Despite all the provocative rhetoric from Iranian officials, Iran has suffered more harm than it has since Iraq’s brutal invasion of 1980. The invasion lasted eight years, killing hundreds of thousands of Iranians, but nothing changed politically or on the ground. Its economy has shrunk by ten percent since the war began. Its oil exports fell by more than 80 percent. Its currency, the rial, which was worth about 600,000 rials to the dollar a year ago, has plummeted. One dollar is now worth 2.3 million rials. Inflation hit almost 85 percent last month. Power outages are common. New U.S. sanctions on all major Iranian airlines have just come into effect. Tehran’s influence today is not its control of the world’s third-largest oil reserves but control of access to the Strait of Hormuz. About 20 percent of the world’s energy is transported through this waterway, including most of the oil and gas products of neighboring Gulf countries.
The Iranian government has been forced to implement sweeping cost-cutting measures, and Pezeshkian’s brief visit reflected this. For decades, Iran’s president has been booking three and four floors in luxury hotels, with prices in the stratosphere during the Christmas period. he. This time, he stayed at the Iranian ambassador’s townhouse. His meeting was held in a small conference room. There were no ballrooms with crystal chandeliers or elaborate floral arrangements on curtained tables. The U.S. State Department banned Iranian diplomats from “purchasing wholesale club memberships or luxury goods,” warning in a tweet, “New York area retailers: Be vigilant and do not become complicit in these violations.” The trip didn’t appear to stand a chance.
“Iran wants a deal because its economy is struggling under tough U.S. sanctions,” Robert Malley told me. He was the chief negotiator on the 2015 nuclear deal under President Barack Obama, and he also attended the briefing in New York between Pezeshkian and Araghchi. But the two sides have learned different lessons from past negotiations. In his view, Iran believes that the first ceasefire is “good in principle,” but given the unreliability of the United States, Iran should make concessions in advance in any future agreement, such as economic relief, before agreeing to reopen the strait. “The problem is that the Trump administration has learned a very different lesson,” he said. It considered the first deal “inherently flawed” and concluded: “Iran should first be strangled economically to force concessions. Unfortunately, with such diametrically opposed assessments, it is difficult to imagine a deal being reached anytime soon.”
But the United States has also been hit hard. The Pentagon reported to Congress in early September that the war had cost about $44 billion so far. Outside estimates put the cost at well over $100 billion. The average price of a gallon of gasoline is about $4.50, and the average price of diesel is $6.50. Former CIA director and Army Gen. David Petraeus told Crypto Briefing last month that some key U.S. bases in the Middle East are no longer viable because Iran has effectively targeted them. These include Al Udeid Air Base in Qatar, which serves as the forward headquarters for U.S. Central Command operations in countries including Iran, Iraq and Afghanistan. The conservative Hudson Institute reported this month that the United States has had some success in destroying Iranian missiles and their launchers, but “Tehran’s fragmented drone ecosystem can regenerate more quickly.” The nature of war in the Middle East is changing faster than the United States can respond.
There are many obstacles to this or any future negotiations. Pezeshkian faces criticism from hardliners who oppose any diplomacy. KaihanThe New York Times, an ultraconservative newspaper associated with the supreme leader’s office, said that “New York is not a place for smiles and negotiations.” An editorial warned that “it is important to note that no signals were sent during the trip to New York that could be interpreted by enemies as weakness on the part of Iran.” Instead, it called on the United Nations General Assembly to become “a court of law for American crimes.” The Fars news agency, which is linked to the Revolutionary Guards, said Pezeshkian should not have gone to New York at all. Being president of Iran is a dangerous job. Since the 1979 revolution, all those who have held this office have faced dark fates, from impeachment and political isolation to travel bans and house arrest. Some people can’t even give interviews to the media or make public appearances.