Hackers possibly linked to Iran breached tank readers at US gas stations: CNN report

Hackers suspected to have ties to Iran may have infiltrated computerized fuel monitoring systems at gas stations across the United States, according to CNN on Friday.

The report said the suspected cyber intrusions targeted automatic tank gauge systems, or ATGs, which are used to track fuel levels and detect leaks in underground storage tanks at gas stations.

The CNN report suggested that federal investigators think the activity was carried out by hackers linked to Iran but officials have not publicly connected the operation to a specific branch of the Iranian government.

U.S. officials told CNN that some of the systems had been connected to the internet without password protection, potentially allowing hackers to access and manipulate digital readings and display settings. 

Investigators warned that falsified readings could hide leaks or create other safety problems.

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Pentagon Draws Up Strike Plans as Trump Weighs Renewed Iran Assault

The Pentagon has prepared plans for a possible renewed military campaign against Iran as President Donald Trump weighs whether to resume strikes following stalled negotiations and mounting tensions in the Middle East.

According to The New York Times, U.S. and Israeli officials have intensified military preparations for the possible return of combat operations as early as next week if diplomatic efforts fail.

Defense Secretary Pete Hegseth signaled the administration is prepared to escalate.

“We have a plan to escalate if necessary,” Hegseth told lawmakers this week.

Trump, returning from China on Friday, indicated Tehran’s latest peace proposal was a non-starter.

“I looked at it, and if I don’t like the first sentence, I just throw it away,” Trump told reporters aboard Air Force One.

The president has repeatedly warned Iran against dragging out negotiations.

“They’re either going to make a deal, or they’re going to be decimated,” Trump said earlier this week. “So, one way or another, we win.”

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“Send Us A Tip”: U.S. Dangles $15 Million Reward For New Intel On Iran’s Drone Network

There is little doubt that Iran’s Shahed drone threat has become a major concern, menacing surrounding Gulf states, commercial tanker traffic in the Strait of Hormuz, and U.S. bases across the region. This backdrop helps explain why the State Department’s Rewards for Justice program has now put up to $15 million for new information in connection with an already sanctioned Iranian drone-production network linked to the IRGC-Qods Force. 

Rewards for Justice has named Kimia Part Sivan Company (KIPAS), which the State Department says serves as the drone-production arm of the IRGC-Qods Force. KIPAS has tested drones, supported drone transfers to Iraq, and procured foreign-made components for Iran’s drone program.

“The IRGC has financed numerous terrorist attacks and activities globally, including via its proxies outside Iran, such as Hamas, Hizballah, and Iran-backed militia groups in Iraq. The IRGC funds its international activities – in part – through sales of military equipment, including UAVs. Proceeds from Iran’s sale of weapons and UAVs, including to buyers in Russia, also benefit the Iranian military, including the IRGC-QF,” Rewards for Justice wrote on its website.

The U.S. Treasury’s OFAC already sanctions KIPAS and appears on the Specially Designated Nationals list. OFAC designated KIPAS on October 29, 2021, for materially assisting the IRGC with its drone program.

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Musical Chairs

Yesterday, Trump spoke with Xi in Beijing. While markets kept a watchful eye on any headlines about the war in Iran, palates were left dry as only tepid announcements dripped out, such as that China “offered help” on Iran and “pledged not to send weapons.” What they did not manage to evade was a conversation about Taiwan. During the two and a half hour conversation with Trump, Xi underscored that US intervention in Taiwan could trigger a “highly dangerous situation.” While Rubio underscored that the topic of American arms sales to Taiwan wasn’t a major focus of discussion, it likely will be when Congress’ approved USD 14bn arms sale to Taiwan lands on Trump’s desk, and again when Xi visits the White House in September.

While the US and China are stalled in the geopolitical arena, the financial scene seems to be bearing fruit. Treasury secretary Scott Bessent announced that conversations around the creation of a “Board of Investment” were underway, and that tariffs would be reduced or removed for products that the US doesn’t plan on reshoring, like fireworks. China also agreed to buy 200 “big” Boeing planes, according to Trump, which would mark the first significant Chinese purchase of Boeing jets since the last time Trump went to Beijing in 2017. China also hinted that they may intend to buy more US energy to compensate for flows disrupted by the war.

