Karim Sadjadpour, thank you so much for being here.
Thank you. It's my pleasure, Arwa.
Let me introduce you to our audience since this is the first time you're joining us. You are a senior fellow at the Carnegie Endowment, a contributing writer at The Atlantic, a professor at Georgetown, and somehow whenever I turn on cable, you're always there. So we appreciate you joining us today.
It's my great pleasure. Thank you for inviting me.
Of course. Well, let's dive right in. Trump announced on Sunday that the US and Iran had reached some form of consensus by way of a memorandum of understanding electronically signed. Formal signing set to be on Friday. Can you give us just a little bit about what we know so far about this MOU?
So, I call it a memorandum of misunderstanding in that I think that the two sides have seemed to have very different takeaways about what this deal means. For the Trump administration, they believe it means that Iran is going to restore the Strait of Hormuz as an international waterway as it was before the war. It's committed to major nuclear concessions, and it may, it's even, you know, contemplating rethinking its long-time revolutionary ideology, especially its hostility toward America and Israel and its support for regional proxies and its missile program. So, from the US vantage point and the public statements of people like Vice President Pence and in Trump's public statements, they believe this is a great deal. And for President Trump, what's important to say is that it's much stronger than Obama's 2015 nuclear deal.
Now, when you listen to the statements from Iranian officials, it's a totally different deal. They talk about the fact that the Strait of Hormuz is going to remain under Iranian administrative control. They don't plan to make any meaningful nuclear concessions. In fact, there was an Axios report that came out yesterday that the CIA believes that in their internal deliberations, the Iranians are not prepared to make any nuclear concessions. And then on the other points of contention between America and Iran, namely Iran's hostility toward Israel, its support for regional proxies, and its missile program, that those are not even discussions on the table. So, I don't know how the positions so far apart are going to be reconciled, nor frankly am I confident that what is going to then move to be phase two of this agreement can be resolved in the allotted time frame, which is 60 days.
If Trump and his team is thinking that they're going to get a generational deal, and Iran is thinking that they're going to get sanctions relief for minimal concessions, looking at those two opposing realities, what side do you think is closer to the truth in what you see happening?
So, I think there's a kind of a lost in translation negotiation, both literally and figuratively, in that the two parties are communicating, not entirely but mostly through intermediaries. There hasn't been US-Iran relationship since 1979, and so with the help of intermediaries, the Pakistanis, the Qataris, and others, that's one way in which these negotiations have been done, and you can see why things may get lost in translation, because for countries like Pakistan and Qatar, they are desperate to get a deal between the United States and Iran, and to get the mutual blockade of the Strait of Hormuz lifted, because they're suffering greatly as a result of this blockade. So, you can see how the intermediaries basically are trying to paper over the differences and say, 'Look, hey, just agree. Just lift this blockade, and then we can hash out the difficult issues.' So, that's one I think lost in translation moment.
The other is that I think what many people, including frankly myself, perhaps didn't fully understand until the last couple days is that I think what President Trump and his team are actually going for is something very ambitious, which is not just a narrow nuclear deal with Iran like Obama got in 2015, but really a grand bargain between America and Iran that would transform the US-Iran relationship along the lines of Nixon to China in the 1970s.
And so, that I think is the reason why we haven't yet seen the memorandum of understanding, and the memorandum of understanding is thought to be very short, perhaps just two, three pages, whereas Obama's nuclear deal was a 159-page document that was deeply technical. And so, I have to say, Raphael, I'm very skeptical, extremely skeptical, that we're on the verge of a grand bargain between the United States and Iran, and that this is a regime which since 1979, its entire identity has been premised on revolutionary ideology, hostility toward, resistance against America in their own parlance, the rejection of Israel's existence, and they just fought a brutal three-and-a-half-month war in which they believed they emerged victorious, and they believed their revolutionary ideology was that which kept them afloat, which saved the regime, and it maintains that the ideology is the glue that maintains the cohesion of the security forces. So, I'm very skeptical that inducements from the United States and promises of sanction relief and foreign investment are going to persuade Iran's revolutionaries to throw out revolutionary ideology because what's most important for a revolutionary regime like the Islamic Republic of Iran is not the prosperity and security of its population. It's its own survival. And you know, I think they've long believed that if they open up to the world, that's not going to prolong their shelf life as a regime. That's likely going to hasten their demise. And obviously, their obsession is the Soviet Union and Gorbachev's attempts to reform the Soviet Union, which they believe, you know, hastened its collapse.
