Iran and the Middle East (Part I: Bahrain, Egypt, Iraq)

By Research Fellow Gabriela Billini

While all sovereign nations have relationships with other states for a variety of reasons ranging from economic to cultural to security concerns, some of the most important ties are with states that lie in one’s immediate region and geographic neighborhood. Such bilateral relations are helpful for garnering influence via soft power and may influence decisions a state’s government makes concerning its domestic policies and international engagement. They are particularly important for addressing key regional issues and conflicts. Iran is no exception, and has a dossier of shifting relations.

This series on Iran and the Middle East (part I) will elaborate on Iran’s connections with Middle East states and its eastern neighbors in political relations, economic, security, and civil society matters. Knowing what lies at the core of these relations is key to understanding Iran’s role in the region and can shed light on bigger issues that contribute to the complexities of the Middle East. Understanding Iran’s relationships with its neighbors is particularly important for comprehending its ambitions for regional influence. Three key features that help define Iran’s relationships with its neighbors include each state’s relationship with the outgoing Pahlavi Dynasty, the Iran-Iraq War (1980-1988) and each state’s relationship with Saudi Arabia.


Political and Diplomatic ties

Iran and Bahrain do not currently have diplomatic ties.

Iran laid claim to the territory of Bahrain from the 18th century until it gained its independence from the United Kingdom in 1971. Before the formation of the Bahraini state, in 1783, the Persian empire ruled over the territory we now call Bahrain. Centuries later in a transition from protectorate status under the United Kingdom, the country’s leading al-Khalifa family was consulted by officials from the United Nations to transition into an independent country in 1971. Once Bahrain gained its independence, Iran recognized the country under the Shah.  Later, the Islamic Republic accepted the Shah’s verdict and continued to recognize Bahrain as an independent country, despite calls by some clerics to reclaim the territory.

Bahrain is a particularly interesting case for analyzing the Iranian-Saudi competition for influence in the region. Bahrain has a population of 1.5 million, of which a majority, 70%, are Shi’a and the ruling family (Al Khalifa) are Sunni. Claims that this Shi’a community has political connections to Iran causes tensions between them and the ruling Sunni family.

The Al Khalifa family has been ruling Bahrain since before the state declared independence from the United Kingdom in 1971. Due to the country’s geographic location and the Al Khalifa family’s Sunni beliefs, Bahrain has very close ties with Riyadh. Moreover, the two states are connected via the King Fahd Causeway, and many Saudi families live in Bahrain.  This close relationship between Bahrain and Saudi Arabia is what has maintained Iran at a distance.

Bahrain is the smallest of the Gulf Cooperation Council member states, an organization that formally joins Saudi Arabia’s Gulf allies in economic matters. Further, Saudi Arabia provides the Bahraini kingdom an income in the form of economic aid. As a result of Bahrain’s close ties with Saudi Arabia, relations between Iran and Bahrain tend to be quite tense.

In support of its ally Saudi Arabia, Bahrain cut ties with Iran in 2016 and those ties remain cut, despite the fact that Mohammed Javad Zarif, Iran’s Foreign Minister, has indicated an interest in restoring the ties. Bahrain claimed its decision to sever ties initially was due to “continuing and dangerous interference in the internal affairs of Bahrain, Gulf states and other Arab nations.” Despite Bahrain’s official statement on this matter, the most direct action leading to the severing of ties was Saudi Arabia’s execution of Shi’a cleric Nimr al Nimr and the resulting overrun of the Saudi embassy in Tehran. Bahrain cut ties with Iran at this time in unison with other Saudi partners.

In January 2019, Iran spoke out against a Bahraini Court of Appeals’ November 2018 decision in finding Ali Salman, a Shi’a opposition leader in the country, guilty in a Qatar-linked espionage case. Bahrain, consistent with its pro-Saudi agenda, has condemned the response, accusing Iran of promoting “chaos, tension and violence in the region.”

Economic ties

Iran and Bahrain have minimal trade relations. In 2017, Iranian imports to Bahrain accounted for 0.1% of the total and Bahraini exports to Iran at 0.5%. In 2007 Ahmadinejad made a state visit to Manama, the capital of Bahrain. Many sources such as Reuters suggested that economic deals were being negotiated between the two heads of state such as an agreement to have Iran supply Bahrain with 1 billion cubic feet per day of natural gas. Later, however, the Bahraini foreign minister at the time, Khalid bin Ahmed bin Mohammed al-Khalifa, stated that the deal was off. Ten years later, in 2018, Bahrain would discover an oil field with natural gas and shale oil off its western coast, which is said to dwarf its reserves.

