Ending the Iran War: a New Balance of Power in the Middle East | Hamidreza Azizi

0:00Demetri Kofinas:What's up, everybody? My name is Demetri Kofinas, and you're listening to Hidden Forces, a podcast that inspires investors, entrepreneurs, and everyday citizens to challenge consensus narratives and learn how to think critically about the systems of power shaping our world. My guest in this episode of Hidden Forces is Hamidreza Azizi, an expert on Iranian foreign policy and the author of The Axis of Resistance, Iran, Israel, and the Struggle for the Middle East. We spent the first hour of our conversation today picking up where Hamidreza and I left off when he was last on the podcast, only a few weeks into the commencement of Operation Epic Fury.

0:40Demetri Kofinas:We discussed the transformation of Iran's governance structure following the assassination of its supreme leader, Ali Khamenei, the contours of the Memorandum of Understanding signed between the United States and Iran, and how it compares to the JCPOA signed by Obama in 2015, the question of whether Iran still needs a nuclear weapon at all, or whether demonstrated control over the Strait of Hormuz has become its functional equivalent, the role of Hezbollah in Lebanon as the most volatile variable in any lasting peace arrangement, and an honest accounting of what Iran has lost in this war, and why those losses, not just its leverage, are what have driven Tehran to the negotiating table.

1:22Demetri Kofinas:The second hour turns to the broader regional and geopolitical consequences of what has transpired over the last few months. We deepen our discussion about the changing nature of the Iranian regime and what that means for its relationship with the United States and other countries in the region, before moving to a series of conversations about Israel, the Gulf states, Saudi Arabia, and China. We discuss Netanyahu's political future, the future of the U.S.-Israeli alliance, the implications for Saudi Arabia and other Gulf states, along with their financial inflows, and their attractiveness as destinations for wealthy expats and human capital, and conclude with a discussion about China, its ambitions across its Western horizon, and whether a peace agreement between the U.S.

2:06Demetri Kofinas:and Iran is truly a strategic defeat for the United States, or if in fact it may herald a new era of political and geostrategic realignment in the Middle East that could prove to be more stabilizing and less violent than what we have learned to live with in recent decades. If you want access to all of this conversation, go to hiddenforces.io slash subscribe and join our premium feed, which you can listen to on your mobile device using your favorite podcast app, just like you're listening to this episode right now. If you want to join in on the conversation, become a member of the Hidden Forces Genius Community, which includes Q &A calls with guests, discounted access to their party research and analysis, and in-person events like our intimate dinners and weekend retreats, you can also do that on our subscriber page.

2:53Demetri Kofinas:If you still have questions, feel free to send an email to info at hiddenforces.io, and I, or someone from our team, will get right back to you. And with that, please enjoy this incredibly comprehensive and timely conversation with my guest, Hamidreza Azizi.

3:15Demetri Kofinas:Hamidreza Azizi, welcome back to Hidden Forces. Thank you for inviting me again. It's a pleasure to join you. I'm excited to have you back on the program. So I'd like to begin this conversation by broadening the context to include our last discussion when you were first on the podcast, which was almost three weeks into the commencement of Operation Epic Fury, and which came three weeks before Trump, some may remember, announced that he had achieved total and complete victory following the ceasefire deal with Iran that immediately fell apart and which led to a seemingly unending series of dubious and contradictory statements from the White House about the imminence of a new deal and all sorts of other confusing statements.

4:01Demetri Kofinas:At that time, Iran was still targeting Gulf infrastructure, including US military bases, signaling its commitment to fighting what appeared at that time, at least to be an open-ended war of attrition. Looking back on that conversation in the context of everything that has transpired over the last three months, how did your expectations then match up with how negotiations have progressed since and the way in which this war of attrition has unfolded? Well, I think the counters of what we have seen over the past few weeks after the cessation of active warfare and during the ceasefire was already evidence when we were discussing, because I remember that we discussed the reasons actually for the start of the war and the expectations on the side of the US and Israel of a very quick and decisive victory.

