Iran; What is Going on and Is There Hope for Diplomacy?
Secretive and insular since 1979, what is going on with the foreign policy of the Islamic Republic of Iran has always been a bit of a mystery. Today, Iran is no different. My goal in this piece is to demystify what is transpiring with the recent talks over Iran’s nuclear program and contextualize this news in light of current developments in the region.
Right now, the U.S. and Iran, two countries that have long hated each other, are conducting talks in Rome and Oman over the future of the Iranian nuclear program. The Trump Administration has threatened Iran with “…bombing the likes of which they have never seen before.” if Iran does not make a deal. The threat comes in the wake of the JCPOA, informally known as the Iran Nuclear Deal, expiring in October 2025. The Trump Administration has long since pulled out of the deal, with only the UK, France, and Germany, known collectively as the E3, remaining as the major parties. However, with Iran's uranium stockpiles inching closer to weapons-grade and hence the country being closer to a nuclear bomb than ever before, the pressure is on for the West to make a deal.
By all accounts, the talks seem to be going well with both sides remaining cautiously optimistic. However, publicly, the Iranians are vying for legitimacy whilst the Americans can't get their message straight. Iran wants to meet with the European parties to the JCPOA before it meets with the U.S. again to “keep options open”, assessing where the E3 stands on reinstating U.N. sanctions before October. From the Iranian perspective, they have a right to worry, the U.S. has a history of backing out of its commitment not to sanction Iran on a whim. Thus, trying to gauge whether the Europeans will do the same is simply Tehran hedging its bets. Europe has a response to this wishlist, and it wasn’t the one Iran was hoping for.
The French foreign minister, Jean-Noël Barrot, recently made it clear that if Europe’s security interests are not assured, the E3 will hit Iran with every single sanction that was lifted ten years ago when the JCPOA was passed. This puts the ball in Iran’s court, compelling them to make a deal with their American counterparts to get what Iran needs most, relief from sanctions and more foreign direct investment (FDI). Such investment, desperately needed in a country with rampant inflation, market volatility, and declining purchasing power, could come from the Gulf states
Iran is now appearing to be a more trustworthy actor by allowing Gulf states like Oman to mediate their current talks with the U.S., and hence could secure some foreign cash. However, for Iran, the real prize in the Gulf lies in normalizing ties with Saudi Arabia. The two nations are geo-politically and spiritually neck and neck and have been for years. Iran, which is majority Shia, and Saudi Arabia, which is majority Sunni, have been battling it out through proxy wars for decades, most notably in Yemen, where the Iranian-backed Houthis have long waged war against their Saudi neighbors. However, with Saudi Defense Minister Prince Khalid bin Salman paying a visit to Tehran this month, tensions could be poised to thaw.
Both countries need this. Iran's economy slid by 3.5% in 2024 because of sanctions, and if Saudi Arabia wants investment for their Vision 2030 plan, a grand-scale economic initiative, they can’t have Saudi warplanes bombing children in Yemen being the only news that’s coming out of Riyadh. Rapprochement would be huge, the IMF estimates it could spike regional GDP by up to 2%. Thus, these two prickly neighbors have an incentive to get their act together. All of this, including $50 billion in annual trade, hinges on the outcome of the current talks between Iran and the U.S. Iran might also get some relief from its Central Asian neighbors, as it recently held its 14th Joint Economic Committee meeting with Kyrgyzstan. Furthermore, Kazakhstan is slated to present an investment plan for the Bandar Abbas port, Iran's largest (more on this charming coastal villa later). Though highly unlikely, the cash injection Iran seeks could also come from a more unlikely source, according to Abbas Araghchi, the Iranian foreign minister.
Mr. Araghchi has poked American investment into the Iranian nuclear industry, stating that the country wants to build 19 reactors with contracts being “up for grabs” that could be a big boost to American firms. For context, there are currently 65 nuclear reactors in construction around the world, so adding 19 to the list is not insignificant. I mention this pipe dream because, yes, trying to bring the Americans in is risky. However, it is a move that might pay off if a deal to prevent Iran from getting the bomb is reached, and even if it doesn’t, it still makes an abrasive regime appear legitimate by looking like it wants to play nice. Deals are hard to make though when your opponent doesn’t know exactly what it is they want.
Steve Witkoff, Trump’s Special Envoy to the Middle East, said he would allow Iran to continue to enrich uranium to 3.67% as the JCPOA did, for context, the Iranians are enriching uranium to 60%, a short step away from reaching the 90% weapons-grade threshold. The next day, Witkoff backpedaled, saying that Iran would need to “stop and eliminate” any uranium enrichment. Not only is this worrisome because the Iranians would never concede to 0% enrichment, but at a baseline level, it’s bad diplomacy. If you’re going to do the sort of schizophrenic flip-flopping that the Trump Administration appears particularly adept at, you do it behind closed doors to throw off your opponent's ability to make their next move, not for the whole world to see. Choosing the latter tack makes you look confused, unqualified, and frankly weak, something the Iranians will be able to smell from a mile away. In talks where the future of the balance of power in the Middle East hangs in the balance, such blunders are inexcusable and unaffordable. This diplomatic pressure cooker, as if it needed any more heat, just got it in the form of an explosion at Iran's Bandar Abbas port, where at least 70 are confirmed dead and 1,000 are injured.
The port, Iran’s largest, is responsible for 70% of Iran's trade in goods and sits at a geopolitical artery, the Strait of Hormuz, where 20% of the world's oil passes through. This alone is not reason to suspect foul play, but the context around the explosion is. In recent months, two Chinese ships have docked at the port carrying sodium perchlorate, a key ingredient in the solid rocket fuel that Iranian ballistic missiles depend on. Furthermore, a senior Iranian official has pointed to Israeli involvement in the blast. This is not implausible; Israel did hit the port with a cyber attack in 2020. To add cause for concern, the U.S. Treasury released a statement on Tuesday stating that it was targeting six entities, five Chinese and one Iranian, and six Iranian individuals it claims were procuring sodium perchlorate and other missile propellants for the Iranian Revolutionary Guard Corps (IRGC).
It is not clear whether or not the blast was an act of war from Israel or even the U.S. What is clear is that we don’t yet know what caused massive damage to the largest port of one of our main adversaries at a time when we are trying to prevent them from acquiring the most catastrophic weapon known to man. Yes, a lot is at stake, but let us not lose hope. Diplomacy is an incredible thing, a powerful thing, it is that very thing that during the Cold War, when we stood on the brink of nuclear annihilation, looking down into an abyss in which humanity was no more, yanked us back by the collar and said: “no, not here, this is not where our story ends.” Thus, whilst some may choose cynicism and warmongering, I still believe in that intangible thing that saved us once and can sure as hell save us again.