Though Iran didn’t appear to produce much in the way of headlines, the Strait is still closed, and Brent crude oil is still trading above $100/bbl at $106/bbl at the time of writing. According to Reuters, the IRGC announced that some 30 vessels have crossed the Strait since Wednesday (with Tehran’s permission), and transit is being permitted for “some” Chinese vessels.

US Treasury yields closed higher after hotter-than-expected trade price data for April printed, with import prices up 1.9% m/m and export prices up 3.3% m/m. These were the fastest monthly price index increases since early 2022 for both. However, the import price index, excluding petroleum, registered more modest gains of only 0.7% which, while hotter than the expected print of 0.5%, is cooler than levels seen as recently as January and February of this year. USD was the best performing G10 currency yesterday on a one day view. Yesterday afternoon saw a surge in yields across the board, absent a clear driver in sparse news flow, as the 2 year closed 3bp higher, above 4.00%.

Warsh was recently voted in as Fed Chair by the US Senate, but this creates a game of grown up musical chairs for the Board of Governors. There can only be seven Governors on the FOMC, and with Powell not giving his seat up just yet, if no one steps down, we have eight. However, Stephen Miran has announced that he would be stepping down as Governor and has submitted his resignation, effective upon Warsh being sworn in. Miran also assured that while he believes it’s important that the Fed only have one chair, Powell could help Warsh through the transition.

Bloomberg’s Anna Wong hit Powell with an uncomfortable reality check: “if Powell’s Fed had been more active in getting its own house in order following a massive miss on inflation, outsiders would have had less motive and opportunity to attack.” Powell’s Fed was criticized for its slow response to the inflationary pressures which led to “the Great Inflation.” Wong summarizes that “[Powell’s] limited push for accountability, such as a thorough review of Fed’s forecasting framework, opened the door to the nomination of a more aggressive outside like Warsh, who has vowed to ‘break some heads’ at the Fed. The moral of story: Get your own house in order or someone will do it for you.”

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FBI offers $200K reward for ex-U.S. agent charged with espionage for Iran

A $200,000 reward is being offered by the Federal Bureau of Investigation (FBI) for information regarding the arrest of Monica Witt, a former U.S. service member and counterintelligence agent, who is charged with espionage for Iran.

On Thursday, the FBI announced in a statement that Witt, 47-years-old, was indicted by a federal grand jury in the District of Columbia in February 2019 on espionage charges, including allegedly transmitting national defense information to the Iranian government.

Witt intentionally provided information that endangered U.S personnel and their families who were stationed overseas and conducted research on behalf of the Iranian regime which allowed them to target her former colleagues in the U.S. government, according to the statement.

“Monica Witt allegedly betrayed her oath to the Constitution more than a decade ago by defecting to Iran and providing the Iranian regime National Defense Information and likely continues to support their nefarious activities,” said Daniel Wierzbicki, special agent in charge of the FBI Washington Field Office’s Counterintelligence and Cyber Division.

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US Trapped by Iran’s Resilience; Why the Solution Is Agreement, Not Attrition

In recent months, a painful but increasingly undeniable conclusion has begun to emerge across Western think tanks, mainstream media, and U.S. intelligence assessments: contrary to Washington and Tel Aviv’s initial expectations, Iran has neither collapsed, fragmented, nor moved toward surrender. On the contrary, the conflict has exposed layers of what can only be described as Iran’s “structural resilience” – a resilience many in the West either underestimated or failed to include in their strategic calculations altogether. The central question is no longer whether the United States can inflict damage on Iran. The real question is whether such pressure is actually capable of producing Washington’s desired political outcome.An increasing number of Western analyses now suggest the answer is no. The United States and its allies are gradually realizing that they are confronting a country capable of enduring pressure, reproducing internal control, managing crises, and exporting the costs of war beyond its borders. This reality has drawn Washington into what may be called “the trap of Iranian resilience” – a situation in which continued pressure no longer changes Tehran’s behavior but instead exponentially raises the costs for America itself.

