Is the United States trying to change the behavior of the Islamic Republic of Iran, or is it pursuing a regime-change policy? The factionalized leadership in Tehran has wrestled with this question since the revolution of 1979 and establishment of the Islamic Republic, but several recent developments are making the question all the more pressing: U.S. attempt at extricating itself from the Middle East, Iran successfully filling the void left behind by the U.S., President Donald J. Trump’s “maximum pressure campaign” causing social unrest in Iran, and the Islamic Republic raising the cost of the U.S. campaign by retaliating against U.S. allies in the Persian Gulf region, all deteriorate an already tense situation in the Middle East region. However, there also appears to be a desire in Tehran, as well as in Washington, to show flexibility and reach a negotiated solution to the crisis and avoid a military confrontation. But for now, military confrontation and negotiations are equally likely.

The roots of the current crisis can be traced back to U.S. invasions of Afghanistan in 2001 and Iraq in 2003. Until that time, the Islamic Republic was surrounded by hostile regimes and with the exception of Lebanon, and it had difficulties projecting power or influence beyond the borders of Iran. That all changed as the superior U.S. military swiftly defeated and dismantled the Taliban and Ba’ath regimes, but faced greater challenges establishing a new political order to replace the old regimes. Once the war weary U.S. under President Barack H. Obama, began disentangling itself from the Middle East region, regional powers, including Iran, began their attempts at filling the void.

Simultaneous with its military disentanglement from the Middle East region, the Obama administration, through severe economic sanctions, persuaded the Islamic Republic to abandon the military dimensions of its nuclear program and commit to the the Joint Comprehensive Plan of Action (JCPOA) in October 2015.[1] According to the supporters of the Obama administration’s nuclear diplomacy with Iran, the JCPOA served the purpose of defusing a crisis, which would have forced the U.S. once again to militarily engage in the Middle East. Opponents of the nuclear deal on the other hand, accused the Obama administration of postponing what they perceived as an inevitable crisis and even war with Iran and not a solution to the crisis over Iran’s nuclear program.

Regardless of the viewpoints, Obama was fortunate enough to have a competent and cooperative counterpart in Tehran: President Hassan Rouhani and his technocratic government, which desired to reach a negotiated solution to the crisis over Iran’s controversial nuclear program. Such a solution was seen as not only helping Rouhani deliver his election promise[2] of removing the international sanctions regime and improving economic conditions for Iranians, but also solving the crisis in relations with the United States, which over the years has facilitated gradual rise of the Islamic Revolutionary Guard Corps (IRGC) and militarization of the Islamic Republic.

Rouhani raised the prospects for a nuclear deal with the United States at Iran’s Supreme National Security Council (SNSC). Using the external pressure from U.S. sanctions and the very real risk of economic collapse in Iran, Rouhani persuaded Supreme Leader Ayatollah Ali Khamenei, and representatives of the IRGC, to engage in negotiations with the Obama administration. Khamenei accepted in a show of what he called “heroic flexibility.”[3] Khamenei had borrowed the term from wrestling, where wrestlers at times show tactical flexibility when facing a formidable opponent. Rouhani, who himself had seen how other presidents, in particular Mohammad Khatami, had earlier been accused of treason and of selling out of Iran’s national interests in nuclear negotiations, insisted to have Khamenei’s public support to the nuclear talks. And Khamenei publicly supported Rouhani, and the nuclear negotiators,[4] and once the nuclear deal was achieved, Khamenei, again pressured by Rouhani, publicly endorsed the JCPOA.[5]

Remarkably, Rouhani even managed to persuade the IRGC not to veto the negotiations and the resulting nuclear deal in the Supreme National Security Council. As the main driver behind Iran’s nuclear program, the IRGC would have emerged as the custodian of an Iranian nuclear bomb had the country continued its quest for the bomb. However, in recognition of Iran’s acute economic problems, and expecting to benefit from the opening of Iran’s economy to foreign direct investments, the IRGC did not actively oppose the nuclear negotiations or the outcome. Although, the IRGC also did not publicly endorse the JCPOA.