Security ties

Iran and the Kingdom of Bahrain do not have any security partnerships; rather, they have had some confrontations. Because the Shi’as are discriminated against in Bahrain, Shi’a militia groups have emerged over the years, some of which are believed to have received financial and training support from Iran’s IRGC. In 1981 there was an attempted coup d’etat in Bahrain and the state accused the Islamic Front for the Liberation of Bahrain of being responsible for the attempt, stating it only managed to mobilize forces and obtain its capacities because of Iranian support. During this time, Saudi Arabia was offering on the ground military support to the ruling family to offset the protests and uprisings, and ensure the Bahraini monarchy’s survival. This also served as a warning to Iran against more meddling in Bahraini affairs.

Bahrain was one of the many Arab states affected by the wave of uprisings in 2011, in this particular case with the Shi’a population taking to the streets. Soon after they began, on 14 February, Saudi troops entered the state to stop the protests, and the Bahraini government decried all those who engaged in protests as agents of Iran. To this day, there seems to be no evidence pointing to Tehran’s involvement in the protests, though they are still suspected.

Cultural and civil society ties

Though Iran states it is the protector of Shi’as around the world, there is not much evidence of deep connections between Bahrain’s Shi’a and Tehran. Historically there were some partnerships between the Iranian government and politically active Bahraini Shi’as such as the Islamic Front for the Liberation of Bahrain which aimed to overthrow the ruling family, but were arrested in 1981. While this all lies in history, Bahrainis are generally quite skeptical of Iranians, which prohibits the development of closer relations. And though there is no concrete proof of direct involvement or influence by Iran on Shi’a protests in Bahrain in 2011, soft power could have played a strong role in encouraging the protests. Various products advertising the Iranian regime’s ideology can be found in bookstores in Manama and seminary students who receive training in Iraq and Iran may also be exposed to Iranian regime propaganda because of the number of Iranian clerics and ayatollahs who teach there.

Because of Bahrain’s history under Iranian control, there was some immigration of ethnic Persians, typically merchants who now hold Bahraini citizenship called the Ajam. There is not an official estimate of how many Persian Bahrainis live there now, but some unofficial estimates say 100,000.


Political and Diplomatic ties

Iran has not had diplomatic relations with Egypt since the Iranian Revolution. Egypt is the only Arab state that has not had an embassy in Tehran.

The current poor state of relations between Egypt and Iran dates back millennia as both states have rich ancient histories, which shaped the modern Middle East. Historically competitors on the world stage -- Egypt, the symbol of Arab identity, and Iran, proud of its Shi’a identity and Persian language -- have continued to be at odds.

A pivotal moment in recent history, the Iranian 1979 Revolution set off a period of particularly difficult relations between the two nations. In March 1979, Egypt and Israel signed a peace agreement, making Egypt the first Arab state to recognize Israel’s existence and establish peaceful relations. That same year Egypt also welcomed the deposed Shah, upsetting Tehran two-fold. Tehran swiftly condemned both actions, and Khomeini called the Egypt-Israeli peace agreement “treason against Islam”. Both Khomeini and disgruntled Iranians wanted to extradite the Shah back to the capital to face criminal charges. Another blow to relations between the two countries was Egypt’s support for Iraq in the Iran-Iraq War.

Economic ties

Iran and Egypt have minimal economic ties. Because Egypt is closely allied with Saudi Arabia politically and economically, developing economic ties with Iran is risky for Egypt. As the Qatari diplomatic crisis shows, Egypt tends to cooperate with wealthy Arab partners, and is willing to take the position of any nation willing to aid them economically.

When Qatar was accused by Saudi Arabia of having relations that were too close to Iran, Egypt joined Saudi Arabia in severing its ties to Qatar; in return, Saudi Arabia offered significant economic assistance. This decision to support Saudi Arabia in isolating Qatar, had additional benefits for Egypt, however.  Since Qatar was also a staunch supporter of Egyptian President Sisi’s predecessor, and of the Muslim Brotherhood, the decision to support Saudi Arabia in isolating Qatar was also politically-motivated.  

The International Trade Center reports that in 2017, Iran sent $257 million worth of exports to Egypt, accounting for less than 1% of Egypt’s total 2017 imports, with the main import product being iron and steel, as well as organic chemicals. Egyptian imports to Iran are even lower, at $6 million, 0.02% of Egypt’s total exports. Despite having minimal economic ties with Iran, however - after international sanctions were lifted on Iran - some reports indicated that petrochemicals cargo began shipping to Egypt from Iran.

Security ties

Iran and Egypt do not have any security partnerships. Egypt has generally been opposed to Iran on the world stage and has continued to be so as recently as the June 2017 diplomatic crisis with Qatar. During the Iran-Iraq War, Egypt supported Iraq politically and financially, with a $5 billion commitment in weapons from 1980 to 1987, including tanks, munitions, and a version of the Soviet Scud B missile.

