TEHRAN/WASHINGTON — Thursday’s inauguration of conservative hard-liner Ebrahim Raisi as Iran’s new president has clouded prospects for restoring a nuclear deal between the Mideast nation and the U.S.
“I will protect our nation and the people,” Raisi declared after he was sworn in. “I’ll do everything in my power to have [U.S.] sanctions lifted,” he added, signaling he would drive a hard bargain at the negotiating table.
Officials from more than 70 nations attended the inauguration, according to Iran’s foreign ministry, including about 10 heads of state. The European Union sent Enrique Mora, the deputy secretary-general of the European External Action Service.
Raisi has indicated he will pivot sharply from the more conciliatory approach of his predecessor, Hassan Rouhani. When Iran’s supreme leader Ayatollah Ali Khamenei endorsed Raisi on Tuesday, the then president-elect criticized the failures of Rouhani’s foreign and economic policies.
And when Rouhani spoke with Khamenei for the last time as president at the end of July, the ayatollah said the lesson learned from his administration is that you cannot trust the West.
But now as president, Raisi will no longer be able to pin all responsibility on Rouhani and the moderate faction. He must now address a multitude of issues both foreign and domestic.
Although Raisi has taken an unyielding stance concerning the restart of the nuclear accord, circumstances have changed dramatically since the agreement was struck in 2015. The world has shifted to decarbonization, meaning there is unlikely to be such intense demand for petroleum as prior to the 2014 start of the negotiations leading to the historic deal.
The effectiveness of lifting U.S. sanctions is also a critical issue. The COVID-19 pandemic has affected globalization, with multinationals looking to scale down their supply chains. Many companies are hesitant to make new investments in high-risk markets.
The Iranian economy remains under pressure as well. Real gross domestic product recorded negative growth in 2018 and 2019, followed by only marginal expansion. Iran’s inflation rate has risen to 50% due to its weak currency.
In addition, the southwest region of the country is experiencing severe drought, which has triggered protests in multiple cities. In the capital Tehran, power shortages have become problematic.
What is more, the pandemic has weakened Iran. The internationally isolated country has lagged in vaccinations, and is setting records with well above 30,000 new coronavirus cases a day.
Against this backdrop, other tensions simmer. The Mercer Street, a tanker managed by an Israeli company, sustained a drone strike at the end of July near the Strait of Hormuz. Iran denies involvement in the attack, but the event once again underscores the risk of an unexpected clash.
The U.S. under President Joe Biden had sought to put the process of restoring the nuclear deal in motion before Raisi’s inauguration. However, that plan did not materialize.
“There’s a real risk here that they come back with unrealistic demands about what they can achieve in these talks,” Robert Malley, Biden’s Iran envoy, said recently, expressing a pessimistic view of engaging Raisi’s negotiating team.
While the Biden administration says it will maintain dialogue with Iran, it has hinted that it is prepared to intensify pressure. If the talks do not bring progress, the U.S. may impose new sanctions on Iranian oil exports to China, according to a report in The Wall Street Journal. The idea is to inflict damage on the Iranian economy and extract concessions.
On Wednesday, U.S. Secretary of State Antony Blinken and British Foreign Secretary Dominic Raab discussed by phone a response to Iran regarding the attack on the Mercer Street. NATO also condemns Iran for the attack, potentially setting the stage for retaliatory measures coordinated between the U.S. and Europe.
The nuclear talks carry outsize implications for the Biden administration’s efforts to confront China. Should Iran push forward with nuclear development and induce a reaction from Israel, the U.S. would be in a poor position to reduce its focus on the Middle East.
“Expect Raisi to deepen Iran’s economic ties to China,” said Barbara Slavin, director of the Future of Iran Initiative at the Atlantic Council, a U.S. think tank.