Just as remarkably, the Islamic Republic remained committed to the nuclear deal. According to the International Atomic Energy Agency (IAEA)[6] the Islamic Republic honored its obligations under the JCPOA, and as late as in January 2019, the U.S. intelligence community did not cite any example of Iranian non-compliance with the JCPOA in its Worldwide Threat Assessment.[7]

But the Islamic Republic did not abandon its regional aspirations along with its nuclear ambitions and did not hesitate to take advantage of the U.S. military withdrawal from the Middle East. Among the regional powers, Iran had already a competitive advantage, largely due to its decades long and systematic effort to establish and nurture non-Iranian proxies.[8] Through these proxies the Islamic Republic projects power and exerts political influence from western Afghanistan in the east to Iraq, Syria and Lebanon in the west and as far as Yemen in the south. The JCPOA and removal of the sanctions regime provided the Islamic Republic with greater economic means to finance its proxies.

At least at the declaratory level, Obama’s successor in office, Trump has pursued and still pursues the policy of disentangling the United States from the Middle East. But in the course of his campaign, Trump ceaselessly attacked the JCPOA, which runs contrary to the fundamental agenda of extricating the U.S. from the problems of the Middle East. After all, had Trump accepted the JCPOA, he could easier have left U.S. allies in the Middle East to their own devices, but by ceaselessly criticizing the JCPOA, he further committed himself to engagement in the Middle East.

Trump’s opposition to the JCPOA may have been motivated by his animosity towards Obama and domestic political calculations,[9] in particular pressure groups within the United States and key U.S. allies in the Middle East, who were feared the prospect of normalization of relations between the U.S. and Iran. Regardless of Trump’s personal motives, once in office, his administration was alarmed by Iran’s regional expansion and blamed the JCPOA for providing the Islamic Republic with the economic means to finance its regional expansionism.

Based on these factors, on May 8, 2018, Trump withdrew the U.S. from the JCPOA, with the expressed goal of making a “new and lasting deal” that eliminates “the threat of Iran’s ballistic missile program; … its terrorist activities worldwide; and … its menacing activity across the Middle East.”[10] Trump also re-imposed pre-JCPOA sanctions against the Islamic Republic in November 2018,[11] but granted waivers to wind down purchases of Iranian crude oil.[12] Those waivers too were later removed, and by April 22, 2019, the U.S. imposed new sanctions to bring down Iran’s oil exports to zero as part of its so-called “maximum pressure” campaign.[13]

For a long time, Islamic Republic authorities dismissed the sanctions as ineffective, but by November 2019, Rouhani, admitted that the sanctions were indeed crippling Iran’s economy. Addressing the crowds in Kerman province on November 12, 2019 Rouhani said: “We all know too well that we are not in normal and easy circumstances. The conditions are very complicated… Even since the beginning of the revolution until today, we have never faced so many difficulties in moving an oil tanker from our ports and harbors to the world.”[14] Turning to the state of Iran’s finances, Rouhani explained the annual budget of the country is around $39 billion, $14 billion of which is secured through taxes and other government revenue. The remaining $25 billion has traditionally been covered by the revenue from exports, which are now severely limited because of U.S. sanctions against Iran’s oil and gas sector.

The exact amount of Iran’s oil exports is not known, but in mid-October 2019, exports had reportedly fallen to less than 400,000 barrels per day[15] from 2.5 million barrels per day after the signing of the Iran nuclear deal and lifting of sanctions in 2016. Other sources claim oil exports have fallen to less than 200,000 barrels per day.[16] Iran is also suspected of selling its oil bellow the world market price and is nowhere near covering the $25 billion gap to balance its budget.

The Trump administration, however, did and does not appear to have a clearly stated strategic objective with its withdrawal from the JCPOA, the “maximum pressure” campaign and crippling of Iran’s economy: Is the United States trying to change the behavior of the Islamic Republic, or is it pursuing a regime-change policy in Iran?

