A number of false assumptions have continued to cloud the coverage of the ongoing re-negotiation between the U.S. and Iran of a new iteration of the Joint Comprehensive Plan of Action (JCPOA) – ‘nuclear deal’ – from which Washington unilaterally withdrew in May 2018. The most pertinent one – particularly after the election of new president Ebrahim Raisi in Iran on 18 June – is the false premise that politicians in Iran can be characterised as ‘moderate’ or ‘hardline’. “It is not possible to be a serious politician in Iran unless you absolutely believe in the core principles of those who founded the Islamic Republic,” a senior source close to Iran’s administration exclusively told OilPrice.com. “At the centre of these guiding principles is the concept of Velayat-e-Faqih, which means that all serious political and religious authority is entrusted to the Shia clergy, which makes all key decisions for Iran, provided that they have been approved by the foremost religious leader - the Supreme Leader himself [currently Ali Khamenei] – and this is then enforced by the guardians of the  Revolution, the Islamic Revolutionary Guards Corps [IRGC],” he said. “In practical terms, these decisions will cover everything of significance for Iran, from foreign policy, through defence policy, economic policy, and intelligence policy, to any domestic policy except the most trivial,” he added. “In short, there is no such thing as a moderate or hardline Iranian politician – they are all what would be termed in the West ‘hardline’ – but this differentiation that began in the West has been used as a negotiating ploy in Iran ever since to get what Tehran wants simply by saying: ‘If you don’t agree with this we will not be able to control our hardliners,’” he underlined.
Given this, it is completely irrelevant who particularly occupies the post of president of Iran, and Raisi – widely portrayed with the ‘hardliner’ moniker – is no different. Not only does all true decision making begin and end with Supreme Leader Khamenei but there are further structures in place to ensure that this remains the case and that whoever is president can do nothing to change this. Although Iran’s 290-member parliament (the ‘Majlis’) is an elected house its power is confined to determining non-essential matters but its decisions even on these can be overturned as all of the legislation passed by it then needs to be approved by the Guardian Council of the Constitution (the Guardian Council). This 12-member body acts in the manner of a general constitutional overseer, with half of its membership always being Shia theologians directly chosen by the Supreme Leader himself. The other six members are lawyers selected by the head of the judiciary, who is, in turn, also directly appointed by the Supreme Leader. In practical terms, then, Iran’s parliament has tended to deal with very small-scale domestic issues only and even these, if they relate in any way to economic or state security matters, are taken out of its hands.
This fact, though, perversely augurs well for the prospects of a new nuclear deal as the only thing that counts is what the Supreme Leader thinks, and what the Supreme Leader thinks right now is that Iran needs some economic breathing space that would come from a new JCPOA, according to the Iran source. “The key economic problem facing Iran is that its foreign currency reserves now stand at around US$10 billion only [compared to about US$114 billion just before the U.S. withdrew from the JCPOA in May 2018], and its gold reserves are also now insignificant,” he said. “This means that the Guards [the IRGC] are facing a crunch point when it comes to funding its international network of proxies used to project Iranian influence, including in the key operational theatres right now of Yemen, Lebanon, and Syria as these people want payment in either [U.S.] dollars or gold,” he added. This declining foreign currency reserves trend is set to continue, leaving Iran with zero such reserves within three months, as currently the rate of foreign currency-denominated capital flight out of Iran – and into Turkey, Dubai, Malaysia, and Spain, in particular – is running at around US$4-4.5 billion per month, according to the Iran source. “There is no lifeline coming quickly from China either because, despite the big deals signed since 2019, it [China] is being very careful not to provoke the U.S. on the Iran issue by engaging in overt acts that the U.S. cannot ignore, such as sending funds to Iran that will be used to finance what the U.S. sees as terrorism,” he told OilPrice.com. There is a precedent for such a degree of economic hardship leading to a reversal of major policy in Iran: back in 2013/2014, after the European Union had joined the U.S. in ramping up sanctions against Iran and the foreign currency reserves figure dropped by 50 percent in one year, Iran caved in to the demands to negotiate down the level of uranium enrichment that would be put in the final JCPOA document to the level that was finally agreed of 3.67 percent.
From the U.S.’s perspective, the key sticking point in the JCPOA that was signed in 2015 was that the tough clauses in the original JCPOA document draft of 2014 that related to Iran’s ballistic missiles program were taken out by then-President Barack Obama’s team due to pressure from fellow JCPOA signatories, France and Germany. These original clauses were especially designed to guard against Iran’s development of longer-range missiles that could hit either Europe or the U.S. directly. Specifically, the first clause was that Iran ‘should recognize and accept the inextricable link between its nuclear enrichment program and its ballistic missile program’ and the second was that Iran ‘must end its proliferation of ballistic missiles and halt further launching or development of nuclear-capable missile systems’. It was the desire to have these clauses re-included in a new amendment to the JCPOA by former U.S. President Donald Trump’s foreign policy team that prompted Iran’s refusal to do so and the U.S. withdrawal from the existing JCPOA in May 2018.
Now, though, given the growing economic pressure facing Iran – including very recent nationwide power outages and rising food shortages across the country – it appears that Iran may be finally ready to accept these tough clauses on its ballistic missile program. The signal that this is the case is the creation of a false conflict narrative that came from Iran last week, with the Iranian Parliament Speaker’s Special Aide for the International Affairs, Hossein Amir-Abdollahian, stating that U.S. President Joe Biden “should not include regional or missile issues in the JCPOA.” The key to this comment, the Iran source told OilPrice.com last week, is that it conflates two separate issues – missiles in general and regional missiles – and the Iranians know very well that the U.S. does not care about Iran having some of the shorter-range ballistic missiles that it has. “The U.S. thinks that the threat of an Iran having very short-range missiles will keep the Saudis more dependent on the U.S. for protection than it would be otherwise and will also continue to generate hundreds of billions of dollars of defence contracts for Washington,” said the Iran source. “Therefore, this statement on regional and missile issues is designed by Iran to be able to claim to its people that the U.S. gave in on Iran keeping its regional missile program, although in reality the U.S. never cared about it, provided that there is no threat to Israel,” he added. “This would remove the final major block to the re-engagement of the U.S. with a new version of the JCPOA, as Washington has already tentatively agreed to the removal of key sanctions in the oil, gas, petrochemicals and automotive sectors, plus some of those on Iran’s banking sector, provided that clauses relating to Iran’s medium- and long-range ballistic missile program are included in it,” he concluded.
By Simon Watkins for Oilprice.com
More Top Reads From Oilprice.com:
- Can The Middle East Survive Without Oil?
- Solar Has An Unlikely New Enemy
- Qatar: Peak Natural Gas Demand To Occur Around 2040