Wed 03 February 2010 | 08:30 GMT Text size:

Dennis C. Blair

The USA's director of national intelligence has not closed the door on attempts to influence Iran over its nuclear program.

Dennis C. Blair injected the faint note of optimism in the Annual Threat Assessment of the US Intelligence Community which he presented at an open hearing of the Senate's Select Committee on Intelligence on 2 February.

"We continue to judge Iran’s nuclear decisionmaking is guided by a cost-benefit approach, which offers the international community opportunities to influence Tehran. Iranian leaders undoubtedly consider Iran’s security, prestige and influence, as well as the international political and security environment, when making decisions about its nuclear program," Blair said in the report.

He expressed concern at the potential risks posed by Iran's nuclear program.

"The Iranian regime continues to flout UN Security Council restrictions on its nuclear program. There is a real risk that its nuclear program will prompt other countries in the Middle East to pursue nuclear options."

The USA does not know if Iran will eventually build nuclear weapons or not, Blair said.

"We continue to assess Iran is keeping open the option to develop nuclear weapons in part by developing various nuclear capabilities that bring it closer to being able to produce such weapons, should it choose to do so. We do not know, however, if Iran will eventually decide to build nuclear weapons."

He went on to look at some of the capabilities that Iran is developing.

"First, published information from the International Atomic Energy Agency indicates that the number of centrifuges installed at Iran’s enrichment plant at Natanz has grown significantly from about 3,000 centrifuges in late 2007 to over 8,000 currently installed. Iran has also stockpiled in that same time period approximately 1,800 kilograms of low-enriched uranium. However,
according to the IAEA information, Iran also appears to be experiencing some problems at Natanz and is only operating about half of the installed centrifuges, constraining its overall ability to produce larger quantities of low-enriched uranium.

"Second, Iran has been constructing — in secret until last September — a second uranium enrichment plant deep under a mountain near the city of Qom. It is unclear to us whether Iran's motivations for building this facility go beyond its publicly claimed intent to preserve enrichment know-how if attacked, but the existence of the facility and some of its design features
raise our concerns. The facility is too small to produce regular fuel reloads for civilian nuclear power plants, but is large enough for weapons purposes if Iran opts [to] configure it for highly enriched uranium production. It is worth noting that the small size of the facility and the security afforded the site by its construction under a mountain fit nicely with a strategy of keeping the option open to build a nuclear weapon at some future date, if Tehran ever decides to do so.

"Iran’s technical advancement, particularly in uranium enrichment, strengthens our 2007 NIE [National Intelligence Estimates] assessment that Iran has the scientific, technical and industrial capacity to eventually produce nuclear weapons, making the central issue its political will to do so. These advancements lead us to reaffirm our judgment from the 2007 NIE that Iran is technically capable of producing enough HEU [highly enriched uranium] for a weapon in the next few years, if it chooses to do so. We judge Iran would likely choose missile delivery as its preferred method of delivering a nuclear weapon. Iran already has the largest inventory of ballistic missiles in the Middle East and it continues to expand the scale, reach and sophistication of its ballistic missile forces — many of which are inherently capable of carrying a nuclear payload."

Blair said that further information on Iran's weapons programs was classified

"Iran’s growing inventory of ballistic missiles and its acquisition and indigenous production of anti-ship cruise missiles (ASCMs) provide capabilities to enhance its power projection. Tehran views its conventionally armed missiles as an integral part of its strategy to deter — and if necessary retaliate against — forces in the region, including US forces. Its ballistic missiles are inherently capable of delivering WMD, and if so armed, would fit into this same strategy."

Elsewhere in the threat assessment, Dennis Blair looked at the political and economic situation in Iran. He noted that the regime faced a major challenge last summer, when perceptions of fraud in the June presidential election provoked large-scale popular demonstrations and infighting among regime elites.

Political turmoil but no economic crisis

"Despite Iran’s internal turmoil, we judge that Tehran’s foreign policy will remain relatively constant — driven by a consistent set of goals — and that its efforts to expand its regional influence and ongoing support for terrorist and militant groups will continue to present a threat to many countries in the Middle East and to US interests," Blair said.

"Iran’s political crisis has widened splits in the country’s political elite and undercut the regime’s legitimacy. Although Iranian politics remain in flux, Supreme Leader Khamenei, President Ahmadinejad, and their hardline conservative allies are likely to focus over the next year on consolidating their power."

While the Iranian economy has suffered from the fall in oil prices, it is not in crisis, Blair said.

"Iran’s economic performance has been hurt by softening oil prices and longstanding Iranian policies that discourage the private sector and foreign investment, but the economy is not in crisis. Iran’s economy is heavily dependent on oil — hydrocarbons provide 80 percent of its foreign exchange revenue, making Tehran vulnerable to downturns in oil prices. Nonetheless, Iran maintains foreign currency reserves to hedge against a moderate fall in oil prices."

He said that international sanctions and pressure had aggravated Iran’s economic woes by disrupting and increasing the cost of international business, slowing some projects and programs, and  contributing to Iran’s economic slowdown. However, Tehran has made contingency plans to deal with future additional international sanctions by identifying potential alternative suppliers of petrol including China and Venezuela.

"Tehran also has resorted to doing business with small, non-Western banks and dealing in non-US currency for many financial transactions. Iranian opposition press has reported the involvement of the Revolutionary Guard and Iranian intelligence in the smuggling of crude oil as a way of both skirting and profiting from sanctions."

He thought that further sanctions could still have an effect on the economy.

"Despite these activities and Iran’s gasoline subsidy cuts, which could in part serve to mitigate some effects of the embargo, we nonetheless judge that sanctions will have a negative impact on Iran’s recovery from its current economic slowdown."

Looking at Iran's influence and ability to intervene in the region, Blair said that Tehran would try to ensure the continued political dominance of its Shia allies in Iraq, expand its political and economic ties to Iraq, and limit Washington’s influence. The USA thinks that Tehran continues to train, equip and fund selected Iraqi Shia militant groups.

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Blair said that in Afghanistan, Iran is providing political and economic support to the Karzai government, but also developing relationships with leaders across the political spectrum, and providing lethal aid to elements of the Taliban to block Western, especially US, entrenchment in the country.

Tehran continues to support groups such as Hezbollah in Lebanon, Hamas in Palestine and the Palestinian Islamic Jihad, which it views as integral to its efforts to challenge Israeli and Western influence in the Middle East, Blair said.