The answer depends on the U.S. government official answering the question. In his public statements, Trump himself vacillates between radically different positions, and those positions appears to depend on the last person who has briefed him. In other words, contradictory statements of the U.S. president reflect opposing views on Iran within the administration and a struggle for control over Iran policy.

While Trump himself does not appear to harbor ideological animosity against the Islamic Republic and has at times declared he was ready to meet his Iranian counterpart without any preconditions (and at other times contradicted himself and declined he has ever declared such readiness), Mike Pompeo, U.S. Secretary of State, and Ambassador John Bolton, who previously served as national security adviser to the president, have advocated a hardline approach towards the Islamic Republic.

On May 21, 2018, Pompeo, delivering his first major policy speech at The Heritage Foundation,[17] seemed to be gravitating towards changing the behavior of the regime and made 12 demands:

•“[Iran must D]eclare… prior military dimensions of its nuclear program…”
•“[Stop] enrichment [of uranium]…”
•“[P]rovide the IAEA with unqualified access to all sites…”
•“[M]ust end its proliferation of ballistic missiles…”
•“[M”ust release all U.S. citizens, as well as citizens of our partners and allies,…”
•“[M]ust end support to… terrorist groups…”
•“[M]ust permit… the disarming… of [Iraqi] Shia militias…”
•“[M]ust… end its military support for the Houthi militia…”
•“[M’ust withdraw… [its forces from] Syria…”
•“[M]ust end support for the Taliban…”
•“[M]ust end the IRGC Qods Force’s support for terrorists…”
•“[M]ust end its threatening behavior against its neighbors…”

However, in the ensuing question and answer session at The Heritage Foundation event, Pompeo was leaning towards regime change policy when he said: “At the end of the day the Iranian people will get to make a choice about their leadership. If they make the decision quickly, that would be wonderful. If they choose not to do so, we will stay hard at this until we achieve the outcomes that I set forward today.”

On July 22, 2018, Secretary Pompeo addressing an assembly of Iranian/Americans at the Ronald Reagan Presidential Foundation and Library, Pompeo once again appeared to be calling for overthrow of the regime: “[We call] on all governments to end their flirtations with a revolutionary regime and come quickly to the aid of the Iranian people.”[18]

On the very same day, July 22, 2018, Trump, reacting to Iranian president Hassan Rouhani’s threats to stop the flow of oil to the world market through the Strait of Hormuz, tweeted something which could mean support to Pompeo’s approach: “NEVER EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE” the American president tweeted in capital letters.[19]

Reversing course on July 24, 2018, Trump said: “We’ll see what happens but we’re ready to make a real deal, not the deal that was done by the previous administration, which was a disaster.”[20] But on July 31, 2018, walked back the threats by insisting he had no preconditions for meeting his Iranian counterpart and concluded: “If they [Iran] want to meet, we’ll meet… I’d meet with anybody. I believe in meetings,… ”[21] But within a few hours, Pompeo corrected the president by insisting there were indeed preconditions for a top level summit: “If the Iranians demonstrate a commitment to make fundamental changes in how they treat their own people, reduce their malign behavior, can agree that it’s worthwhile to enter into a nuclear agreement that actually prevents proliferation, then the president said he’s prepared to sit down and have the conversation with them,” Pompeo said on CNBC’s “Closing Bell”.[22]

As the Islamic Republic was preparing its response to the U.S. “Maximum pressure campaign,” on September 25, 2018, Bolton warned Tehran: “If you cross us, our allies, or our partners; if you harm our citizens… there will be hell to pay.”[23]

The Islamic Republic is no stranger to political rivalry and factionalism, yet it had great difficulties interpreting and countering U.S. withdrawal from it and the “maximum pressure” campaign and the confusing signals from Washington. Three dominant factions among the ruling elites of the Islamic Republic, which in the first place had agreed to the JCPOA, once again convened in the Supreme National Security Council to discuss the U.S. withdrawal from the nuclear deal.

Two out of three groups were badly damaged by the U.S. withdrawal from the JCPOA, while the third group was relatively unharmed:

Rouhani, who had invested his entire political capital on the nuclear deal, lost all credibility among the ruling elites but also among the voters, who accused Rouhani of reneging his promises rather than blame the U.S. for walking out of the nuclear agreement.

