The European Union will remain committed to the Joint Comprehensive Plan of Action (JCPOA) and will head off increased tensions in its relationship with Iran. The Iran–UK stand-off over the seized tankers is a reminder that Tehran will always meet pressure with pressure. Hard-line forces on both sides will attempt to leverage the incident into increased antagonism, but stakeholders are likely to seek a way to release the seized tankers and calm the situation.
European efforts to mediate between Tehran and Washington will accelerate in an effort to compel a negotiated settlement.
The more hard-line elements in Washington — particularly National Security Advisor John Bolton — will, however, continue to look for opportunities to exacerbate the antagonism.
Iran’s proposal to allow permanent nuclear inspections will gain some traction and there will be attempts to clarify the components of the plan. This and other initiatives could pave the way for negotiations, though the situation remains fluid.
Many expect that US President Donald Trump and Iranian Supreme Leader Ayatollah Ali Khamenei will have to appoint special envoys to negotiate a longer-term deal, but that will be politically difficult. The first meetings will therefore have to remain secret before a more public process could be defined. This may conflict with Trump’s need to use the prospect of negotiations as a victory during his re-election campaign.
The key domestic priority for Iran remains the issue of the succession to Supreme Leader Ayatollah Ali Khamenei and the competition between the political factions for the post will overshadow decisions with regard to both Iran–US and Iran–EU relations.
A committee within the Assembly of Experts (AoE) has generated a list of nine candidates which will eventually be reduced to a shortlist of three. They will be approved by Khamenei but the final choice will be made by the AoE.
The Iranian economy will continue to show signs of more balance and especially because of the relative stability for the national currency.
Iranian oil exports will officially remain below 500,000 b/d, but authorities will work to find new outlets for oil and petroleum products. Millions of barrels of Iranian crude are being sent to China to be kept in ‘bonded storage’.