Hosted by Christina Ruffini and Sir Richard Dearlove
Guest
Episode Summary
Mojtaba Khamenei has been appointed to succeed his father as Supreme Leader of Iran. What now? Former UK Defence Secretary Sir Ben Wallace, who spent eight years as Chairman of the British–Iran Parliamentary Group, views this as a doubling down on defiance. Former MI6 Chief Sir Richard Dearlove and international journalist Rosanna Lockwood break down the rationale behind why the IRGC is vested in maintaining the status quo, the growing rift between the United States’s strategy and Gulf States Allies, and whether or not the United States and Israel have a viable endgame.Plus: Already at $100 per barrel, how high will the price of oil climb? What impact will the conflict in Iran have on European security and economies? Are Russia and China giving Iran an intelligence edge?
In this episode:
01:10 Succession in Tehran
02:56 The IRGC as a Business Cartel
04:10 The Gulf States’ Perspective
06:55 UAE Business Backlash
10:26 Insurance and War Risk Shock
14:10 Shahi Drones and Escalation Risks
17:51 EU and UK Economic Hit
19:33 UK Politics and Social Tensions
21:38 One Decision to Watch
Hosted by Sir Richard Dearlove (former MI6 Chief), Sir Ben Wallace (former UK Defence Secretary) and guest co-host Rosanna Lockwood (International Journalist)
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Transcript
INTRODUCTION
Lockwood: Hello, and welcome to One Decision in brief. I'm your guest host, Rosanna Lockwood. Today, we have the pleasure of two incredible minds on this special extended episode. I'm joined by host Sir Richard Dearlove, former MI6 spy chief. Hello, Sir Richard.
Dearlove: Hi, Rosanna. Yep. A lot happening as we do the podcast.
Lockwood: It's hard to keep up, isn't it, as we're recording, so much changing? And Sir Ben Wallace, former UK defense secretary and formerly chairman of the British Iran parliamentary group for eight years. Good to see you, Sir Ben.
Wallace: Hello. Hi, Rosanna.
Lockwood: I'm so glad you're both here. We've got a lot to discuss about Iran today. Subscribe to One Decision on YouTube so you don't miss analysis you cannot get anywhere else. Gentlemen, I know we all have an interest in discussing what's happening, particularly in the Arabian Gulf at the moment. But let's start with what's more commonly known as the Persian Gulf, the Iran side of the Strait of Hormuz, and talks succession. Mojtaba Khamenei officially appointed, reports as we're recording that he may already have been injured. Talk to us about what we know of him and what you make of his appointment, Sir Ben Wallace.
INTERVIEW
Wallace: Well, he's, funnily enough, more hardline than his father. He's been rumored to have been the favored successor even before this war, but he's also not entirely coming with unanimous support, is my understanding. There were those in the regime who favored somebody else because if they were going to try and at least put some form of olive branch out of the United States, picking a hardliner like him was not going to be the right message. But the IRGC got their man. He is definitely the IRGC's man, and I think we'll just see more of the same, sadly, if this war passes. And I think he is going to be definitely high up on the target list of Israel and the United States in the next few days, so who knows where that will lead. But the IRGC got their man. But I think we should be surprised, one of the tragedies of Iran in the last decade is the reformists have more and more been either marginalized or put out to grass, and the IRGC have got more and more powerful.
Dearlove: I think it just shows intransigence is still Iranian policy. So we have, you know, a doubling down on the position that they've adopted. The other thing about Mojtaba, as I understand it, is he's been his father's business manager. And one of the important things to understand about the IRGC is that it isn't just a security organization. It's a business enrichment cartel. So there's huge vested interest in these people staying in power because they have all been massively enriched by belonging to it. And I think that's a dimension one tends to forget. You think, what on earth are the motivation of these people? Well, it's quite clear. But it also, I think, increases their isolation inside Iran. And I thought one of the fascinating things that happened during the course of the week, the president, it was Pezeshkian, made this statement apologizing to the Gulf powers, which does show the extent to which there is actually a division. I'm not saying a split, but a difference of opinion between those who claim to have a degree of moderation in their views and then the more extreme. So I think we can assume all is not well inside the regime, but whether this has any emanation politically or militarily remains to be seen.
Lockwood: Those watching most closely across the Strait of Hormuz will be the rulers of the various Gulf Arab states because of a succession within the IRGC or within the current branch of the Ayatollahs, a weakened Iran, all of these things were sort of — a failed state would be the worst possible outcome for a lot of the Arab Gulf. Talk to us about some of the risks you're hearing from sources in the region, Sir Ben Wallace.
