Iran Political Risk Report (May 9)

Big-Picture Outlook

Iran is pursuing a cautious but pragmatic strategy to relieve economic pressure through a possible nuclear deal with the U.S., while repositioning itself in the regional order with the aim of reining in Israel’s offensive plans. Attachment to appearance on both sides — the U.S. wanting more than JCPOA, Iran wanting its domestic nuclear fuel cycle — make a full-fledged deal difficult to achieve, but negotiators can reach an interim agreement allowing temporary wins and freezing escalation in the medium term.  

Key Highlights

• The current Iranian administration offers the right domestic backdrop for an active diplomatic track with the U.S., so far facing minimal domestic opposition and adopting a Trump-tailored rhetoric focusing on mutual economic benefits.
• The U.S. shows more openness to deal-making and regional deconfliction, as it is less driven by ideological positions than a desire for speedy results.
• Compared to a decade ago, Arab states support U.S. engagement with Iran and offer a diplomatic ramp off for potential escalation. Iran recognises this and similarly seeks an ease in regional tensions, notably to block Israel’s forward campaign against its interests.
• Tehran’s uranium enrichment and rollback of JCPOA commitments are calibrated to gain leverage, not to race toward a bomb. Iran wants to increase pressure without crossing red lines that would provoke war or force a diplomatic collapse.
• On the one hand, Iran will not turn into a goldmine following a deal. Tehran knows it cannot expect full reintegration in the global economy, and rather sees appeasement with the U.S. as a way to create pressure valves and attract Chinese investments down the line.
• On the other hand, talks failing is not synonymous to an immediate all-out U.S.-Israeli offensive on Iran, but will rather see tactical and controlled escalation - sabotage, sanctions tightening, covert strikes.
• Differences in expectations, verification processes, and symbolic red lines on both sides mean any agreement will likely be interim, compartmentalized, and difficult to sustain.
• Israel remains a wildcard, aggressively opposing any deal and capable of triggering sabotage or regional escalation that could unravel talks.

Download the Full Report

Use the link below to download the full report in PDF format, covering Tehran’s cautious outreach to the Trump administration, efforts to secure limited sanctions relief, and a strategic pivot toward a multipolar global order.