Years later, Hosni Mubarak, former President of Egypt for close to 30 years, attempted to improve its relations with Israel by pushing out militant Palestinian groups like Fatah and Hamas from Egypt. At the same time he also denounced Iran’s involvement with these groups and Hezbollah, accusing them of threatening the region’s security. Mubarak once even said that “Iran had created an Islamic Republic in Egypt’s backyard,” in reference to Iran’s support of Hamas. By protecting its relations with Israel and making a stand as a regional player, Egypt has generally remained at odds with Iran.


Political and Diplomatic ties

Iran and Iraq currently have diplomatic ties, though historically, Iran and Iraq have had a long, ever-changing relationship.

The Iranian Revolution, 1979: Tensions between the two countries were already rising while Iran was under Pahlavi control and while Saddam Hussein was still the leader of Iraq. A regime change in Iraq in 1958 changed the strong relationship Muhammad Reza Shah had with the country. The new leadership also withdrew from the Baghdad Pact, a pro-US agreement some countries in the Near East signed to swear allegiance to America in the growing civil war. As Pahlavi was a close ally of the United States at this time, Iraq's tilt towards the Soviet Union continued to strain their relationship and feared a Soviet Union invasion in the Middle East. Border skirmishes would follow, with Iraqi troops provoking Iranian counterparts. Such tensions would continue, particularly with the changing scene of Iraqi political affairs as the new regime would take shape. Theoretically, Iraq’s independence and rejection of Iranian regional hegemony was a security and political threat to the country.

After the 1979 Revolution, however, the relationship soured quickly. This began with a very public rivalry between Saddam Hussein and Ayatollah Khomeini, exacerbated by competing regional policies as each sought influence in the region.

By April 1980 Ayatollah Khomeini was calling upon Iraqis to overthrow the Hussein government, accusing it of corruption. Many other events occurred in the interim to heighten tensions, such as Hussein ordering the Al-Dawa leader Ayatollah Sayyid Muhammad Baqir al-Sadr’s execution, and Iran shelling of Iraqi border towns in September 1980.

Ultimately, with the new Iranian regime appearing weak and isolated, Hussein took the opportunity to reawaken old territorial claims and invade the country, leading to the Iran-Iraq War (1980-1988).

The Iran-Iraq War: The war began with a two-prong attack by Iraq on Iran--one in the north and one in the south, attacking air bases, an oil refinery and the city of Mehran.

Very quickly, states in the region and around the world began to take positions on the war, most backing Iraq as a means of regime support, as well as to signal disapproval for the new regime in Iran. The United States, Great Britain, and Italy are examples of Western states that backed Iraq. All Arab nations, with the exception of Syria, followed. Syria was the only Arab nation to back Iran, and was one of the very few allies it had. Historically, this was a crucial moment for Iran, as the Iran-Iraq War was a fight for the existence of the newly established Islamic Republic. The government took it as an opportunity to call all Iranians to participate in a variety of ways, but to fight and resist for their nation, principally on the basis of religion.

After a long and fatal near eight years, the end of the war came after a truce was reached at the United Nations Security Council in July 1988, yielding UNSC Resolution 598. Though a truce was not the desired outcome for either nation, it was a bloody eight-year war that needed an end. Years would pass and the nations would take time to rebuild, Iran especially so.

Post US Invasion of Iraq in 2003: After the US invaded Iraq in 2003, relations between Iran and Iraq shifted drastically, more positively. Because the US invasion removed Saddam Hussein and his Sunni Baath Party from power, a power vacuum quickly emerged. The US attempted to install a diverse Governing Council, but due to Iraq’s demographics this effectively put the majority Shi’a population in power.

Since Iran always had close ties with Shi’a Iraqis, this helped Iran gain influence in Iraqi politics and security after the invasion. One particular way in which Iran gained influence was through Shi’a clerics who ultimately took positions of power in the Iraqi government after the US invasion. For example, Iran sponsored militia groups and brigades of Iraqi clerics Muqtada Sadr, Ali al Sistani and Ammar al Hakim from 1979 through 2003; this previous sponsorship paid off when these clerics later gained significant positions of power.

After the Iraqi elections in 2005 brought many Iran-backed Shi’as into power, Iran’s influence grew even stronger. Some of these newly elected clerics had spent years in exile in Iran during the Hussein regime. This particular election did not exactly yield a quickly unified government, however, and feelings of sectarianism spilled out into the streets. For example, the Shi’a al-Askari mosque in Samarra was attacked in February 2006, following days of bloody attacks against the Shi’a population. These attacks demonstrated how deeply divided the country had become due to the government’s policies, increasing Iranian influence and highlighting the distinct treatment of the two religious groups. During this time attacks against both groups increased - including accusations of Iran-backed Shi’a militias attacking Sunni communities..