Wallace: Most of the Arab leaders will have their head in their hands. They were busy trying to negotiate some form of way out of this, going back to the twelve day war, as they called it, the bombing of Iran a few months ago. Oman was hosting, effectively what it saw was talks. And then suddenly out of the blue came a really overpowering military intervention on Iran. I mean, huge amounts of bombing still going on as we speak, both Israel and the United States. And I think they're saying, well, okay, if you're gonna do this, this needs to be over quickly, and we want to see the regime change you talk about, and where's your regime change plan, please? I know that the United States didn't inform many of them at all that this was going to happen. So I think they're now in a position of still loyal, to some extent, to the United States, but also questioning whether are they going to be left to mop up a mess? Are they going to be facing the consequence of the economic damage that is inevitably going to occur? And is Trump going to suddenly move on to playing golf or doing something else? We know he has an attention span that isn't particularly long. He'll tell himself he's won. His Truth Social post on Sunday night about Keir Starmer said, We've won. I mean, he's definitely won. Well, Netanyahu has won. Let's be honest, Netanyahu's got what he wanted, which is pretty much the destruction of any nuclear program or any vestige of a nuclear program if there was one. But the other bit, the regime change, I think for Netanyahu was a nice to have. It wasn't an essential. I think from the United States point of view, it doesn't allow that's going to happen anytime soon. And to Richard's point about the enrichment of the IRGC is absolutely right. It was one of the problems we had with the sanctions debate on Iran is the people that benefited most from an isolated and sanctioned Iran was the IRGC because they ran the smuggling routes. They quite liked a premium on their products. It's actually how they funded their Quds Force. So I think we are sadly a long way away from any rising, and that leads the Arab states and the Gulf to ask themselves the question of, you know, our economy's being knocked into the park for now. When are we gonna get it back?
Lockwood: I wanna come to Sir Richard on the Arab states and what this all means to them, but it just, if you'd allow me a moment just to talk about — you mentioned, Sir Ben Wallace, the business leaders in the region and how they feel about it. Khalaf Ahmed Al Habtoor, who is a senior Emirati businessman that are normally resident in Dubai. I'm currently in the US recording this. But I can tell our listeners who don't know that the Al Habtoors are a very important, prominent business family within the Emirates. They're not members of the government officially, but to have a senior Emirati speaking out like this, there's a sort of tacit acknowledgement that he's not speaking on behalf of the government, but he wouldn't say this unless he was sure. Released a statement as we're recording this this morning saying, quote, we know full well why we are under attack in the UAE. We also know who dragged the entire region into this dangerous escalation, inferring Israel, without consulting those he calls allies in the region, Trump. We do not deny, Habtoor continues, the Iranian threat to the region, which has become clear in recent days. We do not trust Iran, but this is a dirty game. Now this is such Gulf Arab language, in which several ploughs clash at the expense of our region with no honor, no transparency, that feeling of honor. He talks about not wanting to join the war because we honor our sons. We protect our sons in the Gulf Arab region. Senator Graham says they are the Arabs' allies, and we need to benefit from US protection. And Habtoor says, I say to Senator Lindsey Graham, we do not need your protection. All we want from you is to keep your hands off us. Tough words there, Sir Richard.
Dearlove: Yeah. Well, it sort of shows some of the complex dynamics. I mean, I'm amazed for a start that Iran should have attacked Qatar and Oman. I mean, the Omanis have seen themselves as the sort of with Iran over a longish period of time. And even when things were really tense and difficult, they kept their channels of communication open. And the Qataris, frankly, have just been, I would say, sympathetic in some respects. So those two, I mean, the odd one out is Bahrain in my view because they have had the most enthusiastic Abraham Accords relationship with Israel, which actually has quite a strong basis and dynamic and all sorts of stuff was going on between Israel and Bahrain, which the, obviously, Israelis were exploiting wildly. I do believe in the case of Saudi, of course, the most important player of all, that there are those in the Saudi royal family who are just very, very keen to see Iran put permanently in its box as a subsidiary power in the region. And I think you have to go back to the fundamentals of the Sunni-Shia divide, bearing in mind that the Saudis have had a hell of a problem with their own Shia minority in the East of the country. The other sort of characteristic I would say of the region is when it's in crisis, the Arab leaders find it very difficult to speak with one voice. And I think you're seeing evidence of that now despite the mechanisms they have to coordinate their policies and positions. And you see the sort of sectional regional interests appearing very clearly. I'm sure that the commercial damage that this war is doing is hurting an awful lot of these very, very influential and important families who are actually the stuff of the lifeblood, particularly of the Emirates. You know? Behind the scenes, they're enormously powerful and influential.
Lockwood: Speaking of Bahrain, Bahrain's energy company, BAPCO, declaring force majeure this morning, and we've seen that from other sites across the Gulf as well, places like Qatar. The markets absolutely roiling whilst we're recording this, and I'm pretty confident they're still gonna be out when this episode airs. And, Sir Ben — so Richard makes a point there about the damage to commercial interest for the Gulf and also how that might steer Trump's hand potentially in the outcome of this war?