4:58But three weeks into the war, it was, I think, already clear that things were going differently and not as expected by President Trump and also Benjamin Netanyahu. So I think Iran managed to somehow eventually turn it into a war of attrition in which not only through targeting the U.S. military infrastructure in the region and also through attacks on Israel itself, especially in the second half of the war, but also through the effective closure of the strait-of-war most to impose costs on the U.S. that eventually led to the ceasefire. And now to the memorandum of our understanding, that was initially signed electronically and is going to be signed on Friday.

5:51So this mismatch, I think, between the initial expectations of initiators of the war and the realities on the ground and the actual capabilities of Iran, I think, was already clear. So this is how I remember our conversation. And I think that's only proven to be the case since then.

6:13Demetri Kofinas:So just again, to remind people of the context, this was when the United States was actively engaged in taking out just layers upon layers of Iranian leadership. Of course, they took out the Supreme Leader to initiate the Operation Epic Fury on February 28th. At that time, you raised doubts about whether there was anyone left in the Islamic Republic with the political authority and standing to negotiate a durable settlement. that would be accepted by all the relevant factions holding power within the country. Has anything changed within Iran's leadership structure since then that makes the prospects of peace more likely today, in your view?

6:51I think the whole structure changed. So back then we were discussing about the individuals within the system. What eventually transpired was somehow the transformation of the system itself. And I have discussed this at length in an article I wrote last month for the Time magazine. And to put it in a nutshell, actually, a system which was very much vertical and hierarchical under Ali Khamenei, the former Supreme Leader, in which the Islamic Republic indeed had some institutions like quasi-democratic institutions, and like the parliament, like the institution, like the Supreme National Security Council.

7:35But everything, all the decisions, especially on strategic matters like war, peace, nuclear diplomacy, etc., would have to go through the Supreme Leader and have his endorsement. So he had the veto power. And also, importantly, he was the final arbiter in the disputes that could arise between different parts of the government and the political system. So after him, and also after some heavyweights like Ali Larijani, for example, were also removed during the US and Israeli strikes, the system started to coalesce somehow around its security core. And what we are seeing right now is a leadership that is very much military security oriented.

8:24I hesitate to call it a military system, for example, because it's different than a military junta, for example, you know, as we know, kind of in the standard sense of the word. There are people who are close to the Revolutionary Guards, former commanders, including, by the way, the current chief negotiator and the parliament speaker, Mohamed Baghal-Ghalibov, but also the current commander-in-chief of the IRGC. And some people like the Chief Justice Fulham Hussain Mohseni Ajayi, who's also from within the security establishment. And the new Supreme Leader, Moshna wa Khamenei, is one among the few, I think.

9:02He doesn't have the same authority, neither in terms of political influence nor religious acceptance within the critical circles that his father has. So in that sense, in a way, making a strategic decision within the system takes time. And that was the reason, for example, that it took a lot of back and forth and a lot of mediated diplomacy until we reached what we have Roy Snowden and Morando understanding. But one can argue that because it has the support of the core elements of the system, especially the powerful IRGC, I mean, we can expect that it's going to hold, at least as far as Iran is concerned.

9:44And we have already seen signs of that. If you compare the current memorandum, and I must say that it is very initial, it is only the starting point, not the end point. But if you compare it with the 2015 nuclear deal, the JCPOA, the IRGC actually was the party at the time that was somehow trying to disrupt this. It was partly out of the factional rivalry with the so-called moderate camp led by former President Afghanistan Rouhani. On the other hand, out of this kind of rigid, ideological and at the same time, strategic considerations of confrontation with the United States. But this time, so far in the past couple of days since the announcement of the Memorandum of Understanding, the Deputy Commander of IRGC on Political Affairs, for example, and then Katamul Anbiya Central Headquarters, which is in charge of coordinating Iranian armed forces, then the head of the Vots Force, and the commander of the IRGC Airspace Force, all of them have come out either directly or basically backing the diplomatic team.

10:52So these are the developments that we have seen. So people within the system seem to be kind of in agreement right now that this is the best path forward, not necessarily that it's going to be eventually quite successful, but consensus within the system means that at least there's clarity how they should proceed.

