Time of Troubles

Welcome to the inaugural edition of the MBN Iran Briefing.

Iran matters. From the actions of its regime, to the aspirations of its 90+ million citizens, to its role as a regional geopolitical power, to its place as a major energy producer, to its presence as a destabilizing force with nuclear ambitions: Iran matters.

Each week I’ll bring you news and analysis about Iran that matters to you. Whether it’s an inside whisper from the corridors of power in Tehran to the latest protest chant, a different take on the regime’s sanctions-busting or what’s big in Iranian cinema now, the MBN Iran Briefing will be a one-stop take on Iran this week.

My history with Iran and the surrounding region goes back decades now. From my time at Princeton’s Department of Near Eastern Studies to founding Radio Free Europe’s Persian-language Radio Farda to overseeing Persian-language output for the BBC, I have never been far from what’s happening in Iran today.

This Briefing is the latest addition to MBN’s offerings of premier journalism on the Middle East, including Alhurra.com in Arabic and an English-language site, the just launched MBN Magazine, and our cousin the Friday Briefing, which has the best of our work from the week.

If you have any hot tips, suggestions, or questions, please feel free to email me at ailves@mbn-news.com.

Sign up to receive the MBN Iran Briefing. You can read the Arabic language edition of this newsletter here.

– Andres

TOP OF THE NEWS

Youth Clash

In 1982, the British punk rock band The Clash famously released the song “Should I Stay or Should I Go,” featuring the lyrics:

Should I stay,

Or should I go now?
If I go, there will be trouble
And if I stay, it will be double

This has been the quandary faced by young Iranians for years now. Just over half of Iran’s population is 34 or under – and 68 percent of young Iranians want to emigrate. Back in May, Iranian President Masoud Pezeshkian complained that, “We are raising children whose minds are set on leaving the country.”

Now Ali Khamenei has weighed in. Buried in a speech on Monday – in a rare public appearance since the June “12-day war” with Israel and the US – the octogenarian supreme leader lamented at length that the people want to leave Iran, and included a warning: “Some people may want to live in another country, but they should know that they are strangers there; you who go to so-and-so country, no matter what you do, no matter what point you reach, you are a stranger there.”

He also, for the record, mocked President Donald Trump, rejected new nuclear negotiations, and boasted of Iran’s missile capabilities. Not exactly breaking news there. But the bit on emigration is “the most MISSED part of Khamenei’s speech,” as Behnam Ben Taleblu of the Foundation for the Defense of Democracies noted on X,

Demographics is destiny – and, to put it a slightly different way, Iranians aren’t lying with their feet. Iran’s leaders are appealing to a sense of national pride to stem this tide. But more than ever, given the economic and geopolitical setbacks for Iran (more on that below) and the deepening repression, this is a trend that looks only likely to accelerate with this regime.

POST-GAZA IRAN

New Old Tack

So on that other file, what’s the regime thinking now? In a chat with me this week, FDD’s Ben Taleblu points out two surprises since the end of the 12-day war:

– Tehran has not left the Nuclear Non-Proliferation Treaty (NPT) despite earlier threats to do so for fear of putting more, not less, of a target on their back.

– Tehran has not rushed to enrich uranium to weapons-grade levels or 90% purity at any of its declared facilities, something analysts long feared could happen in response to the reimposition of UN sanctions on Iran. Why? Well, its declared enrichment sites seem to have been destroyed.

Instead it’s settling on a clear political strategy: create the space to build back better down the line without risking another military conflict.

Also notable last week: Iran’s uncharacteristic … absence. For all the noise Tehran makes about propping up a so-called “axis of resistance” to Israel, you only heard a deafening silence amidst the fanfare surrounding the Gaza ceasefire. Tehran was not party to any of the protocols or verification agreements, nor was it present at the talks in Egypt or Qatar.

Iran also wasn’t at the Gaza Peace Summit in Sharm el-Sheikh, with Foreign Minister Araghchi posting on X: “Neither President Pezeshkian nor I can engage with counterparts who have attacked the Iranian People and continue to threaten and sanction us.”

