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Ex-Trump Adviser Warns of Iranian Cyber Threat: Iran Update

A Pentagon analysis of the attack suggested the missiles were aimed at unpopulated parts of the bases.

Ex-Trump Adviser Warns of Iranian Cyber Threat: Iran Update
U.S. Vice President Mike Pence. (Photographer: Kevin Dietsch/UPI/Bloomberg)  

(Bloomberg) -- The prospect of open war in the Gulf receded Thursday after Donald Trump backed away from threats to strike Iran. Oil prices fell and stocks rose.

In televised remarks to the nation Wednesday, Trump defended the U.S. decision to kill top Iranian general Qassem Soleimani, provoking retaliatory strikes against U.S. bases in Iraq. Iran’s Revolutionary Guard said the missiles were intended to hit military equipment, not servicemen.

Ex-Trump Adviser Warns of Iranian Cyber Threat: Iran Update

Here is a rundown of major events in Washington time since Wednesday:

Key Developments:

  • Trump backs away from war with Iran after harmless attack
  • Oil steadies at pre-attack levels as concerns over supply disruptions ease
  • New U.S. sanctions likely to target Iran’s metals sector, key regime figures

Ex-Trump Adviser Warns of Iranian Cyber Attack (1:00 p.m.)

Tom Bossert, a former senior homeland security adviser to Trump, predicted that Iran will likely carry out cyber attacks in the coming weeks as tensions between Tehran and Washington remain high.

Bossert, who is now the chief strategy officer at Trinity Cyber Inc., a cyber-security company, made the comments Thursday in an interview with Bloomberg News.

Bossert also said he thought Iran would try to blame the U.S. for the crash of a Ukrainian airplane that occurred near Tehran shortly after Iran had launched missile attacks against two U.S. military outposts in Iraq.

Trump Says U.S. Sanctions ‘Substantially’ Increased (12:24 p.m.)

Trump said Thursday that he had signed off on a Treasury Department plan to increase U.S. sanctions on Iran “substantially” following the Islamic Republic’s missile attack on American bases in Iraq.

“It’s already been done, yeah. We’ve increased them,” Trump told reporters at the White House. “They were very severe but now it’s increased substantially. I just approved it a little while ago with Treasury.”

He declined to say which individuals or companies the sanctions would impact. He said to expect a formal announcement.

Pence Says Iran Intended to Kill Americans (9:31 a.m.)

Iran intended to kill Americans in its missile attack that struck two U.S. bases, Vice President Mike Pence said, contradicting a Pentagon analysis described by people familiar with the matter and comments by an Iranian military official.

Pence, in a pair of interviews aired Thursday morning, dismissed suggestions that Iran may have intentionally aimed its missiles away from populated areas of the Ayn al-Asad air base and one near the city of Erbil.

“There’s no doubt in my mind that when the Iranians fired those missiles, they were intending to kill Americans,” Pence told Fox News. In a separate interview with NBC, he added: “The ballistic missiles fired at American bases al-Asad and Erbil we believe were intended to kill Americans. We have intelligence to support that that was the intention of the Iranians.”

A Pentagon analysis of the attack suggested the missiles were aimed at unpopulated parts of the bases, according to the people familiar with the matter. Satellite imagery of the bases provided by Planet Labs showed damaged aircraft hangers and other structures at the al-Asad airbase in western Iraq following the strike.

Iran’s Revolutionary Guard Corps said they were targeting American military equipment, not troops.

Intel Suggests Iran Urging Militias Not to Attack U.S.: Pence (8:36 a.m.)

The U.S. has received indications that Iran has asked allied militias in the Middle East not to carry out attacks against American interests, Vice President Mike Pence said in comments to Fox.

“We are hearing some intelligence to suggest that Iran is sending a message to the militias, not to move forward,” he said. “That being said, we’re ready,” Pence said, “As the president said yesterday, we’re ready for everything.”

Iran Guards Say Targeted U.S. Military Equipment, Not Forces (7:45 p.m.)

Iran’s Revolutionary Guard Corps said they were targeting American military equipment, not forces, in a series of missile strikes in Iraq this week that briefly raised the prospect of war.

“We were not after killing. We were after hitting the enemy’s military apparatus,” Islamic Revolutionary Guards’ Aerospace Force Commander Amir Ali Hajizadeh was cited as saying by semi-official Fars news agency. “Iran’s attack on U.S. bases was the beginning of a larger operation that will carry on across region.,” he said.

Hajizadeh said Iran could kill 500 Americans in the first phase of an attack and thousands more in the next 48 hours.

Defense Stocks Look Expensive Amid Receding Tensions, Citi Says (7:42 a.m.)

“High-flying” defense stocks may give up some of their recent gains as it becomes clear that despite recent headlines, not a lot has changed in the Middle East relating to earnings fundamentals, Citi analyst Jonathan Raviv wrote in a note.