11:11Demetri Kofinas:So actually, my next question was going to be what has created the conditions for the signing of this recently agreed upon MOU. But more specifically, I want to clarify because it sounds like the leadership changes as a result of this war of attrition and the, in some cases, targeted assassinations, many cases, of elements of both the Islamic Republic's leadership as well as the IRGC's leadership. It seems that that has also played a role in creating the conditions for this latest MOU on the Iranian side. Is that fair to clarify? Absolutely. Look, this transformation within the Islamic Republic, the way from clerical dominance and towards more RGC dominance or military security dominance was already underway.

12:03I would say at least since 2009, since the Green Movement protests, which were, to give some context, the protests which was triggered by the rigid elections that kind of, you know, allowed Mahoud Ahmadinejad, the former president, to stay in power for the second time. People went to the streets in support of the opposition figure, Mir Hossein Mousavi at the time. Anyway, at that time already, people started speaking a sort of an IRGC coup. I mean, a coup d 'etat maybe is not the best word to describe it, but in the sense of, you know, gradually, or as my colleague Ali Al-Sona puts it, a creeping coup by the IRGC that, you know, took shape over almost two decades, more than two decades.

12:50It was more or less what actually happened. So the security establishments around the IRGC started somehow to increase not only their political power, but also increasingly economic power. They started to dominate foreign policy as well. And the election, or I would say selection, of Erdogan Raisi was a turning point here in 2021, which tilted the balance completely toward the IRGC. Raisi himself was a cleric, but he was rather a weak figure, again, endorsed by Ali Khamenei on one hand and the security establishment on the other. Anyway, fast forward to this war, Ali Khamenei himself was the figure who was playing the balancing role between these two pillars.

13:39On the one hand, he himself had sort of cultivated the IRGC in its current form as a main pillar of his rule. And at the end of the day, we shouldn't forget that even as even the name suggests, it is the guardians of the Islamic revolution. So created for this very purpose of supporting the regime and kind of helping the regime survive. And on the other hand, of course, him being a cleric, basically keeping that part as well. So his removal paved the way somehow for a quick takeover by that very security establishment which was quite entrenched within the system. Mostafa Khamenei is himself a cleric, but he is better known for his network within the IRGC and the kind of security system.

14:33So it was somehow an opportunity that they took in order to finalize and formalize what was already going on. So in an ironic way, I would say the war contributed to this transformation and this kind of the state of affairs that we are seeing at the moment.

14:53Demetri Kofinas:Can any of what has transpired here be described as regime change? I have to call it a regime change because at the end of the day, all the people who are now within the kind of, you know, leadership, let's say, or the people who are core decision makers, they are the same people who've been within the system, you know, holding very senior positions for decades. decades. Like Teh Khalifa, for example, he's been almost everywhere within the system, from the commander of the IRGC's Airspace Force, to the commander of the police, to the mayor of Tehran capital, to the Speaker of Parliament. He ran four times, if I'm not mistaken, for president, failed each time.

15:40But now he is basically one of the key decision makers. So is the case of Ahmad Wahidi, the current IRGC commander-in-chief, he was actually the first commander of the votes force, the one that is known more about Soleimani, but he was established by this guy. So when I'm saying that these people have somehow been expounding their power within the system and have shifted this balance away from clerical system towards the military, it indicates a shift in the nature of the system or the regime and not a regime change, because a regime change would be totally different. I mean, it is still authoritarian, even more than before, still close in terms of the circle of the elites in power.

16:27The only thing, as I said, is transition from a more vertical decision-making system at the top to a more horizontal one. That's the way describe it.

16:38Demetri Kofinas:So we'll have a chance to dig into much more detail with respect to the changes that have taken place within Iran. But let's just fast forward a second to the actual MOU and clarify what we know in terms of the details associated with the document that's going to be signed in person in Geneva on Friday. They already signed a digital copy, but both sides will be meeting in a couple of days. And again, I don't know if I mentioned this, but we're recording this on Wednesday, June 17th. What do we know about what has been discussed, the contours of any potential deal, and what has been primarily agreed to?