Gaming It Out

So here Tehran is – shown up in a mere twelve days by Israel and the U.S. and sidelined in Gaza, the big Middle East peace story.

What’s the possible post-Gaza roadmap for Tehran for the next few months? Here’s my take.

First, the constraints faced by Iran:

– Power: Tehran’s diplomatic margin has narrowed. With Gaza diplomacy running through Arab capitals and Washington, Tehran is absent and can’t set the agenda or timelines. Deterrence credibility took a hit too.

– Money: Revenue pressure is intensifying. Sanctions are homing in on key logistics nodes (shadow fleet, intermediaries, finance).

– Unrest: Domestic bandwidth is limited. Inflation, faltering utilities, harsh security climate. There is a limit to how far the regime can continue costly foreign adventures without a backlash.

In other words, Tehran is not in a happy place.

What might give them hope? I see the remaining arrows in Tehran’s quiver as:

– Proxies: They’re still there. Tehran can still engage tactically across Lebanon, Syria/Iraq, and Yemen, stopping short of open war, to signal its relevance, retaliate when its red lines are crossed, and bargain for relief.

– The Sea: Maritime pressure. It can still pursue limited harassment in the Gulf.

– Commodity arbitrage. They can engage in quiet swaps, including oil for goods, and use its China and Russia channels.

– Narrative politics. State media will frame Gaza’s “day after” as a resistance dividend even if Tehran isn’t a signatory, to keep domestic legitimacy afloat.

Tehran is down, but not out. The regime has recovered from heavy blows before.

So what’s the likely playbook for the coming winter and spring? Here’s what I see:

01

Be present, don’t ignite, and play sanctions judo. Presence without ignition. Tehran can keep its proxies visible but below thresholds that might invite a strong Israeli or US response. Adjust to sanctions by rotating hulls, flags, insurers and relying more on small, independent oil refineries in China and third-country brokers.

02

Selective de-escalation where it pays, with tactical diplomatic feints. Quietly accept de-escalation in one theater (Iraq/Syria, for example) and concentrate on another (Yemen or Lebanon). Float narrow, technical “openness” (for example the recent FATF/CFT steps, prisoner swaps) to complicate Western unity without conceding on the core nuclear posture.

03

Internal hardening. Maintain high-tempo prosecutions and executions in security cases to deter spillover protests, while rationing scarce resource space toward subsidies that blunt pain in key provinces.

What would shift the path?

01

Ceasefire consolidation in Gaza that produces a durable governance/aid mechanism led by Egypt-Qatar-US-EU. The more it normalizes, the less Iran can shape the outcome.

02

Effective enforcement on shadow shipping; China recalculating. If insurers, ports, and ship-to-ship transfer hubs are hit with coordinated penalties, Iran’s export volumes could decline significantly. And a quiet shift by just a few Chinese refiners or traders could quickly push Tehran to deepen discounts and strain its cashflow.

03

Domestic shock. A water or power failure in a major city or a wage/food protest spreading into a broader strike wave. Bread and butter grievances can be far more dangerous to the regime than foreign threats.

04

An ill-timed proxy strike. A lethal attack that unified a regional and Western response would require a quick recalculation.

Next week we’ll look at the longer-term scenarios for Tehran.

IRAN IN THE NEWS

Even as the region focused on the Gaza ceasefire, several developments kept Iran in the diplomatic and security spotlight elsewhere.

– Two French citizens were recently convicted of espionage in Tehran. They received lengthy prison sentences. The verdicts provoked criticism from French leaders, who described the process as unfair and suggested that Iran is using detained foreigners for political leverage. This case has further strained diplomatic relations between Iran and France.

– Microsoft released its “Microsoft Digital Defense Report 2025,” noting that “Iran is going after a wider range of targets than ever before, from the Middle East to North America, as part of broadening espionage operations. Recently, three Iranian state-affiliated actors attacked shipping and logistics firms in Europe and the Persian Gulf to gain ongoing access to sensitive commercial data, raising the possibility that Iran may be pre-positioning to have the ability to interfere with commercial shipping operations.”

