Fdd's overnight brief

Iran

The Trump administration is considering a more-aggressive enforcement of its economic sanctions on Iran—targeting more companies and financial institutions that do business with the Islamic Republic in an attempt to cut off lucrative sources of U.S. dollar-denominated hard currency, U.S. officials said. – Wall Street Journal

Saudi Arabia has pledged to boost oil output if needed, as the Trump administration starts banning all Iran oil exports on Thursday. But behind the scenes, Riyadh and Washington face a potentially weekslong showdown over the number of extra barrels the kingdom would supply to global markets to keep crude prices stable. – Wall Street Journal

Iran will respond if other OPEC members threaten its interests, Oil Minister Bijan Zanganeh said on Thursday amid rising pressures from Washington to bring Iranian crude sales to zero with the help of Tehran’s regional rivals. – Reuters

The US is sanctioning friends and foes that import Iranian oil starting Thursday, but analysts say the White House might find it harder to eliminate Tehran’s energy exports than it expects and Trump administration officials are bracing for Iran’s response. – CNN

The former head of Iran’s State TV Mohammad Sarafraz has accused IRGC Intelligence Organization of obstructing attempts to counter financial corruption. Sarafraz who was appointed by Iran’s Supreme Leader Ayatollah Ali Khamenei as the head of the state TV in October 2014, resigned in May 2016 over a controversy created after his special inspector was allegedly told by IRGC Intelligence to leave the country or face detention as a “spy”. – Radio Farda

Foreign companies can choose to receive crude oil instead of hard currencies for the goods they sell to Iran, the CEO of Iranian National Oil Company said on Wednesday, May 1. – Radio Farda

The murder of an imam ought to provoke horror. But after a bodybuilder gunned down Mostafa Qassemi, a cleric in the western Iranian city of Hamedan, on April 27th over 100,000 people followed the killer on Instagram. Posts by his followers railed against Iran’s supreme leader, Ayatollah Ali Khamenei. “One less cleric,” women mutter on Tehran’s underground. – The Economist

Oil prices fell as much as 4% on Thursday, breaking through a key support level, as rising U.S. crude stockpiles helped offset concerns about a supply crunch. Crude futures declined despite a wave of geopolitical concerns, including political turmoil in Venezuela and the launch of new American measures aimed at driving Iran’s crude exports to zero. – CNBC

Turkey says it will not be able to diversify oil imports quickly after the United States ended sanction waivers on purchases from Iran, and Ankara continues to urge Washington to reconsider its decision. – Radio Free Europe / Radio Liberty

US President Donald Trump’s unexpected decision to ban all Iranian oil purchases after May 1 – ending exemptions for eight nations – came after hawkish economic and security advisors allayed the president’s fears of an oil price hike, according to three sources familiar with the internal debate. – Ynet

Mehdi Khalaji writes: In light of Iran’s economic hardship and international isolation, at least some hardline elites seem amenable to resuming negotiations with the United States, especially if President Trump wins a second term. They may believe he will pursue the same approach he took with North Korea—increase pressure on the regime to force it to negotiate, but rather than insist on solving all differences at once, simply start the negotiations and leave them more open-ended, trading with Tehran step by step based on mutual consent and readiness to concede. – Washington Institute

Arabian Peninsula

Saudi Arabia on Thursday temporarily released from custody at least four women’s rights advocates, according to a London-based Saudi human rights group and other activists. – Washington Post

Yemen’s Houthi rebels have launched armed drone attacks with far more precision and reach than the U.S. and its Gulf allies have publicly acknowledged, people familiar with the matter said, showing how readily available technology is creating new dangers for America and its allies in the Middle East. – Wall Street Journal

The Senate on Thursday fell short of the votes needed to override President Trump’s veto of legislation demanding an end of U.S. support for the Saudi-led military coalition operating in Yemen, a country plagued by more than four years of a devastating civil war. – Washington Post

Kenneth Pollack, Barbara Walter and Michael Knights write: In Washington, a growing chorus of analysts and politicians has called on the United States to step up, withdraw U.S. support for the Saudi war effort, and turn the UN-brokered cease-fire into a lasting peace. Doing so, they argue, is the only morally and strategically defensible course of action. But of all the options before the United States, this one is the least likely to stop the killing, the dying, and the complications for U.S. interests. – Foreign Affairs

Middle East & North Africa

Danish student Louisa Vesterager Jespersen, 24, and her friend Maren Ueland, 28, from Norway, were found dead in their tent with stab wounds to their necks. At least one of them was reportedly beheaded. Soon, video footage that appeared to have documented the brutal act circulated on social media in Morocco and Europe. On Thursday, two dozen suspects went to trial in Morocco in the case, including at least three men Moroccan officials say participated in the women’s killings. – Washington Post

