Episode Notes:

Last week, Washington and Tehran reached a deal to secure the release of 5 American citizens held in Iran. Then, on Thursday, Iran’s foreign minister visited Saudi Arabia. To discuss these and other developments, we’re joined today by Naysan Rafati, the International Crisis Group's senior Iran analyst.

[:41] Prisoner deal

[4:43] Nuclear file

[7:23]  U.S.-Iranian dynamics

[10:27] Iranian-Saudi relations

Episode Transcript

Nicholas Danforth: My name is Nicholas Danforth and I'm an editor at War on the Rocks. You are listening to the WarCast, the members only podcast for what you need to know now. Last week, Washington and Tehran reached a deal to secure the release of five American citizens held in Iran. Then on Thursday, Iran's foreign minister visited Saudi Arabia. To discuss these and other developments, we're joined today by Naysan Rafati, the International Crisis Group's Senior Iran Analyst. Welcome back to the WarCast.

Naysan Rafati: Thanks, Nick. Good to be with you.

Nicholas Danforth: So, when we last spoke, I think it was about a year ago, it felt like a low point in US-Iranian relations, hopes for a nuclear deal had broken down, there were widespread protests in Iran. Does the deal that we saw last week represent a turn for the positive?

Naysan Rafati: It's interesting that you go back to that period last year because there have been a couple of swings of the pendulum. In mid-August last year, the Europeans were trying to mediate a mutual return to the nuclear deal to the JCPOA, and that ultimately fell apart at the beginning of September of last year. And what had seemed like a potential nuclear breakthrough quickly started to be followed by a rapid deterioration in US-Iran relations. I would say more broadly, Iran's relations with the West over the deadlock on the nuclear deal, over the transfer by Iran of UAVs that Russia used in Ukraine, and obviously, and most significantly the outbreak of protests in mid-September.

And that really kind of set a fairly negative tone and really closed any bandwidth on diplomatic engagement between Washington and Tehran. And as I said, even among Europeans, especially because of those two issues of human rights and the Ukraine war, clearly quite fundamental to how Europeans view their values and interests. But that deadlock doesn't make the problem set any easier to fix. And the US and Iran, Iran and the West have had and continue to have multiple areas of disagreement, whether it's on the nuclear front, whether it's on the regional front, whether it's on the Russia front and obviously in terms of the domestic situation in Iran. So, this release of US citizens, and at this point they're still in Iran, they've only been moved to house arrest for the moment and there are five of them.

Nicholas Danforth: And the expectation is next month they'll actually be sent home if all goes according to plan.

Naysan Rafati: I think that's a pretty major qualifier whenever you say something in your ongoing alter plan. We'll see. But it follows on chatter and hints over the past month or two, over the past several weeks. But certainly on the detainee issue, the US and Iran had been engaging. And as part of that arrangement, it seems as though the Iranians have initially furloughed these five US citizens with a view to their hopeful release. And as part of that as well, the US is facilitating the transfer of Iranian frozen assets that had been held in South Korea for the past several years through various financial channels to Qatar, and will oversee the dispersion of those assets in compliance with US Treasury regulations on humanitarian goods, so food, medicine and other non-sanctioned goods.

So, step one is will all of that actually pan out? Certainly there are always spoilers in any kind of US-Iran engagement, nothing ever goes smoothly. And you can imagine how many multiple parts there are to this just in terms of the finances of liaising between the US Treasury and the US government with the Republic of Korea, the Swiss, and the Qataris, obviously the Omanis and the Brits have been involved in various points over the negotiations. So, it's a puzzle with a lot of moving parts, hopefully they'll see them slot into place and the hostages can come home. But the question is also that these are two of the data points that we can see, but there are other interesting data points that start to point to a potentially more interesting and broader set of deescalatory understandings between the US and Iran.

Nicholas Danforth: Okay. So, let's take a step back then and talk us through what some of those are.

Naysan Rafati: Obviously, as I was saying before, there are a lot of issues on which the US and Iran disagree, there are lots of points of friction. The nuclear program obviously from a strategic point of view is one of the most significant. And the reality is that Iran's nuclear program without hyperbole is at the most advanced point it has ever been in its history. Iran has been enriching at near weapons grade, the monitoring and verification authorities of the International Atomic Energy Agency, the UN nuclear watchdog have been fairly limited. And the breakout time for a weapon, which is the amount of time it takes to accumulate one bomb's worth of facile material is a matter of days. So, you have that, you have the regional friction, and we've seen that again recently in terms of tit for tats in the Persian Gulf, the US has significantly increased the maritime presence in the region after Iran attempted to seize two commercial tankers on the 5th of July.