– In Tehran, three young artists were picked up by security forces: Danial “Meshki,” Ardalan, and Sajjad Shahi. Officials accused them of sharing “unconventional content” on social media. Their work is known to be sharp, critical, and openly political and has now landed them in custody. It fits a wider clampdown on voices that challenge the state through art.

– The mayor of Tehran ordered the closure of places like the House of Humanities Thinkers and the office of the Journalists’ Union. This is an escalation: not only arresting creators but also limiting venues for discussion, art, and civic gatherings. Meanwhile, fifteen cafes were closed in Qods, near Tehran.

– Iranian filmmaker Jafar Panahi’s recently-released It Was Just an Accident debuted in U.S. theaters this week. The film won the Palme d’Or at Cannes this year. According to Screen Anarchy, “The thriller follows Vahid (Vahid Mobasseri), a man who is convinced he’s encountered the man who tortured him during his imprisonment by the Iranian government. But when doubt creeps in, he pulls together a ragtag band of those who claim to have endured the alleged torture. This vengeful thriller follows this group as their opinions on retribution splinter, inspired largely by Panahi’s time detained by the Iranian government.” Panahi himself was arrested, convicted and imprisoned several times by the regime.

ECONOMIC FILE

Proxy Bill Comes Due

In the wake of this year’s setbacks, Iran’s wasted return on its investment in its proxies is striking. A quick tally: $700 million annually for Hezbollah, $100 million a year to groups such as Hamas and Islamic Jihad. Syria’s Assads cost Tehran at least $16 billion between 2012 and 2018 alone. By some accounts, Iran’s support of foreign ideological allies has at times cost it $16 billion a year.

The Iranian public knows who pays the price. Nearly four in five Iranians in a 2024 survey blamed Iran’s foreign policy for the country’s economic problems. “Leave Syria, think about us,” Iranians once chanted. In Alhurra’s recent dispatch on protests, one Iranian woman asked: “What good is a nuclear weapon if we don’t have bread for dinner?”

Meanwhile, the World Bank reports that the Iranian economy will shrink by 1.7 percent in 2025 and is forecast to contract by another 2.8 percent in 2026 – a major reversal from last year’s minimal growth; in August, the inflation rate rose to 42.4 percent, only two in five adult Iranians are working, and enduring shortages wreak havoc on daily life and the economy: As Le Monde recently reported, “authorities have increasingly declared public holidays and ordered the closure of government offices to save water and electricity.”

What’s that about people clamoring to leave again?

Zero Money

In one of the surest indicators of the nosediving Iranian economy, this month the Iranian parliament passed a law to drop four zeros from the rial.

Here’s your thumbnail overview of approximate rial/USD exchange rates over time:

Yep, that’s from 70 rial to 1 USD in 1979 to over 1 million rial to 1 USD in 2025.

Of course dropping zeros is a cosmetic move with no tangible effect on inflation or any of Iran’s other financial woes. The plan is for a multi-year transition period. Not everyone is impressed. “The prestige of the national currency will not be restored by removing zeros … Our priority should be strengthening the national currency, not removing a few zeros from it,” said Iranian MP Hossein Samsami.

AND FINALLY

Eterazebazar, a popular Persian-language civil protest and satire Telegram channel, curates daily stories, viral social commentary, and protest humor from across Iran. In an Instagram post from the Eterazabazaar account this week, entitled “Isfahan Clothing Market; Quiet and silent in the shade and recession,” accompanied by a photo of an empty stall, we read that the market, which “was once alive with the smell of cloth and the sound of a sewing wheel, has today become a silent and soulless place … Shopkeepers spend their day with half-cold tea behind empty customer windows. Severe clothing inflation, the vulgar disparity between shopkeepers and supermarket prices, and the poor purchasing power of people have driven markets into an unprecedented recession.”