Iran Update, May 15, 2025
An Iranian vessel may have harassed a commercial vessel in the Persian Gulf on May 10. The United Kingdom Maritime Trade Operations (UKMTO) reported that a small craft collided with a merchant vessel and attempted to collide with other vessels about 80 nautical miles northwest of Jebel Ali, the United Arab Emirates (UAE).[1] It is unclear if the collision was intentional or an accident. UKMTO reported that the merchant vessel later received Very High Frequency (VHF) messages from unidentified individuals claiming to be “local authorities.“[2] The unidentified individuals instructed the vessel to stop and allow authorities to board it. The incident occurred west of Siri Island, which Iran controls. This incident occurred shortly before Iranian Armed Forces General Staff Chief Major General Mohammad Bagheri ordered the deployment of missile-capable fast attack craft (FAC) to Iranian islands in the Persian Gulf on May 12.[3] Bagheri stated on May 12 that Iran would retaliate against US military bases, disrupt international commercial shipping, and attack regional states hosting US forces “if the US military makes a mistake.” Iranian Artesh Navy Commander Rear Admiral Shahram Irani separately claimed on May 15 that Iran recently “neutralized” US naval activity in the Persian Gulf using “light naval units.”[4] Iran previously responded to the US “maximum pressure” campaign in 2019 by attacking oil tankers near the Strait of Hormuz, seizing a foreign vessel, and harassing US and British naval ships.[5]
Iran and the United States continue to disagree on the US demand for zero uranium enrichment, which may stall the US-Iran nuclear negotiations and delay a nuclear deal. US President Donald Trump stated on May 15 that the United States and Iran are “very close” to reaching a nuclear deal and that Iran has “sort of” agreed to US demands.[6] An unspecified Iranian source familiar with the negotiations told Reuters on May 15 that Iran and the United States continue to disagree on the issue of Iranian uranium enrichment.[7] Senior US officials, including lead US negotiator Steve Witkoff, have previously stated that Iran can “never” have an enrichment program.[8] Senior Iranian officials have repeatedly rejected this US demand.[9] Iranian Supreme Leader Adviser Ali Shamkhani told NBC News on May 14 that Iran is ready to sign a deal with the United States and willing to limit enrichment to “civilian levels.”[10] “Civilian levels” likely refers to the 3.67 percent enriched uranium limit set by the 2015 Joint Comprehensive Plan of Action. Reuters reported that the United States and Iran also disagree on where and how Iran would transfer its highly enriched uranium stockpile to another location, citing unspecified Iranian sources.[11] Iran’s rejection of the US demands for zero uranium enrichment may jeopardize the talks or force negotiations toward a less expansive agreement than what the United States reportedly desires.
The Houthis are unlikely to seriously engage in the Saudi-led peace roadmap because doing so would undermine their objectives to control all of Yemen. UK-based outlet Amwaj Media reported on May 13 that the United States asked the Houthis to return to the peace process, which Saudi Arabia initiated in 2022, as part of the US-Houthi ceasefire.[12] US President Donald Trump stated during a press conference in Doha on May 15 that “we want [the Houthis] to get along with Saudi Arabia.”[13] CTP-ISW assessed on May 9 that the Houthis have little incentive to participate meaningfully in peace negotiations given that the Houthis have not suffered any military defeats that would compel them to re-engage in peace talks.[14] The Saudi-led and UN-facilitated roadmap envisioned a political settlement among Yemen’s factions, including the Houthis, and would presumably work toward some kind of power-sharing agreement between the Houthis and the Yemeni government.[15] The Houthis consider themselves to be Yemen’s legitimate government and will likely oppose any negotiations that could reduce their authority in northern Yemen or undermine their objective to control the entire country.
