What does Iran stand to lose if the ceasefire with the U.S. collapses?

0:00This is Ira Glass of This American Life. Do you know our show? Okay, well, either way, I'm going to tell you about it. We make stories that hopefully pull you in at the beginning with funny moments and feelings and people in surprising situations, and then you just want to find out what is going to happen and cannot stop listening. That's right. I'm talking about stories that make you miss appointments. This American Life, wherever you get your podcasts. Today on State of the World, what does Iran stand to lose if the ceasefire with the U.S. collapses?

0:34You're listening to State of the World from NPR. We bring you the day's most vital international stories, up close where they're happening. It's Friday, July 10th. I'm Greg Dixon. Is there still hope for the ceasefire between the U.S. and Iran? Speaking at a meeting of NATO, President Trump said the ceasefire is over, but that he is open to negotiations. That statement came after days of renewed airstrikes between the two sides. In a few minutes, we'll hear about what the consequences of this war have been for U.S. military readiness in the Middle East. But first, what would the consequences of a collapsed deal be for Iran?

1:12We know President Trump wants a deal to help bring down oil prices ahead of midterm elections. Iran stands to lose out on billions of dollars without a deal. NPR's Jackie Northam tells us more about the stakes. She spoke to Mary Louise Kelly. So to take stock of where we are, there was this agreement that was signed three weeks back. President Trump wanted the Strait of Hormuz open. He thought he got what he wanted. What did Iran get out of that deal? It got a lot of sweeteners from the U.S., which would have equated into a windfall of money. And, you know, that included the potential unlocking of tens of billions of dollars of Iran's own money that's been frozen in foreign banks.

1:52And this is from oil sales it had made before Trump pulled out of the Obama nuclear deal in 2018. The exact amount isn't known, but I spoke with Suzanne Maloney, and she's an Iran specialist at the Brookings Institution. And she says getting that money could be a lifeline for Iran's battered economy if the regime held up its end of the agreement with the U.S. Here she is. There really is quite a sizable amount of funding Iran has not had access to. that would be potentially provided if, in fact, we see the reciprocal steps that the Iranians are responsible for making good on their commitment to reopen the Strait of Hormuz.

2:30Now, the agreement also proposed that a$300 billion investment fund be set up for reconstruction. And Trump suggested Iran's Gulf neighbors, such as Saudi Arabia and the UAE, could make up the core of that fund. But, you know, this fund was in its very, very early stages. Well, and am I right in recalling, Jackie, that the other sweetener, the other big incentive the U.S. had offered was waiving all sanctions on Iran's oil. That must have been huge for Iran. Oh, yes. It was important to Iran and potentially worth a huge amount of money. You know, oil is a key driver of Iran's economy, and there have been sanctions on the sector since Trump pulled out of the nuclear deal in his first term.

3:10Iran has still been able to sell to China, but it's been at rock-bottom prices and has had to move the crude using a shadow fleet, you know, these old oil tankers. I asked Gregory Brew what lifting the sanctions did for Iran, and he's a senior analyst at the Eurasia Group, and he focuses on both oil and Iran. And he said initially countries were skittish of buying Iranian oil, despite the waivers, because they didn't know how solid the agreement was. But he said over the long term, the potential value of the sanctions waiver was huge. With the waiver, Iran could have done direct deals with countries, could have done those deals in dollars, which would have been of great value to the Iranian economy.

3:51And it also would have reduced Iran's dependence on China. And Mary Louise, Bruce said Iran stood to make between eight and nine billion dollars during the two month agreement. I'm hearing a lot of would've, could have, like past tense stuff. So let me bring us up to this week when we saw the U.S. slapping sanctions back on Iran's oil. Why? Well, the U.S. pulled back on those waivers after Iran attacked three tankers in the Strait of Hormuz. And the vessels had been trying to transit the Strait using a route that hugs Oman's coastline rather than Iran's coastline. Now, Tehran says it dictates what happens in the Strait.

4:28And so launched these strikes on the vessels to send a message. But the U.S. says, no, Iran does not control the Strait of Hormuz. And so revoked the waivers and launched airstrikes on Iran. The regime was furious because those waivers would have put much needed money in its coffers. And that's really what sparked this latest round of fighting. That's NPR's Jackie Northam. Thank you. Thank you. This war that has lately been on and off has been going on for months. And with Iran's attacks on bases in the region, it has taken a toll on U.S. military readiness in the Middle East. For details, we're going to hear from Joseph Votel.