In the early stages of escalating confrontation, the dominant assumption in Washington was that a combination of military strikes, maritime pressure, infrastructure destruction, and psychological warfare could disrupt Iran’s decision-making system. Yet even some recent U.S. intelligence assessments now acknowledge that Iran possesses the capacity to withstand sustained pressure over a prolonged period. When classified evaluations speak of Iran’s ability to endure months of maritime pressure and blockade, it effectively means that America’s most important coercive lever has failed to produce the rapid strategic results initially anticipated. This issue extends far beyond the military battlefield. One of the most significant dimensions of Iran’s resilience lies in its ability to transfer the costs of conflict to the global economy. Rising insecurity along energy routes, scattered attacks in strategic waterways, and disruptions to maritime security have directly affected global energy markets. The surge in oil prices beyond psychologically critical thresholds is not merely an economic indicator; it is a geopolitical message. Iran has demonstrated that if it is forced to bear the costs of war, those costs will not remain confined within its own borders. Instead, part of the burden will be shifted onto the global economy, international energy markets, and even the domestic political environment inside the United States. This is precisely where America’s strategy begins to erode. Washington has entered a conflict that becomes more costly the longer it continues – from inflationary pressure and domestic political divisions to the depletion of military stockpiles and growing criticism regarding the war’s unclear objectives. What was initially framed as an operation to rapidly contain Iran has increasingly become a stage upon which the limitations of American power are being exposed.

Inside Iran, meanwhile, the war has not produced the kind of social collapse many Western circles expected. New Western analyses openly acknowledge that the wartime atmosphere has actually helped the Iranian state reassert security control over public space. The political system has relied on loyalist networks, security organization, and the cohesion of the regime’s hard core to reinforce social control. In other words, rather than weakening the political structure, the conflict has given it an opportunity to redefine and rebuild its security order. This point is strategically significant for the United States because a major part of the initial calculations rested on the assumption that external pressure could widen internal fractures and transform public dissatisfaction into political crisis. Yet even some Western media outlets now concede that the wartime environment has reduced the visibility and activity of opposition groups while restoring a more securitized atmosphere in urban spaces. This means one of the central indirect objectives of maximum pressure has also failed to materialize.

At the same time, Iran’s power structure has not suffered the kind of paralysis Western strategists anticipated. Recent intelligence assessments suggest that even under wartime conditions, Iran’s political system has managed to establish a form of controlled distribution of power – a model in which decision-making is coordinated across institutions, preventing a complete breakdown of command structures. This is precisely what distinguishes Iran’s structural resilience from many other regional actors. In numerous states, severe military pressure can trigger the collapse of the chain of command. In Iran, however, the system appears designed to preserve operational continuity even under crisis conditions.

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Kuwait Accuses Iran of Attacking Island with Chinese-Funded Port

Kuwait on Tuesday arrested four alleged members of Iran’s Islamic Revolutionary Guard Corps (IRGC) and accused them of attempting to infiltrate Bubiyan Island, a Kuwaiti territory close to shipping lanes and oil fields that has a port under construction with Chinese funding.

Bubiyan is the largest island under Kuwait’s control in the northern Persian Gulf, close to the border with Iraq. It is sparsely inhabited at the moment, but will change with the completion of the Mubarak al-Kabeer Port, a massive project under construction with Chinese assistance as part of Beijing’s Belt and Road Initiative (BRI).

The ambitious $4.1 billion port is expected to become a major hub for container ships, greatly increasing Kuwait’s trading profile and China’s economic influence on the region. The facility could also be helpful for shipping from Iraq and Iran to Red Sea trade routes.

The initial stage of construction was completed in 2014, while Kuwait hopes the port will become operational before the end of 2026. Mubarak al-Kabeer is very important to the “Kuwait 2035” project, an agenda modeled after Saudi Arabia’s Saudi Vision 2030 initiative to reduce the country’s dependence on oil for revenue.

According to the Kuwaiti Interior Ministry, on May 1 a fishing boat “specially chartered to carry out hostile actions against Kuwait” approached Bubiyan Island with six Iranians on board. Five were apparently IRGC officers, while the sixth was the captain of the chartered boat.

The IRGC is the elite theocratically-controlled wing of the Iranian military and has been designated a terrorist organization by the U.S. government and European Union (EU). IRGC units handle most of Iran’s skullduggery in other countries, including recruiting and supplying proxy forces and destabilizing other Middle Eastern governments.

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Treasury Department Alerts US Banks To Suspected Iranian Money Laundering Efforts

The U.S. Treasury Department’s Financial Crimes ​Enforcement Network (FinCEN) on May 11 issued an alert to financial institutions warning them of efforts by ​the Iranian Islamic Revolutionary Guard Corps (IRGC) to evade sanctions.