Buy-rated Lockheed and neutral-rated Booz Allen now screen as the most expensive defense stocks in Citi’s universe, with its defense coverage up 1%-5% since the Suleimani strike on Jan. 2, the analyst added.

Saudi Arabia Plans Defense System to Block Drones: Defense News (6:15 a.m.)

State-owned Saudi Arabian Military Industries is working with international partners to develop a system to protect critical infrastructure and military bases against drones, Defense News reported, citing chief executive Andreas Schwer. The system is in a testing stage, with a near-term rollout planned. Saudi Arabia has faced repeated attacks in recent years from drones operated by a pro-Iranian Yemeni militia. A drone and missile strike also damaged a key oil installation in September, hitting global markets.

Johnson to Rouhani: U.K. Is Committed to Nuclear Deal (6:26 a.m.)

British Prime Minister Boris Johnson called for an end to hostilities during a 20-minute phone call with Iranian President Hassan Rouhani, and said the U.K. remains committed to the 2015 nuclear deal.

The deal “is the best arrangement currently available to deliver the goal of stopping Iran having a nuclear weapon,” Johnson’s spokesman, James Slack, told reporters in London on Thursday. Slack also said the U.K. is discussing with allies what the consequences should be for a breach in the terms of the nuclear agreement.

Rouhani told Johnson not to follow the U.S. stance, saying that London would not have peace or security today without Soleimani’s efforts, according to his website. The general coordinated fighters on the front lines of the war against Islamic State in Iraq and Syria.

Rouhani also spoke with European Council president Charles Michel, saying his country was ready for closer cooperation with Europe and would be disappointed if the Europeans got behind Trump’s policy of increasing pressure.

Islamic State’s Revival Is Back in Play as Iraq Stares Into Void (4:00 a.m.)

When Iraq’s prime minister declared a final victory over Islamic State in December 2017, he paid tribute to the militias that had repelled the jihadists. Many of them had been guided by Soleimani. Among the many potentially dangerous by-products of Soleimani’s killing by an American airstrike last week and the new chapter of upheaval for Iraq is that it could give rise again to the conditions that Islamic State can exploit.

Tehran and Washington were targeting a common enemy in the three-year battle against the group. Iranian-backed militias did a lot of the combat fighting while the U.S. provided air power. Now they risk turning Iraq into a theater of conflict again just as the country seeks to extricate itself from the influence of outside forces.

Trump’s Iran Strike Delights Supporters, Despite 2016 War Pledge (4:00 a.m.)

Trump’s loyal political base is standing by his decision to kill Soleimani, polls show, potentially providing a boost during an election year even though the move may undermine a key 2016 pledge to end U.S. military involvement in the Middle East.

Trump’s campaign has used Soleimani’s killing to appeal to its supporters, sending an online poll on Jan. 5 with leading questions like “Do you stand by President Trump in his decision to take out the very dangerous Iranian terrorist leader, Qassem Soleimani?”

In Michigan, where Trump edged Hillary Clinton by less than 11,000 votes in 2016, Brian Droscha, a Republican commissioner in Eaton County, says that he’s heard nearly unanimous praise for the Jan. 2 strike.

“That made a huge impact,” Droscha said. “We have a president that’s going to stand up. It tells them that we’re not going to put up with anything.”

Oil Steadies at Pre-Attack Levels (2:32 a.m.)

Oil steadied as investors weighed the risk of further escalation in the conflict between the U.S. and Iran that has so far spared production and exports from the Middle East.

Futures were little changed on Thursday, back at levels they were before the U.S. air strike that killed a top Iranian general last week, after whipsawing between gains and losses on Wednesday.

Germany’s Maas Says Tensions Have ‘Significantly Eased’ (1:14 a.m.)

German Foreign Minister Heiko Maas said tensions in the Middle East have “significantly eased” following Trump’s remarks calling for a deal with Iran.

Germany is discussing with Britain and France how to rescue the Iran nuclear accord, and the European Union should play a greater role to help bring peace and stability to the region, Maas said in an interview with ARD television. The latest rocket attacks on Baghdad probably were not carried out by Iran, or by forces sponsored by Tehran or any other state, but by one of the many “independent groups” in the region, he added.

New Rocket Attack Targets Baghdad’s Green Zone (4:16 p.m.)

Sirens went off at the U.S. Embassy in Baghdad after several rockets hit the Green Zone, home to many government buildings. No casualties were reported, according to a statement issued from the media center of the Iraqi security forces on Twitter. It wasn’t immediately clear who was behind the attack.

Read more:

--With assistance from Zaid Sabah, Arsalan Shahla, Golnar Motevalli, Yasna Haghdoost, Nick Wadhams, Iain Rogers, Robert Hutton, Josh Wingrove and Lin Noueihed.

To contact the reporter on this story: Jennifer Jacobs in Washington at jjacobs68@bloomberg.net

To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Joshua Gallu, Justin Blum

©2020 Bloomberg L.P.