5:07He's a retired four-star general who served as commander of U.S. Central Command from 2016 to 2019. He oversaw military operations across the Middle East. And he spoke to NPR's A. Martinez. How do we know how much damage Iran has inflicted on U.S. bases in the Middle East? How much? So we're primarily relying on open source information right now. I think it's understandable that the U.S. government or the Department of Defense wouldn't openly talk about the amount of damage that has taken place. But I think based on what we've seen over the last four or five months, we can conclude that there has been some substantial damage to U.S.

5:49regional basing network. And what I mean by substantial is it's widespread and it's operationally relevant. Just in the last 72 hours, the Iranians have gone after our basin in at least five different countries across the region. So it shows the vulnerability of fixed insulations to sustained attack. And, of course, the U.S. has relied on this forward basin as kind of a key principle in our presence and strategy in the Middle East. And, of course, that has now turned into the primary retaliatory targets that Iran is going after. And we've seen destruction of hangars, fuel depots, radars, satellite communications, air defense equipment, troop locations.

6:30And, of course, it's caused the U.S. to have to think differently about how it bases and operates in the region. So on that, on thinking differently, would it be feasible for the U.S. to relocate military assets to maybe Israel or Egypt? That's something that retired CENTCOM commander General Frank McKenzie has suggested. I'm curious what you might think of that. Yeah, no, I think that's right. I think there's a variety of options here, and I think we have to acknowledge that there's probably an active reassessment for the future. So there's a few things we can do. We can rebuild and harden core hubs there, and some of them are already hardened, but they could be rebuilt.

7:09We could reduce exposure in some of the countries where we are seeing more and more strikes. Kuwait and Saudi Arabia, in particular, Qatar is particularly vulnerable. Well, we can shift some of these functions westward, and we can certainly expand selective use of facilities into Israel and then use their very capable protective architecture to help protect that. And we could adopt kind of a distributed network. So I think as we look forward, I think we're likely to see a combination of all of those things taking place. General, last month when we spoke with you last, you said that U.S. defenses in the Gulf have been effective against drone and missile threats.

7:45Is that still the case? I think that is. I think most of what we're seeing right now with kind of these retaliatory strikes that Iran is launching is most of them are defeated. They're not having any substantial effect. That said, I think what this does do is it does put a high premium on the force protection measures that the U.S. and our Gulf and Middle East partners have in place here. And there's a real focus on that particular domain. How much more can U.S. allies in the Gulf take? I mean, what would be their pain tolerance at this point? Well, they're demonstrating some level of resilience.

8:25I think certainly there's a lot of stress that comes along with this targeting. They are increasingly being drawn more and more into this. And certainly, again, if there are effective strikes against critical civilian or energy infrastructure, I think that's an escalation that I think would propel this into another level of political discussion and concern as we move forward. So I think it's the nature of what is actually being struck. And then I think, secondly, it's the sustainment of how long can this go on without having more dramatic effects on economies and business and other things that these countries rely on.

9:13Do you believe that Iran is willing to risk prolonged war with the United States to maintain control over the Strait of Hormuz? Are they willing to just go as far as it's going to take? I absolutely do. I think that's a big takeaway out of just these last 72, 96 hours that Iran is principally focused on permanent sovereign control of the Straits of Hormuz, and they are willing to accept the risk of large-scale conflict before they're willing to relinquish it. And one more thing really quick. Did Iran use the temporary ceasefire to rebuild its military capacity? Is that something that's in the realm of possibility?

9:48It absolutely is in the realm of possibility, and they've got some capabilities they can rely on. I would expect that they would try to reconstitute some of those capabilities. That is retired General Joseph Otel. Thank you very much for your thoughts on this. Yes, good to be with you.

10:13That's the State of the World from NPR. Thanks for listening. This message comes from Squarespace, a platform for building a custom on-brand website. Choose from award-winning templates, showcase your work, and manage payments. Visit squarespace.com slash NPR to get 10 % off your first purchase of a website or domain. President Trump says the ceasefire with Iran is over. This week on Consider This, a former high-ranking U.S. diplomat shares his thoughts on what could happen next. The rulers in Tehran clearly believe they have a stronger will than the United States. I don't think there are any good options.

10:50That's this week on Consider This. You can get the full story behind the headlines every afternoon. Listen on the NPR app or wherever you get your podcasts. This is Tanya Mosley, co-host of Fresh Air. From mail-in ballots to racial gerrymandering, a lot is at stake for America's free and fair elections. I spoke with journalist Ari Berman about what he calls a final blow to the Voting Rights Act. My fear is that we are returning to a politics of Jim Crow in the South. Listen to Fresh Air on the NPR app or wherever you get your podcasts.