Military resilience has not resolved Iran’s structural economic weaknesses. In this interview, Nicola Pedde examines the future of Hormuz Strait negotiations, Tehran’s strategic calculations and the role of China and Russia.
Iran-US negotiations: the Strait of Hormuz at the heart of the talks, interview with Nicola Pedde
Iran and the United States remain locked in a complex geopolitical standoff, with the future of the Hormuz Strait negotiations closely tied to Iran’s economic resilience and strategic priorities. In this interview with Rinnovabili, Nicola Pedde, Director of the Institute for Global Studies, explains why Tehran’s internal political dynamics, the interpretation of the recent memorandum and the balance of power in the region will determine whether diplomacy can still prevail.
Dr Pedde, is Tehran pushing its leverage too far? If it continues to increase pressure, could it end up losing its strategic advantage? Has it already gone too far?
Assessing the country’s economic resilience is difficult because Iran has undoubtedly demonstrated considerable military resilience. It has managed to sustain the conflict through the use of asymmetric weapons, particularly missiles and drones. However, this does not solve the Islamic Republic’s underlying problems, which are fundamentally economic. As for oil, Tehran claims it has maintained its export capacity, traditionally through operations that often border on smuggling.
What we are witnessing is the urgency among certain political figures to finalise an agreement between Iran and the United States. This is particularly evident among traditional conservative factions, the group most concerned about the country’s economic conditions. The problem is that Iran is governed by the ultraconservatives, who represent a minority within the broader conservative camp but effectively control power through Parliament and the Supreme National Security Council. This faction places less importance on the economy because it sees the conflict as an existential threat. In other words, if a satisfactory agreement cannot be reached on its own terms, it would rather continue the conflict. This makes managing the current crisis extremely complicated.
How far are Iran and the United States from reaching an agreement on transit through the Strait of Hormuz?
In theory, they already have a foundation on which to build a future framework, namely the memorandum.
The problem is that the memorandum was drafted very quickly, largely because of the United States’ urgency to exit the conflict. As a result, many issues were left deliberately vague, and the unresolved questions surfaced almost immediately. The first concerns Hormuz. Iran and the United States have fundamentally different interpretations of Article 5. For Iran, Article 5 means suspending the conditions created by the war while maintaining control and sovereignty over the Strait of Hormuz. Under this interpretation, Iran would temporarily waive transit fees.
For the United States, however, Article 5 means restoring the status quo, namely freedom of navigation. This divergence immediately triggered a series of regional security consequences, leading to renewed escalation. On the one hand, both parties genuinely want to reach an agreement. On the other, any agreement must be presented domestically by both sides as a political victory. From the US perspective, allowing Iran to emerge from the war claiming victory through an agreement is currently a very difficult political proposition.
Have the renewed hostilities effectively ended last month’s memorandum?
Most observers consider the memorandum to be effectively dead. At the same time, however, both the United States and Iran continue to insist that there is still room for negotiations. The memorandum remains the only existing framework from which discussions can resume. Therefore, if conditions allow talks to restart, it is reasonable to expect that the memorandum will provide the basis for future negotiations.
How strategically important has the energy partnership between Iran and China become? And how has it changed since the war?
It is undoubtedly essential for Iran. China is the largest buyer of products from Iran’s oil industry, both crude oil and refined products. The conflict has disrupted these flows, reducing the volumes China is able to import and, consequently, diminishing the benefits of the relationship.
Should an agreement eventually be reached and the provisions contained in the memorandum be implemented, including the partial lifting of sanctions on hydrocarbon exports and refined products, Iran would be able to significantly broaden its pool of economic partners. Tehran would no longer need to offer the substantial discounts currently granted to China, which has effectively become its only customer. As a result, China’s relative importance would decline.
Does this energy partnership also translate into political support from China? To what extent, given that Beijing would never intervene militarily on Iran’s behalf?
China supports Iran while condemning the conflict. Beijing has global interests that require a pragmatic approach to its relationship with Tehran. China would never go to war to defend Iran. It expresses political support for the government of the Islamic Republic, but that support does not extend beyond China’s broader strategic interests, particularly its relationship with the United States.
Despite tensions in many areas, relations between China and the United States remain deep, both economically and politically. If you weigh China’s relationship with the United States against its relationship with Iran, there is simply no comparison. It is therefore clear that Beijing would never jeopardise ties with other major partners, above all the United States, solely to defend Tehran on principle.
Are Iran and Russia partners or competitors in the energy sector? Where do they cooperate, and where do they compete?
In the energy sector they are essentially competitors, although they also belong to the same framework, OPEC+. Within that system they frequently disagree over production quotas. Nevertheless, Moscow and Tehran remain members of the same grouping.
Politically and strategically, Iran and Russia are much closer because they share common rivals and common adversaries. However, there has never been a broad strategic alliance between them. Their relationship has always resembled a marriage of convenience more than a genuine partnership. One only needs to look at bilateral trade. Trade has increased because Iran’s options for economic partners have narrowed, but it has never developed into anything truly significant.