Senior Iraqi officials are pressing to establish a special detention camp to isolate as many as 30,000 Iraqis who lived in the Islamic State’s final stronghold in ­Syria, captured in March by U.S.-backed forces. – Washington Post

Josh Rogin writes: The United States must increase its diplomatic and economic engagement in Iraq, declare its long-term commitment to Iraq’s security and push the Iraqi government to make sure another generation of young Americans and Iraqis don’t have to sacrifice more. – Washington Post

China

Beijing isn’t creating vassal states through predatory lending. But it is winning friends and influencing people—and allowing other problems to build up. The gargantuan international infrastructure-lending program is known both as “One Belt, One Road” and, more simply, “Belt and Road.” – Wall Street Journal

Deepening Chinese activities in the Arctic region could pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack, the Pentagon said in a report released on Thursday. – Reuters  

Satellite imagery reveals the regular presence of nuclear-powered ballistic missile submarines at the strategic base near the resort city of Sanya. Specialized surface warships and aircraft designed to protect the subs are prowling key waterways off the coast. Facilities at the base appear to have been built to store and load ballistic missiles. Antenna arrays that support the hunt for foreign submarines have appeared on Chinese-held islands in the hotly contested South China Sea. – Reuters

American negotiators locked in trade talks with China are likely to win more access to the country’s cloud computing market than initially expected, but Chinese commitments to curb industrial subsidies will probably fall short of U.S. demands, a U.S. Chamber of Commerce official said on Thursday. – Reuters

China’s first domestically built aircraft carrier is likely to enter into service this year, marking another advance in Beijing’s ability to project influence well beyond its shores, the Pentagon said Thursday in an updated assessment of Chinese military power. – Associated Press

China is continuing to modernize its armed forces in order to transform its military into a major global power and using espionage to steal cutting edge technology for military purposes, according to a newly released Pentagon report on China’s military. – CNN

The Pentagon says Chinese forces remain a growing threat, looking to “contest” the United States military at greater ranges from mainland China, according to a new report released Thursday afternoon. – Fox News  

China is working hard to bring new stealth fighters and bombers online, and the US is preparing to push back with its F-35 stealth fighter, a US general commanding US air assets in the Pacific region told Bloomberg. – Business Insider

Former vice president Joe Biden on Wednesday dismissed the notion that the United States should be worried about China as a geopolitical competitor, prompting criticism from Sen. Bernie Sanders (I-Vt.) as well as some Republicans who argued that Biden is underestimating the world’s second-largest economy. – Washington Post

Philip Bump writes: The problem with Biden’s comment isn’t only that it seems out-of-touch with the emerging reality. It is also that it brings to mind Biden’s (and Obama’s) 2012 dismissal of then-Republican presidential nominee Mitt Romney’s assertion that Russia was the United States’ “No. 1 geopolitical foe.” In this case, though, the evidence against dismissing China is more immediately obvious. – Washington Post

South Asia

Police say arrests and searches of dozens of locations linked to the perpetrators of the Easter bombings have turned up significant evidence that new attacks could be in the works. Despite a state-of-emergency dragnet that has yielded over 100 arrests in 10 days, Sri Lankan authorities say they are deeply concerned that a second series of attacks could target places of worship and schools of the majority Sinhalese Buddhist community[…]. – Wall Street Journal

The Islamic State group’s self-proclaimed “caliphate” may have collapsed in the Middle East but Asia provides fertile territory for a resurrection, analysts say, as last month’s bloody Easter Sunday suicide attacks in Sri Lanka have shown. – Agence France-Presse   

Islamist extremists in Sri Lanka are believed to be planning attacks on bridges in Colombo, authorities said, as they warned several conspirators in the Easter Sunday bombings that killed 257 people still at large. – Agence France-Presse

India will ask the global money laundering and terror finance watchdog to put Pakistan on a blacklist of countries that fail to meet international standards in stopping financial crime, Finance Minister Arun Jaitley said on Thursday. – Reuters

Sri Lanka’s Catholic cardinal received “foreign information” that attempts would be made this week to attack a church and another church institution, according to a letter he sent Thursday to church officials that later appeared on social media. – Associated Press

Ameena Hussein writes: Before the end of Sri Lanka’s civil war in 2009, radicalization on the east coast of Sri Lanka may even have been encouraged by governments that believed they could use it to their advantage in the much larger push to defeat the Liberation Tigers of Tamil Eelam. They gave visas to extremist foreign preachers to spread their ideology, and allowed religious schools to be built without adequate oversight of the curriculum. The governments seemed unaware they had caught another tiger by the tail. And some Muslim leaders have used this radicalization to ensure they would stay in power. – New York Times

Sadanand Dhume writes: Islamic State has proved capable of recruiting well-off and apparently well-integrated Muslims. Two of the suicide bombers in Sri Lanka were sons of a wealthy spice trader. Inshaf Ibrahim, who blew himself up in the Cinnamon Grand Hotel, owned a copper-pipe factory and drove a Toyota Land Cruiser. Another bomber studied in England and Australia. – Wall Street Journal