So, there's been F-22s, F-35s, a marine expeditionary force. There also have been attacks against US forces by Iran-linked proxies in Syria and Iraq. So, those are among the challenges among the points of friction. And the Wall Street Journal has reported that Iran may have slowed down its accumulation of 60% enriched uranium. Again, that is certainly interesting. We'll have more details I think next month when the IAEA board of govern actually meets. But that would be, obviously it's not a substantial rollback of its nuclear program. It's certainly not bringing it back into compliance with the JCPOA. But given where Iran's nuclear program is, given how close it is to weapons grade, given how close it is to breakout, a slowdown, I think from a non-proliferation point of view isn't never, but it would seem to at least remove some of the pressure on the escalatory potential there.

There's been a significant drop over the past several months in attacks on US forces in Iraq. The number of serious incidents in Syria seems to have dropped, and there's been some reporting that the US is also, who knows with how much success, conveying to the Iranians the need to limit their military support for Russia, particularly in the development of drones.

Nicholas Danforth: So, I saw an article about that. I wanted to ask how are these issues compartmentalized? Are they all being discussed on the same bilateral channels? Are there different tracks for each of them?

Naysan Rafati: In terms of big picture, coming back to the JCPOA, the 2015 nuclear deal, because that has been the most significant and some people will say it's one of the most infamous outputs of US-Iran engagement, some people will say it's the most constructive output of US-Iran diplomatic engagement, but it's certainly the most significant US-Iran diplomatic understanding of the post-1979 era. In that, and to a large degree in the negotiations over reviving it, there was a degree of compartmentalization. The concern that the US had and the approach that the US and the P5+1, so the other members of the Security Council and Germany who were engaged in these negotiations took, was that Iran does a lot of things that are considered destabilizing. But because the nuclear question was so profound, because the strategic implications of it would be so severe, it would have to be dealt with on its own terms.

So, under the JCPOA, it is a nuclear deal. And under the talks to try to revive it, what the Biden administration had said was that if the US was able to come back into this deal, it would use that as a platform for a stronger and longer agreement, meaning that they would try to improve the nuclear restrictions over time and also try to build it out and try to discuss some regional issues. Now, that obviously didn't happen. We came close in March of 2022 to a deal. The Russian invasion of Ukraine obviously changed the picture dramatically. Again in August of last year, we were close. But what's interesting right now is that again, all of these various moving pieces do have different stakeholders who are involved, and in some cases the US doesn't play a dominant role.

So for example, one of the US interests, certainly one of the US goals under the Trump administration was for Iran to stop providing military assistance to the Houthis in Yemen who were at the time firing drones and missiles as part of the war between them and the Saudi-led coalition. Now, there haven't been Houthi drones or UAVs for over a year now, not because of sanctions or what the US has done directly, but because there's been a truce in the Yemen war. As you mentioned, the Iranians and the Saudis are now on their own normalization track. And I think that from the US strategic perspective, that's not a net negative. If that means that one of their key allies in the region is not facing an acute threat from Iran or Iranian proxies, that's a positive even if the Chinese, for example, were involved in mediating some of that.

Nicholas Danforth: So, just to finish up then, yeah, tell us how that fits in to all of this.

Naysan Rafati: It's part of a broader process you saw. First of all, if you talk about US allies in the Gulf or the GCC countries, it's a bit simplistic to say that US allies in the region have always had bad relations with Iran or antagonistic relations with Iran, right? So, Iran's had fine workman-like relations with Oman. It's had fine workman-like relations with Qatar. It's had more difficult relations, especially with the UAE and Saudi Arabia. The UAE started to diplomatically reach out to Iran in 2019 when Iran started to respond to the US maximum pressure campaign with its own kind of counter pressure campaign. And that included targeting maritime shipping, it included targeting Saudi energy facilities. And more recently the Saudis also moved towards engaging Iran, especially through the Iraqis initially, and then ultimately in March with the Chinese mediated normalization agreement with Beijing.

For the Iranians, there's a logic to it, especially as relations with the West were getting worse. Their strategic calculus is, "Well, we can compensate for that by better relations with our neighbors and better relations with the East." I have my doubts about how far that theory can actually move in practice. And for the Gulf countries, including the Saudis, I doubt that there's any illusions that suddenly the Saudis and Iran would be bosom friends, but at minimum it would lower the threat perception that comes from Iran. Again, it's not a small issue for the Saudis that the Yemeni front has been quiet, at least in terms of attacks on Saudi Arabia for over a year. There are still occasionally shipments that are caught of Iranian weapons going to Yemen.

But in terms of the security threat that's coming from there, the process of the truce has been generally holding. The Iranians do not seem to have played a major spoiler role. And so I think again, in terms of this visit, it is continuing that process of normalization, but I'm still fairly bearish on this kind of turning normalization into a blossoming relationship of strategic and economics again, for both sides.

Nicholas Danforth: Thank you so much for joining us in the Warcast.

Naysan Rafati: Pleasure. Thanks for having me.