17:12I saw that CNN has published the text of the MOU earlier today. And it is actually the same text that I saw on Friday, even before the announcement of the agreements in some Iranian sources, like on social media, and then also some of the media published the counters of it. So both texts are kind of word by word similar. So my impression is that it is going to be the final one. So it's kind of 14 articles in this text. It is a short one, as Vice President J. DeWant said, one page or one page and a half, something like that. It starts by expressing commitments by both sides of a permanent end to the war and refusal to resort to the threat of war or use of force against each other in the future, respecting each other's sovereignty, territorial integrity, etc.

18:13Then there are some provisions about the lifting of U.S. naval blockade, which has been their ceasefire actually and during the ceasefire. And on the Iran side, the Iranians are committing to reopen the Strait of Hormons to commercial shipping within a window of 30 days. There are some provisions about negotiations, future negotiations regarding the Iranian nuclear program, also lifting of sanctions and so on. And there is a 60-day window, which is mentioned in the text as a period, which starts by the official signing of the documents in which the two sides are going to negotiate the details, including sanctions removal, including the details of Iranian nuclear concessions.

19:04And then eventually, Article 14 says that the final deal that's going to come out of this is going to be ratified at the UN Security Council as a binding resolution. But what I can see in this text is that the only actual commitments by both sides that can be understood from this is the sort of removal of this double blockade that's been there. So that is the only thing that is clearly sort of mentioned in this. Other than that, almost everything is just some general understandings. And that's why I think it is called the Morando understanding. And the details of each of them is going to be determined in the future negotiations.

19:53So it is broad enough for both sides, I think, to be able to claim victory. but it is at the same time ambiguous enough and potentially leave room for misunderstandings, miscalculations, and eventually a kind of failure to reach any actual final comprehensive agreement. So this is my impression from the text that is available right now.

20:21Demetri Kofinas:Yeah, that's another line of inquiry that I wanted to follow, which is essentially how seriously should we take these talks and the commitment to work out a potential deal along the preliminary terms outlined in this MOU. But before we discuss any of that, let's go back to the nuclear question. Because when we last spoke, you raised the possibility that the war had actually increased Iran's incentives to acquire a nuclear weapon, and you weren't alone in that, both because it demonstrated the very real costs associated with not having a nuclear deterrent, and also because their strategy of staying just below the nuclear threshold of breakout was treated by the US and Israel as being indistinguishable from trying to urgently develop a nuclear weapon, miniaturize it, and turn into a warhead that could be used to strike the US or attack any of its interests in the region.

21:17Demetri Kofinas:So my question for you is, does the leverage that Iran has to close the strait demonstrate to its leadership that it no longer really needs to obtain a nuclear weapon because a threatened closure of the strait is a more economical, less complicated and safer equivalent of nuclear deterrence with most of the benefits associated and none of the costs. There's debates ongoing in Iran between the experts and observers close to the government, which I think is kind of a reflection also of different trends in terms of thinking within the leadership. And it has to do with both elements of your question.

22:01First, about whether this war has actually necessitated or sort of proved the importance of acquiring nuclear weapon for Iran. And second, whether the Strait of Hormones actually can be a replacement for nuclear deterrence. So on the first question, since we spoke, I see kind of growing voices within Iran's strategic community, not at the official level. That's an important distinction. But within Iran's strategic community, those people whose thinking is believed to be impactful on the leadership's sort of approach. As I said, there's growing voices advocating for the development of a nuclear weapon.

22:45And despite some counter arguments, for example, that look, Israel has nuclear weapons, but we managed to target Israel rather successfully. And, you know, it didn't deter us. I mean, the Iranians from attacking Israel and so on and so forth. But they say, at least having nuclear weapons would guarantee that there's not going to be an existential threat to the system and to the country. And they refer to two things. First, obviously, the killing of the Supreme Leader. I see this kind of quite often, you know, comparing this, for example, I mean, comparing Iran to North Korea, to Russia. Can you imagine, for example, even in a scenario of a fierce war between Russia and the United States or North Korea and the United States that the US would target the leadership of Russia, for example, Putin or Kim Jong-un?