Wallace: You know, the Iranian plan is disruption and, you know, economic costs, and it has been since the 1980s. I mean, I think what sort of strikes me is everyone knew Iran's plans. Iran has had these plans forever. They used to fire RPGs at oil tankers back in the day. Close the straits, cost everyone, if we're going down, you're all going down, is pretty much their plan. It's not a secret. They'll use proxies where they can to make life more dangerous for us all over. They'll bring it home. We saw, I think, a potential bomb against the US embassy in Oslo last night. You'll see those type of attacks happening, but also they are going to continue to do this, and I think that's going to cost the economic plan. If you think about it, the importance to the world now of Middle East hubs in Doha, in Abu Dhabi, in Dubai, in Bahrain, those countries, when they're not drilling oil, they are hubs for travel, as you know. And Dubai is particularly, Rosanna, you'll know from that country, Dubai itself is not an oil rich state. Its neighbor is. It relies on being an international hub. When insurers say, We're not insuring your aeroplanes coming into land here because every other day is a drone. It doesn't have to be hundreds of drones. It just has to be the threat. That's going to have big ripples, plus the potential to block the straits for oil. That's going to have big ripples around the world. We've seen today and in the last few days, we've seen oil go up way up, way above, I think, nearly $100 a barrel. It's heading towards or is going to be up there. That's going to be felt in everybody's pocket in the next few months. So I think if I was a Gulf leader right now, I want this over. I think Sir Richard's points about the Saudis and the Omanis, I mean, of course, there are hawks in every government around the Gulf. But ultimately, I think they want this whole thing now put to bed. And there was a warning from the foreign minister of Qatar, I think yesterday, to Iran to say, You've let us down. You said you're not gonna attack us, but you are, and we can only go so far before we have to do some response. I think that could be a dangerous tipping point. But at the moment, Saudi has not yet roared. The Saudi massive power has not yet made its move, and I wonder what that will be.
Lockwood: I'm glad you brought up insurance. Strangely, usually a boring topic, but today's copy of the Financial Times, it's absolutely enormous as a story because data centers, pipelines, ports, and hotels in the Gulf are flooding insurers with requests for cover there, of course, with the Strait of Hormuz being closed as well. A US agency is reportedly creating a $20 billion reinsurance facility to restart traffic stalled by the Hormuz closure, whether that's even possible.
Wallace: Well, remember that nearly every single insurance has force majeure or acts of war as a carve out. All the travel insurance, all those people on a holiday in Dubai, they are going to find that most of their insurance says, Sorry, we don't cover acts of war or terrorism. That's specialists. So very quickly, I think you can find the insurance market will withdraw, and then we get into a whole different mess. So it's not looking good. I know that the current Iranian plan is to continue firing drones towards the Gulf. What they did very early on in this war is devolve the target list to much lower level commanders so that Israel and America couldn't decapitate the command and control network. So they basically sent them all Excel spreadsheets and just said, Keep firing these things off. The problem with that is that is not a sophisticated response, and it makes it very hard to put that genie back in the box, which is I think why you see, on the one hand, the president apologizing and saying we won't attack our neighbors, and on the other hand, a few hours later, commanders of the IRGC firing things into Dubai Airport. It's almost unstoppable at the moment. I think we'll see less ballistic missiles. I think the Americans and Israelis will destroy all the launchers pretty quickly. My information was the Iranians have already lost about 65% to 70 of those launchers. But we'll see many more Shahed drone type attacks going on and targeting even more critical areas. I mean, Bahrain had a desalination plant hit recently. I remember all those years ago when I visited Dubai that if their plants were hit, I think you'd run out of water in six days. Very reliant on desalinated water. Sir Richard?
Dearlove: Yeah. Well, I should reveal I was chairman of one of the big Lloyd's syndicates for sixteen years. So I'm well aware of the sensitivity now of the insurance issues. I mean, just take shipping an oil tanker, because what happens in a wartime situation is the insurance you've got, I think, is valid for five or seven days, and then it automatically ends, and you have to renegotiate it. The rates currently for reinsuring tankers anywhere near Hormuz, they've quadrupled, I mean, at the moment. And I think a lot of this insurance isn't viable without state backing, which is why, of course, Trump has issued this sort of $20 billion offer. But I'm not sure that's enough to make much difference. And we've already been through this problem once recently with the insurance of grain ships leaving Odessa. So that is huge. And, of course, Ben makes the point about tourism, travel insurance, aircraft insurance, all of these things are gonna be massively affected. So I think that the pressure to deescalate, you know, for commercial reasons is gonna come thick and fast from across the whole region. And it'll be interesting to see how Trump responds to that pressure given, you know, his reputation, quote unquote, as a businessman and a dealmaker.