The emergence of Daesh in 2014: After Daesh emerged as a threat in Iraq in 2014, Iran’s influence grew exponentially, primarily because it permitted Iran to offer military assistance to two close allies, Iraq and Syria. With its interest and motivation to become a regional influence, Daesh helped mobilize this strategy. Initially, many Sunni citizens in Iraq supported Daesh because the group offered an alternative form of governing that would place Sunnis in a more favorable position. This is one of the few ways in which Daesh was able to grow in Iraq. It used this weakness from the government to gain leverage amongst Iraqis and territory in the state. The Iranian government collaborated with members of the Iraqi government, which have influenced policies on the issue of Daesh, holding a political, security and societal dimension, which is described in detail in the security ties section below.

Economic ties

Iran and Iraq share very strong trade relations, as a result of rapprochement over the last several years. The World Integrated Trade Solution reports that in 2011 Iraq is Iran’s number one trading partner, with a trade balance of $4.5 billion. Iran exports $4.6 billion worth of goods to Iraq and imports $109 million worth of Iraqi goods.

In 2015, Iraq imported $6.2 billion worth of non-oil Iranian goods, which represents about 9% of Iraq’s overall imports. Then, in 2017, the International Trade Center reported that Iraqi imports to Iran account for $77 million. Trade is expected to rise to $20 billion per year, as reported by President Rouhani.

Oil exports is an area in which Iran and Saudi Arabia are competing, with Saudi Arabia wanting to edge out Iran’s influence in all areas.

With renewed US sanctions on Iran, Iraq has been granted a much needed exception to continue importing electricity from Iran. Further, as a response to the sanctions, Iraq is expected to increase its oil exports, targeting a production of 5 million barrels a day in 2019.

Security ties

Iran and Iraq have a significant security partnership which date back to the ousting of the Baath Party and the Shi’a population taking control of Iraq’s political process.

Given the Iran-Iraq war was a threat to Iran’s existence, one of Iran’s primary goals vis-a-vis Iraq is to ensure that Iraq will never pose as significant a threat to it again. Now that it has soft power abilities to encourage pro-Iranian politicians in Iraq, Iran has been able to get very involved in Iraq’s security regime.

Today, Iran holds particularly strong authority in Iraq due to its investment in the fight against Daesh. Shortly before Daesh established itself in Mosul on 29 June 2014, a prominent Iranian Shi’a cleric, Ayatollah ‘Ali al Sistani, an Iranian based in Iraq, declared a fatwa asking all Iraqi men to join forces to fight the terrorist organization. This fatwa and call to arms yielded the creation of the Popular Mobilization Forces, an umbrella organization of a variety of smaller militia forces. This provided an opportunity for Iran, being a neighbor and the largest Shi’a state in the world. Today, these forces are seen as a strong tool in Iraq that are controlled by Iran given the IRGC’s strong training support and weapons investment in the PMF.

Iran has been reasonably successful in its fight against Daesh in Iraq, having gone as far as paying the necessary sums to cover Iraq’s security and the fight against Daesh. Because of its heavy financial backing of towards the PMF and other groups however, Iran is not only able to help direct the Force in its fight against Daesh, but to also work towards its own interests. This is very concerning to Western states, which eagerly wish to contain Iran’s regional influence. There have been American efforts to curb Iran’s efforts in Iraq, such as categorizing the Al-Quds force as a terrorist organization and arresting Iranians in Iraq who have ties to such groups.

Notably for US-Iran relations, since there are as many as 6,000 US troops in Iraq (March 2017) working with government officials and forces, the United States is particularly concerned about the possibility of an Iranian attack against Americans in Iraq. Given the country's’ proximity Iraq provides Iran with a strategic advantage against the US by virtue of access to American interests and potential opportunities to circumvent them.

Cultural and civil society ties

Due to Iraq’s large Shi’a population (est. 60%), the two nations maintain close relations on religious grounds. Iraq holds a variety of religious sites that are of particular importance to the global Shi’a community, including the city of Karbala. Karbala is, in Islamic history, the location where the Shi’a and Sunni branches had their definitive split because it was the site where Husayn and Ali al-Akbar ibn Husayn, ‘Ali’s son and grandson, were killed, ending the direct lineage of the Prophet’s children. Many Shi’as visit Karbala, as well as the Imam ‘Ali Mosque, the Imam Husayn Shrine and the Imam Reza Mosque. As a result, there is a significant exchange between Iranian and Iraqi Shi’as. Further, the Iraqi city of Najaf is the leading center for clerical training and many Iranians who take up clerical studies train there. This is especially true with the marjas, or the principle guiding cleric in Shi’a Islam, such as Ayatollahs Khomeini, Khoei, and al Sistani.