S T R AT E GI C E N V I RON M E N T not only at massively reducing Iranian oil exports and thus its most important foreign exchange earner, but also as far as possible at isolating Iran economically, with secondary economic sanctions, which also work against third countries and foreign companies, playing a major role. In this way, the USA wants to tighten and extend indefinitely the existing restrictions on Iran’s nuclear programme, as well as putting a stop to its ballistic missile programme and its regional expansion of its power. The US views the JCPOA as a political agreement and not a legally binding treaty. However, in the view of the other states involved and in particular Iran, the US action constitutes a breach of the treaty. The EU has attempted, so far largely in vain, to continue facilitating trade with Iran. This shows once more clearly the severely limited scope for economic and political action vis-à-vis the USA. The initial effect of US sanction provisions has been to cut Iranian crude oil exports by at least half, to approximately one million barrels a day. This, together with further measures and in particular the de facto exclusion of Iran from international payment transactions, will hit Iran hard economically. The external value of the Iranian currency dropped by more than 70 per cent between March and December 2018. The inflation rate already stands at around 30 per cent and is still rising. The International Monetary Fund is forecasting a fall in Iran’s economic output of around 3.6 per cent for 2019. Syria and Libya: crises persist The Syrian regime and its Russian and Iranian allies have strategically defeated the rebels, but have not yet secured victory. It still needs to regain control over the entire territory. The Syrian armed forces are understaffed and capable only of limited offensives. They are therefore still reliant on military support from Russia and on the militias financed and led by Iran. Despite massive losses, the ʻIslamic Stateʼ and other jihadist groups remain capable of launching major attacks. Libya still lacks the political and military strength to restore the state’s monopoly on the use of force. The main features of the currently prevailing anarchy are two weak competing centres of power, a multitude of militias, which often engage in criminal activities, and a continuing threat from cells of the local affiliate of the ʻIslamic Stateʼ. Oil production, Libya’s main legal source of foreign exchange, is constantly under threat of disruption. 26 S I T UAT I O N R E PORT 2 0 1 9 | F I S