The United States sanctioned six individuals and 12 entities on May 14 for helping Iran procure materials needed for the production of ballistic missiles.[25] The sanctioned entities and individuals are based in Iran and the People’s Republic of China (PRC). The United States sanctioned an Iran-based company that has supplied carbon fiber to the IRGC Aerospace Force Research and Self Sufficiency Jihad Organization and the IRGC Research and Self Sufficiency Jihad Organization. Carbon fiber is used to produce ballistic missiles.[26] The United States sanctioned these two IRGC organizations in 2017 for involvement in Iranian ballistic missile research, development, and flight test launches.[27] The United States also sanctioned one PRC-based company and three of its employees for sending carbon fiber to Iranian companies.[28]
Iran approved the opening of the first branch of a Russian bank in Iran on May 15.[29] Iran and Russia launched a new interbank network to circumvent the US dollar-based SWIFT system in November 2024 that allows Iranians to use Iranian bank cards to withdraw money in Russia.[30] The opening of a Russian bank branch is part of a broader Iranian effort to mitigate sanctions and bolster the Iranian economy.
The Iranian rial appreciated from 836,000 rials to one US dollar on May 14 to 830,000 rials to one US dollar on May 15.[31]
https://www.understandingwar.org/backgrounder/iran-update-may-15-2025
Iran Update, May 16, 2025
The IRGC Quds Force commander probably traveled to Iraq to ensure alignment among Iranian-backed Iraqi parties ahead of the Arab summit, particularly over engagement with Syria and the invitation to Shara. A State of Law parliamentarian criticized unspecified Iraqi political parties for portraying Iraq as weak in order to attack the Iraqi federal government in an interview on May 14.[43] The parliamentarian added that IRGC Quds Force Commander Brigadier General Esmail Ghaani traveled to Baghdad on May 14 to “secure the Arab Summit,” implying that Ghaani sought to create unity among the Iranian-backed parties. Ghaani arrived one day after Sudani met with Khazali and Ameri, and would presumably need to forge unity after the political sparring over the invite to Shara. Many Iranian-backed factions, including Khazali’s Asaib Ahl al Haq, threatened the summit if Shara attended, while Ameri defended Shara’s invite. Iran is especially concerned about tensions between the Shia Coordination Framework ahead of the upcoming parliamentary elections.[44] Iranian-backed Iraqi parties lost a significant number of seats in the 2021 elections due to inter-party competition that advantaged a more unified opposition.[45]
Iranian efforts to secure Syrian debt reimbursement through Iraqi mediation probably do not represent a change in Iranian hostility towards Damascus, though it does illustrate Iran’s economic fragility and need for funds. An informed source told Iraqi media on May 15 that Ghaani emphasized to several Shia Coordination Framework leaders, including Maliki and Ameri, that the Iraqi federal government should help recover Syrian debt to Iran.[46] Iranian parliamentarians and former diplomats calculate that Iran spent about 30 billion US dollars to bolster the Assad regime. CTP-ISW cannot verify this number.[47] Ghaani’s effort to secure Syrian debt to Iran follows US President Donald Trump’s announcement on May 13 that he intends to lift “all” sanctions on Syria, despite several legal obstacles to doing so.[48] Ghaani may have discussed this with Iranian-backed Iraqi politicians due to Shaibani’s planned attendance at the Arab Summit in Baghdad, where Iraqi leaders could engage Shaibani.[49] Ghaani reportedly discussed other Iranian “desires” regarding sanctions relief and the US-Iran nuclear negotiations for the Iraqi federal government to raise at the summit with Iraqi National Security Advisor Qasim al Araji on May 14.[50] It is not clear what Iraq could offer Syria to entice the new Syrian government to repay Assad’s debts to Iran. The money and other support that Tehran gave Assad would have been used to attack the Syrians who currently control Syria.