One point of confusion I have is that a grand bargain would require the US to have a bit of leverage. And right now, I mean, J.D. Vance is doing a bit of a media blitz trying to make this case. He says, you know, Iran is losing its leverage over the Strait of Hormuz because military vessels are escorting, you know, commercial ships, and that more traffic is coming through with military protection. He cites tactical military gains. On the other hand, people are looking at this and saying, 'No, no, no. The US is not in a position of leverage because their back is in a corner cuz oil prices are up and midterms are on the horizon.' And I'm curious how you understand these two competing narratives.
So, the Iranian regime is in bad shape internally and that it was already obviously a deeply unpopular regime. I estimate they probably have 20% popular support max. And we saw nationwide uprisings in Iran last January as a result of the currency collapse. And the currency has collapsed perhaps another 50% since those January protests. As a result of this naval blockade, it's losing around $450 million daily. So, no doubt this is a regime which is not in great shape and it can, it has sustained this naval blockade for a while, but it can't do so indefinitely. So, on one hand they are keen to at least get to phase one of this deal which is the ending of the mutual blockade of the Strait of Hormuz.
That said, the advantage that all dictatorships have when they fight democracies is they don't care about public opinion the same way that public opinion matters in democratic systems. And we know that for President Trump this war has not been popular. And the more it persists the less popular it is. He wants oil and gas prices in check before the summer holiday season. And so I think it's certainly the case that this regime in Iran is, you know, when it comes to its power, its military power, it's dwarfed by that of the United States. But I think it's also the case that Iran has more leverage now than they did before the war began. Specifically because they took the Strait of Hormuz and the global economy hostage and, you know, the other point here Rafael is that, you know, what this war has also exhibited is how instability is cheap. You know, stability is very expensive. You won't see it. It's the billions of dollars and powerful militaries and navies and military hardware and armies. Instability is really cheap.
With $20,000 drones, you can intimidate hundred-million-dollar tankers filled with hundreds of millions of dollars of oil. And as I said, sabotage is global economy. With $20,000 drones and cheap missiles, you can bring to a standstill one of the busiest international airports in the world, Dubai International Airport. And so, that's, you know, unfortunately, there's this asymmetry in which it's what I call the vulture's advantage. You know, the countries in the Persian Gulf bordering Iran, whether that's the UAE, Qatar, Saudi Arabia, they all aspire to be falcons, to build soaring societies, economies, cities. And the Islamic Republic of Iran has that vulture's advantage in that, you know, they're incapable of transforming themselves into a world-class global economy, but they can sabotage the ambitions of others.
Mhm. Another argument that keeps getting floated by J.D. Vance and others is the 12-day war in 2025. And also, the most recent war starting February 28th and Trump's maximum pressure campaign have created an atmosphere that will make this next 60 days of negotiation easier because they're saying, you know, we've made the situation more difficult on Iran, and therefore, they'll be more interested in negotiating. On the other side of the coin, you know, people say, 'None of that is true. If anything, it'll make them more embittered and more bad faith in all of this.' And I'm curious how you respond to that line of logic.
Well, I think that certainly the mistrust between America and Iran was already a 10 out of 10 before this war began. Now, it's a 15 out of 10. I mean, the United States has, on two occasions in the middle of negotiations, the Trump administration attacked Iran. And so, I think that the Iranian regime must fear that this deal could all be a ruse and it could just be President Trump wanting to buy time to bring oil prices down in order to attack them again. That's certainly one strong view in Tehran.
And it's true that the 12-day war, it did significant damage to Iran's nuclear facilities, but again the greatest source of leverage Iran has now discovered is not uranium enrichment, it's Hormuz enrichment. And I think that for them the Strait of Hormuz is something which they want to use as both a fixed revenue stream applying either tolls or administrative fees, but also a source of deterrents to send the signal to America and Israel that if we're attacked again we can close down the strait. You know, we did it once and it's easy for us to do again.
Do you think it's totally just wishful thinking when the US says that the Strait of Hormuz will go back to a status quo? Pandora's Box is open and I mean, some might argue we're never going back to that. I'm curious what you think of that.
Marco Rubio made a very good point which I think should be made more clearly and consistently by the Trump administration, which is that virtually no country in the world wants Iran to control the Strait of Hormuz. You know, a majority of the energy that gets out of that strait is bound for Asia, China in particular. You know, if I'm the United States, I want to internationalize this challenge and to enlist the support of whether it's our allies in Europe, obviously our Gulf allies, but also countries with whom we're competitors which need the strait to be an open international waterway like China to come in very forcefully and say listen, this needs to go back to status quo. And the other country which is important here is Oman because on the other side of the Strait of Hormuz it's Oman.
And Iran really can't come up with a scheme to either charge tolling fees or administrative fees in the Strait if Oman is not on board with that. And so bringing Oman back into the Arab Gulf fold rather than the Iranian fold should be an imperative for both United States and for GCC countries.
