The impeachment of Iranian Finance Minister Abdolnaser Hemmati by the Majlis on February 2, 2025, followed by the resignation of Vice President Mohammed Javad Zarif and President Masoud Pezeshkian’s open admission that he favored negotiations with the United States but was overruled by Supreme Leader Ali Khamenei, all indicate that the regime in Tehran is under growing pressure, largely due to economic distress and disfunction. These internal tensions are likely to intensify as the full impact of President Trump’s “maximum pressure” policy is felt, including a significant decline in oil revenue. The U.S., Western nations and Israel should stand ready to enhance and exploit such signs of instability, and find ways to echo, encourage and assist (where possible) any eruption of popular anger. The regime may prove to be more brittle than ever before. However, as long as the Supreme Leader maintains authority, his steadfast refusal to negotiate from a position of weakness may lead to further escalation over the nuclear issue. Ultimately, given Iran’s current capacity to achieve weapons-grade enrichment within weeks, economic pressures and political destabilization, however significant, cannot in themselves be relied upon to halt or reverse Iran’s military nuclear project.
Iranian Economic Turmoil
The growing public and political discontent fueled by Iran’s poor economic performance has been evident for some time—well before the U.S. renewed sanctions. Despite being an energy exporter, the country is experiencing frequent blackouts and brownouts, and its national infrastructure is crumbling. The black-market value of the Rial has plummeted to approximately 927,000 to the dollar, more than 20 times the official rate. While the regime suggests that inflation is just over 30% annually, down from over 40% last year, the actual figures appear to be much higher, with household items increasing in price by 12% in just one month. The result, as the regime acknowledges, is that millions of Iranians have fallen below the poverty line, and rampant unemployment is casting a shadow over the future of the younger generation.
Moreover, the situation is likely to worsen as the full impact of U.S. policies—particularly Trump’s concept of “maximum pressure,” which includes secondary sanctions on those doing business with Iran—comes to be increasingly felt. Iran is already struggling to sell its oil, even to a strategic ally like China. With energy exports constituting the primary source of its income, Iran is facing acute internal pressures.
Additionally, the Iranian leadership has suffered serious setbacks in the region, particularly with the fall of the Assad regime, in which it invested billions of dollars in an attempt to keep it afloat. This combination of distress at home and wasteful, failed policies abroad further undermines the legitimacy of Iran’s revolutionary agenda, and there have been open signs of public discontent.
Signs of Political Instability
An obvious response to these challenges would have been to seek a diplomatic solution, either through direct talks with the Trump Administration or with key European players. President Pezeshkian himself openly advocated for this approach, suggesting clearly implying that a way could be found to return to a deal involving the lifting of sanctions.
However, hardliners have firmly opposed any negotiations with the “enemy”—America— from a position of weakness, and under the pressure of tightening sanctions. Rather than accepting the need to change course at the strategic level, they have pushed for a government purge, increased IRGC control over the streets and the economy through their ownership of corporate structures known as “Bonyads”—which constitute a significant part of the national economy. At the same time, they have openly expressed their disdain for reformist elements represented by President Pezeshkian.
This has resulted in a series of dramatic events reflecting a high degree of political instability:
- On February 2, 2025, the Majlis voted to impeach Finance Minister Abdolnaser Hemmati, providing a convenient scapegoat for the economic failures that have angered broad segments of the public.
- This was almost immediately followed by the resignation of Vice President Mohammed Javad Zarif, who a decade ago was the key negotiator with the U.S. and the P5+1 group over the Joint Comprehensive Plan of Action (JCPOA) concluded in 2015. Zarif, perceived as an advocate for returning to negotiations, was targeted by the hardliners.
- Under these circumstances, President Pezeshkian openly admitted that he had favored opening a channel for negotiations with Trump, whom hardliners see as the “murderer” of Qassem Suleimani. However, as Supreme Leader Khamenei opposed this initiative, Pezeshkian now advocates for a strong, unified stance against “the enemy.”
Implications for US, Western and Israeli Policy
The position of the Supreme Leader indicates that, at least in the near future, a return to negotiations—and hence the prospect of relief from tightening sanctions— is not in the cards. Khamenei has consistently promoted a “revolutionary economy” that can endure severe austerity and thus assert Iran’s independence from the West, and he is expected to maintain the current course of rejectionism. The U.S. will likely respond with further actions, and it remains to be seen how effectively the combination of pressures on China and courtship of Russia will deepen Iran’s isolation and economic distress.
If the outcome is indeed a deepening crisis within Iran and growing social unrest, the results may be unpredictable. There are indications that the regime is weaker internally than ever, that the regular troops of the IRGC may hesitate to fire on demonstrators if mass protests resume, and that the regime’s support from its power base among the lower rungs of Iranian society may be waning. Developments in Tehran could follow a non-linear, dramatic trajectory, similar to events in Cairo in 2011 and Damascus in 2024.
The U.S., key European players, and Israel—in its own way— need to prepare for such an eventuality by ensuring they have the tools to be ready for ongoing developments; for example by supporting the mobilization of anti-regime forces, securing access to social media, and engaging in dialogue with emerging opposition forces once they surface into the open (efforts to engineer such forces from outside are less likely to succeed).
At the same time, a caveat is in order: placing all hopes on such developments,—which would of course be welcome if they occur—could dangerously distract planners and policymakers in Washington, Jerusalem, and key European capitals from the necessity of preparing “other options,” namely the use of military means to stop the Iranian nuclear project dead in its tracks. There is no way to predict when, or even if, internal upheaval in Iran will neutralize the threat posed by the current regime. Conversely, the clock is ticking on uranium enrichment, drawing ever closer— no more than months away— to a weapons-grade stockpile, and must be turned back soon.
JISS Policy Papers are published through the generosity of the Greg Rosshandler Family.
Photo: IMAGO / ZUMA Press Wire