FinCEN said in a statement that the IRGC has been facilitating and laundering the proceeds of illicit oil sales using networks of financial facilitators and shell companies. The alert provides red flags on the IRGC’s oil smuggling, digital assets, and front-company abuse to aid financial institutions in detecting and reporting suspicious activity, the statement said.

Treasury Secretary Scott Bessent said that financial institutions have a responsibility to stop this activity.

Degraded by Economic Fury, the Iranian military is desperately trying to fund its weapons programs and terrorist proxies,” Bessent said.

“Treasury will continue to deny the Islamic Revolutionary Guard Corps access to the financial networks it exploits to fund its terrorist acts. Financial institutions should be on notice that they have a responsibility to detect suspicious activity and stop it in its tracks.”

The Treasury network describes the IRGC as a parallel organization to Tehran’s regular armed forces, which reports directly to the leader, Ayatollah Mojtaba Khamenei. The IRGC is a U.S.-designated foreign terrorist organization.

Shadow Banking

FinCEN says the IRGC can make money from oil sales by misrepresenting its commercial activities. It smuggles oil using a “shadow fleet” of vessels that operate outside normal maritime rules and are often owned and operated by companies outside Iran.

Proceeds are then laundered through “shadow banking” networks to sell their oil and commodities abroad.

“By using front company accounts outside Iran to receive and remit payments, sanctioned entities like the IRGC are able to conduct transactions through the international financial system without repatriating funds to Iran,” FinCEN said.

The network says that with these proceeds, Iran can fund the procurement and development of weapons, as well as fund terrorist activity abroad.

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Who’s Your Daddy Now? Failing War Empowering Euros To Break With Trump

Nearly a year ago, NATO Chief Mark Rutte of the Netherlands was excoriated for calling Donald Trump “daddy” in reference to the American president’s “tough talk” on Europe, whether it be on member states’ per capita contributions to the defense pot, or Washington’s demands to “take” Greenland.

This was at a time of course when European leaders believed that appeasing Trump in such ingratiating terms, and in dulcet tones pitched to soothe rather than challenge, was the way to the man’s heart, if not soul. It certainly did not work.

So after Trump’s second attack on Iran in Feb. 28 and the resulting Iranian closure of the Hormuz Strait happened, some Europeans decided to change their tune. In addition to Rutte never again uttering the word “daddy,” the Spanish president Pedro Sanchez closed off the country’s bases to U.S. military access and condemned Trump’s war as a violation of international law. Germany’s Frederich Merz called the Iran War “humiliating” for the U.S. Italy has closed its bases, and UK and French leaders said the U.S. could only use their bases to defend UK and French assets, not to launch operations against Iran.

Meanwhile, Trump looked around and demanded NATO member states help him wrench control of the strait from Iran. Aside from pledging to meet and come up with ideas to secure the strait after the war, no one has complied. To say Trump is agitated and lashing out as a result is an understatement.

The situation has called into question the future of NATO, as the administration has suggested that the alliance is falling down on its Article 5 obligations, which is not true — a member was not attacked and NATO is not an offensive alliance designed to enter wars at members’ behest. Regardless, if the cohesion of NATO was shaky before, some are saying it’s on life support now.

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US war in Iran has cost $36.9 billion so far: Pentagon

The US’ war in Iran has cost US$29 billion (S$36.9 billion) so far, a senior Pentagon official said on May 12, an increase of US$4 billion from an estimate provided in late April.

With just six months before the mid-term elections, in which US President Donald Trump’s Republicans may face an uphill battle to keep their House majority, Democrats are riding high in public opinion polls as they attempt to link the war to cost-of-living issues.

On April 29, the Pentagon said the war at that point had cost US$25 billion.

Mr Jules Hurst, who is performing the duties of the comptroller, told lawmakers on May 12 that the new cost included updated repair and replacement of equipment and operational costs.

“The joint staff team and the comptroller team are constantly looking at that estimate,” he said.

He was speaking alongside Defence Secretary Pete Hegseth and the chairman of the Joint Chiefs of Staff, General Dan Caine.

It is unclear how the Pentagon arrived at the US$29 billion figure. A source told Reuters in March that the Trump administration estimated that the first six days of the war had cost at least US$11.3 billion. REUTERS

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