Iran and the Iranian-backed Iraqi actors that Ghaani approached to mediate Syria’s debt repayment continue to oppose Iraq-Syria normalization. Unidentified political sources told Iraqi media in late February 2025 that Iraq has not normalized relations with the Syrian government due to Iranian opposition, demonstrating the reality that Iran is still hostile towards Syria.[51] Iran also views Turkey’s influence in Syria as a threat to its long-standing strategic objectives. Iranian officials have also expressed concern that the fall of Assad created a vacuum for ISIS to exploit and spread instability to Iran.[52] Maliki and Ameri, like some Iranian officials, view Hayat Tahrir al Sham and Shara as “terrorists.”[53] It is unlikely that Iranian-backed Iraqi politicians would be able to compel the Syrian government to repay its debt to Iran. The Syrian government would also almost certainly prioritize reconstructing Syria over repaying Iran because Iranian money made serious contributions to Syria’s destruction.
Iran and Iranian-backed Iraqi actors will likely begin the first phase of a pressure campaign to compel Turkey to withdraw from northern Iraq. Ghaani reportedly discussed applying political and diplomatic pressure on Turkey to withdraw from Iraq during meetings with Shia Coordination Framework leaders on May 15.[54] Turkey maintains at least 136 permanent military bases across northern Iraq and has built 121 of these bases since 2018 to combat the Kurdistan Workers’ Party (PKK), according to BBC analysis.[55] The PKK announced on May 9 that it would dissolve itself and “end its armed struggle” after forty years of militant activity.[56]
Iran and Iranian-backed Iraqi leaders may use force to compel Turkey to withdraw from northern Iraq if the diplomatic and political efforts fail. Iran and Iranian-backed Iraqi figures appear to believe that political and diplomatic pressure will be sufficient to ensure a Turkish withdrawal upon PKK disarmament, but Turkey has not expressed willingness to withdraw at this time. Turkey exerts major influence within the Kurdistan Regional Government (KRG) and has previously worked with Iraqi Sunni parties to increase its influence in Iraq, often at Iran’s expense.[57] Iranian-backed Iraqi militias have previously struck a Turkish base in Ninewa Province and other Turkish positions in northern Iraq to impose a cost on Turkey for its regional activities.[58]
Iran and the E3 (the United Kingdom, France, and Germany) met in Istanbul, Turkey, on May 16 to discuss the US-Iran nuclear negotiations and snapback sanctions.[59] This marks the first Iran-E3 meeting since the start of US-Iran nuclear talks on April 12. Deputy Foreign Affairs Minister for Political Affairs Majid Takht Ravanchi and Deputy Foreign Affairs Minister for Legal and International Affairs Kazem Gharibabadi led the Iranian delegation.[60] UK Foreign Office Political Director Christian Turner stated that Iran and the E3 “shared [a] commitment to dialogue” and “agreed to meet again,” citing the “urgency” of the moment. This urgency likely refers to US President Donald Trump’s 60-day nuclear deal deadline, which ends in June 2025.[61] The meeting also comes after E3 diplomats recently threatened to trigger snapback sanctions on Iran by August if no substantial deal is reached.[62]
Iran continues to deepen its economic ties with the Russian-led Eurasian Economic Union (EEU) to mitigate the impact of Western sanctions. The Iran-EEU free trade agreement, signed in December 2023, entered into force on May 15.[66] The EEU is comprised of Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia. The deal aims to facilitate trade between the parties in various sectors, including agriculture, textiles, and industrial goods.[67] The deal reportedly cuts Iranian tariffs on Russian imports from 16.6 percent to 5.2 percent.[68] Iranian media reported that the deal could raise Iran-EEU trade to 12 billion dollars.[69] Iran and Russia have continued to expand ties since they signed the January 2025 Comprehensive Strategic Partnership Treaty.[70] Iran recently approved the opening of the first Russian bank branch in Iran, likely to bypass the US dollar-based SWIFT system and bolster Iran’s economy.[71] The deal is part of a broader Iranian effort to reduce dependence on Western markets and mitigate the effect of sanctions on Iran’s deteriorating economy.
The Iranian rial appreciated from 830,000 rials to one US dollar on May 15 to 829,000 rials to one US dollar on May 16.[77]
https://www.understandingwar.org/backgrounder/iran-update-may-16-2025