Navigating Sanctions, Diplomacy, Regional Tensions

Domestic and international pressures seem to be mounting on Iran, pushing the authorities to signal a readiness for flexibility in negotiations with the U.S. regarding the lifting of sanctions. This potential shift, albeit less pronounced than in 2013, may be driven by economic strains, growing advocacy for de-escalation from reformist and moderate voices, and increasing negative attitudes towards Iran-supported resistance forces.

Signals for Negotiations and Nuclear Cooperation

Recent statements from the foreign ministry about the Ra’isi administration’s ongoing commitment to JCPoA negotiations, the lifting of sanctions, and the continuation of a peaceful nuclear program within its international rights and obligations indicate new signals. Furthermore, Economy Minister Ehsan Khanduzi has sought to reassure critics, including economists and business leaders, that the administration still sees the pursuit of negotiations for sanctions removal as beneficial. Some have also interpreted comments by former foreign minister Ali-Akbar Salehi on Iran’s nuclear weapons production capabilities as an attempt to reignite negotiations. At the same time, reformist and moderate observers are sounding the alarm on the dire consequences of ongoing sanctions, with some suggesting that Iran’s policymakers have recognized that the status quo is unsustainable, thus the need for moderated expectations and a softer diplomatic stance. The backdrop of social discontent and economic grievances, along with regional and international challenges, is increasingly seen as pressing threats that intellectuals urge the authorities to take seriously. The arrival of the Persian New Year on 21 March is likely to highlight the stark challenges of budget deficits. A recent adjustment in the timing of cash subsidy disbursements underscores the economic pressures facing the administration, suggesting that subsidy payments may be dependent on fluctuating government revenues. The looming gasoline shortage post-New Year, alongside deliberate avoidance of price increases to prevent protests, adds to the administration’s challenges. Furthermore, concerns about intensified oil sanctions, especially with the prospect of a Republican president in the White House after November 2024, compound Iran’s economic and political predicaments.

Acting to Ease Regional Tensions?

In what appears to be a response to foreign reports on IRGC-QF Commander Esma’il Qa’ani’s rumored visit to Iraq and his alleged efforts to urge militias to halt attacks, the ministry of foreign affairs has reiterated its position on the autonomy of resistance groups. Although spokesperson Naser Kan’ani neither confirmed nor denied Qa’ani’s reported activities in Iraq, the recent visit of Ali-Akbar Ahmadian-Babaki, the secretary of the Supreme National Security Council, to Iraq is notable, especially following U.S. strikes on resistance forces in that country and Syria. Conservative media outlets have emphasized Iran’s recognition of Iraqi stability as crucial, highlighting significant initiatives such as the Tehran-Baghdad security pact, the Shalamcheh-Basra railroad, and currency issues, in which the current Iraqi Prime Minister Mohammad Shia’ al-Sudani has cooperated with Tehran. There is an emerging understanding that al-Sudani’s potential resignation might escalate anti-Iran sentiments within Iraq. Additionally, Western and Arab media have increasingly cast Iraqi resistance forces in a negative light, potentially shifting Iraqi public opinion against Hashd al-Sha’bi and similar groups. Some conservative media early on interpreted the reports of Qa’ani’s visit as strategic moves to lessen pressure on the Biden administration and to sow discord within the resistance, a narrative seemingly crafted for a domestic audience in Iran. Iran is increasingly seeking recognition as a player in regional issues, although this effort is becoming more challenging due to its weakened economic position and diminished image as a peacemaker since the JCPoA years. The exclusion of Iran and Russia from the Munich Security Conference, particularly in favor of inviting Iranian dissidents, sparked frustration. Conservative analysts argue that Iran, along with representatives from resistance forces, deserved a place at the table in discussions about the ongoing Gaza crisis. Amidst growing debates on the formal recognition of Palestine as an independent state, reformist analysts are urging Iranian policymakers to reassess their stance on the Palestine-Israel issue. They caution that persistent opposition to a two-state solution could alienate Iran from Islamic and Arab nations in the region, as well as from Palestinian factions themselves. This isolation, while not an immediate threat, undermines Iran’s future prospects. Nonetheless, hardliners remain cautious about the potential disarmament of resistance forces in Gaza, particularly groups like Hamas and Islamic Jihad, and the normalization of Arab-Israeli relations.


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