23:32Why? Because they have nuclear weapons. So these are the arguments that are already there. But the thing is, when it comes to the actual capabilities and when it comes to the technical assessment of what Iran has. And again, here we only can refer to the open source data and the sort of reports provided by IAEA, so long as they had access to the sites on the ground and also intelligence assessment by US and Israel. Iran doesn't have the infrastructure for weaponization at the moment, like at least quick weaponization, and also the kind of intelligence cover that would guarantee that if they decide to break out towards nuclear weapons, it's going to be undetectable.

24:16So these things, I think, are among the factors that make the leadership kind of more cautious and still pushing them towards thinking and seeing the nuclear program more as a leverage than an actual means for deterrence. And here, of course, comes the question of the straight up or most. So I think what has prevented the Iranian leadership from going towards the weaponization past is more the due factors that I mentioned, the lack of proper infrastructure and also intelligence exposure than the leverage that they have achieved in the Strait of Ormos. Because again, the arguments within the Iranian debates regarding the Straits of War was that, of course, we found this very important, very significant leverage that we always had actually given our geography, what we weren't aware of.

25:11And it's really played a significant role in helping us end the war in our terms somehow. But still, this leverage can gradually be weakened. And even if not rendered irrelevant, at least less significant in the future. And I think they have a point here because, look, already Saudi Arabia and the UAE have pipelines that bypass the Strait of Ormos, right? Each of them being able to ship at least 5 million barrels of oil per day. Saudi Arabia did this throughout the war and the chiefs fire. For UAE, it was more difficult because Iran continued its strikes against UAE. So there is a kind of a consensus on the argument that the Straits was the single most important leverage that Iran had in this war, but there is much less consensus on whether the same leverage can be used if there is a war in, say, like 10 years, 20 years, or something like that.

26:21Demetri Kofinas:So does that also imply that Iran remains just as, if not more, incentivized to maintain its acts of resistance, including its backing of the Houthis, if the solution for the Saudis and the Emiratis to an Iranian closure of the Strait of Hormuz is to divert more of their exports through the Red Sea? First of all, one thing I think which became clear, it was clear to me, so many people before the war as well. But this war, and especially the way that Iran treated Hezbollah and the Lebanon issue, what it proved was that this relationship, the relationship between Iran and many of these groups cannot really be described as patron-proxy relationship.

27:03Because in a patron-proxy relationship, you don't enter into a war to support your proxies, the proxies to fight for you. This was exactly the opposite of what happened just a couple of weeks ago when Iran decided to fire missiles toward Israel in retaliation for Israeli strikes on Dakhir in southern Beirut and threatened to do that again on the same day that the memorandum of understanding was eventually announced. Regardless of how successful Al-Fresh was or not, the strategic message was that at least as far as Iran is concerned, these groups are seen as allies. And when it comes to the Hussis, it's actually more so because the Hussis don't even have the same ideological affinity as Allah has with Iran or some of the Iraqi Shia factions have.

27:52I mean, the Zaidi face that the Hussis have is considered to be, you know, kind of a branch of Shiism, but it's not exactly the same as the 12-ish Shiism as Iran has. And also, look, when it comes to this concept of the axis of resistance, the network of Iranian partners and proxies, the Hussies are kind of late comers. They started their coordination with the Iran network in 2015. So in that sense, it very much, and here's my point, when it comes to the Red Sea dynamics, it's very much kind of affected by the dynamics between the Hussies and Saudi Arabia as much as it is, if not more. as the Iran-Saudi dynamics, for example, or the Iranian consideration.

28:37So there were already reports that Saudi Arabia was in close contact, not only with Iran, but also with the Hussies, offering them even assistance in order to dissuade them from closing the Red Sea and Bab al-Manda so that Saudi Arabia could do its business. I still do believe that in a scenario of the resumption of the war, like the full-scale war. And if Iran actually asked the Houthis to disrupt the Bab al-Mandav and the Ratsyat, at least partially, they would do that for their own ideological and also strategic considerations. But that didn't happen because Iran concluded that they could do it on their own, based on their sort of own control over the Straits of Hormuz.