Khamenei’s position was even worse than Rouhani: Rouhani had pushed the Supreme Leader to publicly support a nuclear deal, which for all practical purposes collapsed after the U.S. withdrawal. Khamenei lost face and publicly admitted his own mistake. Addressing the public on August 13, 2018, Khamenei, for the first time in his capacity as the Leader of the Revolution and Iran’s head of state, admitted a mistake by declaring: “Negotiating the JCPOA [Joint Comprehensive Plan of Action] was a mistake. I committed a mistake concerning the negotiations by giving into the pressure of the gentlemen [reference to President Hassan Rouhani] to experience [negotiations] and they violated the defined red lines.” Khamenei also claimed Rouhani, presumably in a private conversation with the Leader, had admitted: “Had it not been for restrictions defined by you, we would have conceded more concessions [to the United States].”

Khamenei’s speech was widely reported by the Islamic Republic news agencies, but within a few hours all references to Khamenei admitting his own mistake was edited. In some versions of Khamenei’s speech, there is also no longer reference to Rouhani admitting that he would have given further concessions had it not been for the Leader. The Persian site of The Office of Preservation and Propagation of the Works of His Holiness Grand Ayatollah Khamenei, which always brings full text transcripts, audio and video of his speeches, currently displays a redacted version of Khamenei’s speech, in which the section with Khamenei admitting his mistake is removed.[24]

The IRGC on the other hand, did not face problems and difficulties of Rouhani and Khamenei. The Revolutionary Guard had not vetoed the JCPOA, but abstained from endorsing it in public. Once the U.S. withdrew from the nuclear deal, the IRGC used it as proof of their own foresight that Washington can’t be trusted.

Apart from the difficulties of finding a face-saving formula and explaining the U.S. withdrawal from the JCPOA to the Iranian public, the ruling elites of the Islamic Republic began discussing the motives behind Washington’s new approach towards Tehran. While the precise deliberations of Khamenei, Rouhani and the IRGC in the Supreme National Security Council are not known to us, an adviser to the Supreme National Security Council quoted in the July 25, 2018 edition of Donya-ye Eqtesad[25] disclosed the range of interpretations of the “maximum pressure” campaign in Tehran:

•The U.S., despite its reassurances to the opposite, desires to overthrow the Islamic Republic without a military invasion.
•The U.S. desires to change the behavior of the Islamic Republic.
•The U.S. may desire to change the behavior of the Islamic Republic, but the “maximum pressure” campaign may inadvertently result in collapse of the Islamic Republic.

Based on this analysis, the Supreme National Security Council predicted future scenarios and devised a strategy:

•In the first scenario, the Islamic Republic shows strategic patience and remains in the JCPOA as it reaches an agreement with the EU, Russia and China to minimize impact of U.S. sanctions against Iran’s oil and gas exports.
•In the second scenario, the EU, Russia, and China can’t protect Iran’s oil and gas exports. The Islamic Republic responds with limiting the level of its commitments within the JCPOA.
•In the third scenario, U.S. economic warfare provokes social unrest in Iran, and the Islamic Republic responds by provoking incidents in the Persian Gulf to impose a price on the U.S. and U.S. allies in the Middle East. The closer Iran and the U.S. or U.S. allies get to a war, the more willing the U.S. will be to remove sanctions against the Islamic Republic and find a negotiated solution to the crisis.

