received emails from an anonymous source containing documents from within Trump’s operation, raising serious concerns about the security of the 2024 presidential election.
The Trump campaign quickly pointed to “foreign sources hostile to the United States,” linking the breach to a report by Microsoft that identified Iranian hackers as responsible for targeting a high-ranking official in a US presidential campaign.
While Microsoft did not name the specific campaign, the timing and nature of the attack suggest that Iran is once again leveraging its cyber capabilities to disrupt American politics.
On Friday, the US announced a $10 million reward for information leading to the identification or whereabouts of six Iranian government hackers accused of carrying out cyberattacks on U.S. water utilities last fall. The State Department emphasized its commitment to tracking down these suspects and holding them accountable.
Tehran’s cyber warfare strategy has evolved into a sophisticated operation aimed at undermining the political process and sowing chaos.
This latest incident is not an isolated case but part of a series of aggressive moves by Iranian cyber actors, including groups linked to the Islamic Revolutionary Guard Corps (IRGC), to infiltrate and influence US elections.
several Iranian cyber groups, including Storm-2035 and Sefid Flood, which have been preparing for influence operations that could incite violence and erode public trust in the electoral process. The breach involving the Trump campaign is just one example of how Tehran’s cyber forces are targeting American institutions.
This hacking incident echoes the 2020 election cycle when Iranian operatives attempted to intimidate voters and spread disinformation. The Islamic Republic’s ongoing efforts to target US political figures and campaigns are widely viewed as part of a broader strategy to retaliate for the US killing of former IRGC Quds Force Commander Qasem Soleimani in 2020.
The timing of the Trump campaign breach is particularly alarming as it coincides with escalating threats from Iran against former President Trump. Recent reports suggest that Iran is actively plotting to assassinate Trump in revenge for Soleimani’s death.
The documents obtained by the hackers, including a 271-page vetting file on Vice Presidential candidate J.D. Vance, reveal sensitive internal deliberations that Tehran could exploit to further its agenda. The implications of this breach extend beyond the Trump campaign, posing a direct threat to the integrity of the 2024 presidential election.
Iran’s cyber operations are not confined to the US. The Iranian government has expanded its reach globally, with hacker groups like MuddyWater targeting governments and private entities in countries such as Saudi Arabia, Turkey, and India. These operations are part of a broader effort by Tehran to extend its influence and disrupt its adversaries on multiple fronts.
The US government has responded with sanctions and indictments against Iranian cyber actors, but these measures have done little to deter Tehran’s ongoing aggression.
