Iran gains ground as the U.S. fumbles

Tehran has managed to check the deterioration of its strategic balance without offering any meaningful concession, while planting the notion that diplomacy is the path forward. As Iran enters the second round of negotiations with the U.S.—scheduled for this Saturday —it already enjoys temporary yet tangible advantages. President Trump ultimately halted an Israeli plan to strike Iran’s nuclear facilities in May—a move driven by Iran’s agreement to enter negotiations with the U.S., according to a report by The New York Times. At the same time, top Iranian officials seem increasingly confident that the threat of military confrontation is weakening—despite ongoing U.S. troop deployments in the region meant to project resolve. 

On the economic front, Tehran is also seeing gains. The Iranian stock exchange has shown upward momentum, and the rial has appreciated notably, with the exchange rate dropping below one million tomans per dollar. Another advantage for Tehran was highlighted by the Saudi defense minister’s recent visit to Tehran. This reflects the state of affairs in Riyadh in the absence of a clear and resolute U.S. policy to deter Iran.   

 Thus, despite persistent gaps in the negotiations, Tehran has succeeded in halting the negative momentum against it in both Israel and the U.S. It has also slowed the deterioration of its strategic balance, without offering any meaningful concession. Alongside these developments, Tehran has also managed to plant the notion within circles in the U.S. and Israel that diplomacy, despite its flaws, is preferable to the risks of military escalation. Perhaps most troubling, this evolving consensus risks becoming a trap. By clinging to diplomacy alone, Washington may forfeit a rare moment of leverage—one that could have compelled more substantial Iranian compromises. The diplomatic track may thus incur a historic cost: a missed opportunity to confront the Iranian threat—in all its dimensions—in a meaningful and comprehensive manner, after over two decades of Western hesitation.  (Read More)