On 3 March, Bahrain's state news agency reported that security authorities had arrested 116 suspected members of an unidentified terrorist cell "formed and supported by" Iran's Islamic Revolution Guards Corps, seizing small-arms, materials for improvised explosive devices, as well as anti-personnel explosives, fragmentation bombs, and devices capable of damaging armoured vehicles.

• IHS Markit cannot independently verify Bahraini claims, nor the scale and nature of Iranian support for Bahraini militants. However, the suspected militants' possession of such an arsenal, if confirmed, would indicate an improvement in capability to inflict greater casualties and property damage.
• Iran's increasing public association with Shia militants diminishes its plausible deniability for future attacks claimed by affiliated groups, such as the Bahrain-based al-Ashtar Brigades. Coupled with Iranian recognition that sophisticated attacks on strategic assets would risk Saudi/US military retaliation, this suggests Bahrain would be used as a front against Saudi Arabia in the event of a broader Iran-Saudi/US regional escalation, rather than an indication of impending escalation in the currently low-level insurgency inside Bahrain.
• Such improvements in militant capability, if confirmed, would increase risk of more sophisticated attacks on state security forces, particularly those deployed near Shia villages, and less-secure state-owned commercial buildings, or government offices. Any attacks on well-secured energy assets or US military assets, if forthcoming, would likely require insider help to be successful.

The Bahrain News Agency report stated that 48 (of the 116 arrested) had received military training from the Islamic Revolution Guards Corps (IRGC) in Iran and its proxies Hizbullah in Lebanon and Asa'ib Ahl al-Haq in Iraq. The cell was said to have been planning to attack security forces and energy assets inside the kingdom, according to the report. Bahraini authorities regularly accuse Iran of supporting Shia militants conducting attacks in inside Bahrain, while Iranian officials regularly deny such allegations. Most recently, on 7 February, Bahraini officials stated that they had arrested four individuals for an explosion on an oil pipeline in November 2017, claiming that two of the detained had received military training in Iran. Iran has denied any connection to the explosion, while no Bahraini militant group has hitherto claimed responsibility for it.

Iran’s connection

IHS Markit cannot independently verify the Bahraini claims, nor the scale and nature of Iranian support for Bahraini militants. However, Iranian authorities regularly express support for the Bahraini Shia opposition. In June 2016, the powerful commander of the IRGC Quds Force, Qasem Soleimani, specifically threatened that Bahraini actions against the prominent Bahraini Shia cleric Sheikh Isa Qassim would cross a "red line" that could "set fire" to Bahrain. Bahrain revoked Isa Qassim's citizenship in June 2016, and he has since been under a de facto house-arrest.

In January 2018, the Bahraini Shia militant group, the al-Ashtar Brigades, pledged allegiance to Iran's Supreme Leader and re-branded its logo to resemble the IRGC and Hizbullah, announcing that it has an "integral role" in Iran's "resistance axis", referring to Iran's network of regional proxies seeking to undermine interests of the United States and its allies, including Bahrain and Saudi Arabia. In March 2017, the US State Department designated two individual 'affiliates' of the al-Ashtar Brigades as terrorists, claiming that one of the designees was Iran-based. The State Department also asserted that the al-Ashtar Brigades is funded and supported by Iran, but has so far abstained from designating the group as a foreign terrorist organisation. The group is designated as a terrorist organisation by Bahrain, Egypt, Saudi Arabia, the United Arab Emirates, and the United Kingdom.

The connection between Iran and Bahraini militants is increasingly becoming more visible, mainly driven by an escalation in Iran's media campaign against Bahrain. Iranian-state media frequently highlights what it describes as repression by the Bahraini government of it Shia population. In a rare event, on 23 February, Iran held a publicised funeral in the holy city of Qom for three Bahraini militants it claimed were shot by Bahraini authorities in mid-February in international waters while fleeing to Iran; Bahraini authorities have denied any involvement in their death. Other pro-Iran Arabic media reported that they had drowned. The funeral suggests that Iran is increasingly publicising its commitment to Bahraini Shia militants, likely intended to increase recruitment among Bahraini Shia, who are probably more receptive of adopting militancy against the Sunni al-Khalifa monarchy; the Bahraini government's crackdown on opposition groups, including secular political societies, has eliminated avenues for peaceful opposition and means of seeking state policy change.

Outlook and implications

Increasing publicisation of Iranian ties to Bahraini militants diminishes Iranian plausible deniability for any future attacks by Bahraini Shia militants using more sophisticated weaponry, such as high-grade explosives and anti-armour weapons. As such, the combination of Iran's escalating media campaign against Bahrain, including the al-Ashtar Brigades' public alignment with the IRGC, Iran's recognition that attacks on strategic Bahraini assets would risk US/Saudi retaliation, and the absence of use so far of anti-personnel/anti-armour weapons suggest that any improvement in Shia militant capabilities reflects Iranian intent to deter further Saudi regional escalation, rather than intent to escalate the currently low-level insurgency in Bahrain.

Iran is probably using this to serve as a warning to Saudi Arabia and the US that it would escalate in Bahrain in response to the US or Saudi Arabia escalating against Iran in the region. Any improvement in militant capability, if confirmed, still increases the risk of more sophisticated attacks on security targets, particularly those deployed near Shia villages, with the intent by militants to inflict greater casualties and property damage. This would likely be through unsanctioned use of components of this arsenal by militants who deviate from the command of the IRGC. Any attacks on well-secured energy assets, although unlikely outside the context of a broader Iran-Saudi/US military escalation, would likely require insider help to be successful, as was the case in the January 2017 Jaw prison break, where 10 prisoners were freed by unidentified armed militants. Nevertheless, attacks against pipelines, electricity substations, telecoms, and other infrastructure are increasingly likely.