The Islamic Republic has since meticulously followed its early strategy:

Initially, Khamenei chose strategic patience and addressing the public on May 8, 2018, he accused the U.S. of looking for various pretexts to overthrow the Islamic Republic.[26] Yet he instructed the government to remain committed to the nuclear deal but to get “credible guarantees from the European” powers.[27]

Rouhani followed suit on live television by emphasizing Iran’s commitment to the nuclear deal but also added: “I have instructed the Atomic Energy Organization [of Iran] to prepare for re-activation of unrestricted industrial [scale] enrichment [of uranium].”[28] On the very same day, Rouhani, in a letter to the governments of France, Britain, China, Germany, and Russia on the anniversary of the U.S. withdrawal from the JCPOA, expressed his government’s decision to “reduce some of its obligations under the nuclear deal.”[29]

Representative of the third group among the ruling elites of the Islamic Republic, Major General Mohammad Ali Jafari, then IRGC chief commander, congratulated Iranians upon the U.S. withdrawal from the nuclear deal, and on May 8, 2018 claimed he knew all along Washington was not trustworthy.[30] However, rather than demanding Iran’s withdrawal from the JCPOA, Jafari emphasized Iran’s unwillingness to compromise its ballistic missile arsenal and program to accommodate Washington’s new demands.

The Islamic Republic’s strategic patience did not achieve its goal, and Rouhani failed to persuade the remaining parties in the JCPOA to protect Iran’s oil exports against U.S. sanctions. Next followed the May 12, 2019 incidents, where four ships were targeted near the strategic United Arab Emirates port of Fujairah.[31] On June 13, 2019 two oil tankers near the Strait of Hormuz were attacked.[32] On June 20, 2019, the Islamic Revolutionary Guard Corps (IRGC) shot down a United States surveillance drone[33] and on July 20, 2019 it seized a British flagged tanker.[34] Further escalating the crisis, state-owned Saudi Aramco oil processing facilities at Abqaiq and Khurais were attacked on September 14, 2019.[35]

Unsurprisingly, the Islamic Republic did not accept any responsibility for the attacks, with the exception of the seizure of the British flagged vessel. But surprisingly, the United States, in particular Ambassador John Bolton, then national security adviser to the president, who had earlier warned Tehran of Washington’s redlines, did not act upon breach of those redlines, which forced United Arab Emirates, and to some extent even Saudi Arabia, to reach out to Tehran in an attempt to prevent future attacks.

While the Islamic Republic may find some satisfaction in widening the gap between the United States and its Arab allies, Tehran’s counter-measures have not produced the one policy objective it covets most: To persuade president Trump of easing his administration’s “maximum pressure campaign” against Iran. Still worse, from the Islamic Republic’s perspective, those counter-measures increasingly appear to alienate the remaining parties within the JCPOA, in particular the Europeans, who are trying to salvage what remains of the nuclear deal, and Japan, which has persistently attempted to solve the crisis.

We have already witnessed sequential realization of the scenarios explained by an adviser to Iran’s Supreme National Security Council, which embody the Islamic Republic’s “maximum resistance”: Diplomatic effort to protect Iran against US sanctions, restricting Iran’s obligations within the JCPOA and attacks against shipping in the Persian Gulf region and oil infrastructure in Saudi Arabia in September 2019.

Lack of response from the United States to the Islamic Republic’s provocations suggest the calculation of Iranian strategists was right and Trump does not seek war, but there is still no sanctions relief in sight from the U.S. Combination of lack of U.S. response and continued sanctions against the Islamic Republic in turn means there is increased possibility for further Iranian attacks and provocations, which also heightens the risk of miscalculation and unwanted war.

But as the Islamic Republic is facing social unrest because of the sanctions regime, and as Trump desires a diplomatic victory prior to the November 2020 presidential election, there is also a chance for a show of “heroic flexibility” from both sides and a Trump-Kim style summit between the presidents of the Islamic Republic and the United States.
U.S. and Iranian leaders emphasize they are not seeking war. Disentangling the United States from wars in the Middle East was one of Trump’s main campaign themes, and, now as president, he is probably just as disinclined to start a war against Iran. The regime in Tehran, acutely aware of the formidable might of the United States, is just as wary of starting a war it knows it will lose.

However, both countries may be inching toward a situation in which miscalculation or accidents risk starting a military confrontation. If the IRGC, convinced that the Trump administration is aiming to bring about the economic implosion of the regime rather than pursuing a land invasion of Iran, and calculating a state of heightened tensions strengthens its hand in the domestic struggle for power in Iran, sets aside its strategic patience and pursues a policy of active resistance, this could increase the risk of an unwanted war.