Wallace: One of the pluses of Donald Trump is he just invents the situation and convinces himself that's what it is. So if he decides he wants to declare total victory tomorrow and declare that it's all been won, and then try and go back to normal, he will, even though the poor old Gulf states will have to sweep up the consequences and all of us will pay for it in the long run. I think that is a very great possibility. He may well do that. If you remember, apparently, he annihilated the nuclear program the first time around, so I'm not quite sure what they're bombing today. In his statements, if you remember, he said, We successfully knocked out the nuclear program, but he's back doing it. So I don't know. But I think ultimately, money will speak. Sir Richard is absolutely right. Money will speak, and Donald will have to do a sort of, as we might say, reverse ferret is an English phrase, when he does a handbrake turn and then declare victory, and off he'll go somewhere else. But the ripples are long on this, I'm afraid.
Lockwood: The old reverse ferret. Speaking of blighty, seeing as we've got three Brits in the arena, I do wanna get your views on Europe and to the extent that the UK as well, has become and will continue to become involved in all of this. Ursula von der Leyen from Europe this morning speaking and saying that Europe is very much caught in this. Of course, energy prices was already huge for them, with the onset of the Ukraine war proper. Talk to us a little bit about the effect this is having at home for you in the UK at the moment.
Wallace: Well, there's a lag. So these prices will be felt in three months' time, which luckily for Britain will be summertime, but there's always a lag between the spot price on the market and the products that we'll buy. So I think some of that will be felt later. I think none of our economy is doing particularly well in Europe. Britain, Germany — Germany's better, but Britain and France, we're in a very shaky space anyhow. I think we're going to head off with also Russia. It's becoming very clear that Russia and China have shared intelligence on American locations with Iran. And I hope the United States listens to that and realizes that Russia is not their friend. And they will also empower Putin. Putin makes quite a lot of money from a high oil price. He'll be quite delighted by, to some extent, what's going on at the moment. His economy was teetering on the brink. He'll be coining it, I'm afraid. And his discounted oil to China and India will become even more attractive right now. So I don't think it bodes well for European security, it doesn't well for our economy. On top of that, we've got US tariffs. So all around, hunker down, get the tin helmet on, and we're gonna have to make some tough decisions in government to make sure we invest in our resilience.
Dearlove: Yeah. Well, of course, it also has huge reverberations through actually through the Labour Party, given the prime minister's weakened position and the fact that there's huge criticism of his failure initially to support the Americans and then, you know, to change his views. And then it feeds into other issues like state of the Muslim community's vote. It comes on the eve of a verbal identification by the government and what constitutes Islamophobia. I mean, there are so many areas in which this war has resonance at the moment, and it's difficult to list all of them, but it shows, at least in the UK, the febrile state of politics here. And to an extent, I think that's true of France as well, where, of course, Macron is in huge political difficulties. The Muslim diaspora there is not exactly complacent or easygoing. And then you've got the huge threat coming from the Rassemblement National, and the likelihood is that you could have an extreme right president in France after the next elections. All of this is going to be impacted, and we haven't got time to go in and explain each situation, but I'm just sort of listing the general ones. And then, of course, you've got a country like Spain — yeah, I was gonna say — which is out on a limb and taking a very different view and being hugely critical and with a prime minister, Pedro Sánchez, who is hated by most of Spain's political elite, but seems able to cling on to power nonetheless. Anyway, one could talk about this for hours, but all of these things are affected and affected very profoundly by this conflict.
Lockwood: And Sánchez notably drawing the eye of one US president Donald Trump with his independent foreign policy. Look. As ever, you know how this goes, chaps. We ask you what one decision you're looking out for. We'd say coming days, but let's say coming weeks with regards to the situation we are seeing in the Middle East, Sir Ben.
Wallace: I'm looking out for the one decision Donald Trump will make is when he declares victory and goes back to the golf course.
Lockwood: Sir Richard?
Dearlove: Who will succeed Mojtaba?
Lockwood: And for me, the one decision that I'm looking out for is will the Gulf states stay out as they hope to do so from this situation, in not attacking back with their own forces beyond what they're doing, which is defending missiles in the sky. Sir Richard, Sir Ben, great to speak to you. Well, that is all for this episode. Be sure to subscribe to One Decision on YouTube. You can follow us on Apple Podcasts, Spotify, and wherever you listen to podcasts. Don't miss the Iran analysis you cannot get anywhere else. For more conversations with leading decision makers and thinkers, do check out onedecision.com and our YouTube page where you'll find additional commentaries, conversations, and explainers. I'm Rosanna Lockwood joined as ever by Sir Richard Dearlove and Sir Ben Wallace. Thank you for listening.