Europe

The U.S. has nearly tripled its natural-gas exports to the European Union since July and signed new licenses Thursday seeking to establish American energy as an EU mainstay. Washington’s liquefied natural-gas push comes as the EU seeks to preserve a trade truce with President Trump and avoid potential U.S. tariffs on cars. – Wall Street Journal  

The Netherlands, Austria “and all too often Germany” are preventing deeper euro zone integration, European Commission President Jean-Claude Juncker told German newspaper Handelsblatt. – Reuters  

Germany’s leading Jewish organization expressed alarm Thursday over footage of flag-waving neo-Nazis in self-styled uniforms marching through an eastern German town on May Day unhindered by police. – Associated Press

Britain’s former defense secretary ferociously denied allegations that he leaked details from private government discussions about the Chinese telecommunications company Huawei, as opposition leaders called Thursday for a criminal investigation into the scandal. – Associated Press

President Donald Trump has been blunt with his demands on German defense spending, accusing Berlin of owing “billions.” Germany’s Social Democrats, have just as clear a message: It’s not going to happen. – Bloomberg

UK Labour Party leader Jeremy Corbyn wrote in a 2009 opinion article that the Israeli government had “unbelievably high levels of influence” over “parts of the media,” comments that re-emerged on Thursday and led to further allegations of antisemitism against him. – Jerusalem Post  

Controversial UK Labour party leader Jeremy Corbyn is embroiled in another antisemitism scandal after it was revealed that he wrote the forward to an antisemitic book in 2011. – Algemeiner

The United States is installing new military leadership in Europe at a moment of heightened worries about Russian aggression, doubts about the future of arms control and rising tensions among NATO allies. – Associated Press

United States

The number of hate crimes in New York City has risen 67% this year, with anti-Semitic incidents accounting for the biggest share, police officials said Thursday. The increase comes as the New York Police Department continues to see record-low numbers in most other crimes around the city, officials said. – Wall Street Journal

Trade negotiations between the United States and China are entering the final stage, but a deal is expected to fall short of addressing several key Trump administration goals, including combating Chinese cybertheft and state subsidies at various levels of the Chinese government, officials from a leading American business group said on Thursday. – New York Times

Leaders at a Southern California synagogue knew they needed to increase security around their front door a year before a gunman walked through it and opened fire. The Chabad of Poway synagogue sought a $150,000 federal grant to install gates and more secure doors, but it took nearly a year for the application to be approved and the money to be distributed. It was awarded in late March. – Associated Press

Three teenagers on Long Island have been arrested on charges they plotted to build and detonate a bomb at their school. – Associated Press  

Cybersecurity

Facebook Inc. is recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system on the back of its gigantic social network. The effort, should it succeed, threatens to upend the traditional, lucrative plumbing of e-commerce and would likely be the most mainstream application yet of cryptocurrency. – Wall Street Journal

Facebook has banned right-wing conspiracy theorist Alex Jones, Nation of Islam leader Louis Farrakhan and other far-right figures, saying they violated its ban against hate and violence. – Al Jazeera

Whether presidential campaigns have learned from the cyberattacks is a critical question ahead as the 2020 election approaches. Preventing the attacks won’t be easy or cheap. – Associated Press  

Russia has taken a major step in it’s ambition to cut itself off from the global internet and create closed network only accessible inside the country. – Business Insider

If special counsel Robert Mueller’s report on Russian efforts to help President Trump’s 2016 campaign failed to answer all the questions from his Democratic rivals, it nonetheless made one point perfectly clear: the necessity of protecting themselves from foreign hackers. – Washington Examiner

Long War

He was a high-school dropout from Queens who worked in a coffee cart in downtown Manhattan in 2006 when a friend handed him an audiotape of a radical Muslim cleric. That was the start of a personal odyssey that sent the young man, Najibullah Zazi, to fight in Afghanistan, where a senior Al Qaeda official trained him to build bombs and sent him back to the United States, where he and two friends planned a suicide attack in the New York City subway system. – New York Times

The appearance of the Islamic State’s leader in a video this week after a five-year absence appeared to be an effort to signal that the group is preparing for a long global war despite its territorial defeat, terrorism experts say. – Washington Post

An Australian court jailed for seven years on Friday the leader of a group of men who planned to travel by motorboat from Australia to the Philippines to join Islamic State fighters. – Reuters

Jason M. Blazakis writes: ISIS remains relevant not because of al-Baghdadi but in spite of him. First, the organization retains an effective and diverse communication structure highlighted by its al-Naba weekly newsletter. Al-Naba is a glossy, graphic-laden publication that is attractive to a younger audience. The ISIS self-styled news agency al-Amaq informs supporters of breaking ISIS attacks. – The Hill