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The preliminary peace agreement between the United States and Iran, a broad framework still taking shape in early rounds of talks, hands Iran's leadership a major economic lifeline as Tehran looks to consolidate strategic gains after months of war with Israel and the United States.
Sanctions waivers that allow Iran to sell oil in U.S. dollars and commitments to unfreeze Iranian assets could grant Iran's government access to billions of dollars in desperately needed hard currency. Having survived mostly intact despite devastating assassinations throughout its ranks, the Iranian system must now address widespread damage and destruction. Even before the war, the country's spiraling economic crisis was the driving source of domestic discontent.
But critics of the deal argue the relief will ultimately allow Iran to rebuild its military and support allied armed groups, such as Hezbollah in Lebanon. The Trump administration says it is requiring Iran spend some of its unfrozen assets buying food from U.S. farmers, but Tehran's oil revenue is not similarly restricted.
In the wake of war with two of the most powerful militaries, the Iranian system entered peace talks with the United States emboldened and has used the negotiations to secure critical concessions from economic aid, formalization of Iran's control over the crucial Strait of Hormuz and a say in the conflict between Israel and Hezbollah in Lebanon.
Trump administration officials say the deal is "performance based" and most of the economic incentives demand Iran comply with the terms of the initial agreement, including that it open the Strait of Hormuz and allow nuclear inspections.
"For Iran to benefit long-term, it has to achieve a final deal with the United States," said a U.S. official who spoke on the condition of anonymity under ground rules set by the White House. "We can simply rescind waivers and restore pressure if Iran fails to implement its commitments. The waiver does not diminish our leverage, it strengthens it," the official said.
Tehran has surged oil into international markets since the agreement came into force last week, exporting more than 40 million barrels, much of it the crude that had built up in storage during the U.S. blockade, according to Tankertrackers.com, a maritime tracking firm. Once Iranian exports recover and stabilize, Tehran is expected to export 1.6 to 1.7 million barrels per day in the coming weeks, according to Gregory Brew, an Iran and energy markets analyst for the Eurasia Group, a New York-based political risk consultancy. That export rate would mean some $8 or $9 billion in oil revenue over the next two months, Brew said.
Iran "will be earning quite a lot of hard currency from these sales and in practice this money is going to be fungible," said Brew: In practice, Tehran would be able to spend it on whatever it wants, from its own military to proxy forces. But in the short term, Brew said he doesn't believe the money would be a windfall for Iran's security establishment. The country's economic and reconstruction needs are so great, he said, Tehran will be forced to allocate cash to rebuilding.
Postwar reconstruction could cost Iran around $300 billion, by some estimates. U.S. and Israeli airstrikes damaged or destroyed thousands of structures, including factories, roads, bridges, research facilities and fuel depots.
Over the course of the 60-day negotiation period laid out in the agreement, Iran's total economic gain could be around $30 billion, including from oil sales and unfrozen assets, according to Esfandyar Batmanghelidj, the chief executive of the Bourse & Bazaar Foundation, a London-based think tank that tracks Iran's economy.
Iranian President Masoud Pezeshkian said this week the United States would unfreeze $6 billion in Qatar. Another $4 billion in the United Arab Emirates is set to be unfrozen, according to a Reuters report that the UAE denied. The White House has not said how much of Iran's assets will be released, but during earlier round of talks, Iranian officials said the demand was $24 billion.
Batmanghelidj wrote this week that the estimated gain for Iran "only sounds like a lot because people tend not to understand how big an economy Iran has. $30 billion is less than 6-months of Iran's normal import bill."
"What happens in the next 60 days will not change the fortunes of Iran's economy. But Iran's leaders know that. They are pursuing a deal because they believe there is a potential for long-term transformation," he said.
The agreement also proposes a $300 billion investment fund for the "reconstruction economic development" of Iran backed by the Persian Gulf monarchies. The deal states that the fund's "mechanism for implementation" will be decided over the course of the 60-day talks with the United States.
When Vice President JD Vance spoke to reporters ahead of the first meeting in Switzerland last weekend, he said the negotiations to end the war also had the power to usher in dramatic change for Iran and the region. Vance said the deal offered the opportunity to "turn over a new leaf," and "fundamentally transform" the U.S.-Iran relationship as long as Iran ceased "being a driver of regional instability" and was "willing to give up nuclear ambitions for the long term."
Economic discontent was a major factor behind mass protests earlier this year, to which Tehran responded with a violent crackdown. Early in the war, the Trump administration urged Iranians to overthrow their government amid U.S.-Israeli strikes targeting leadership. But Iranians who have spoken with The Washington Post in recent weeks say their government and its security forces appear to have emerged from the war with a tighter grip on power.
The extent of Iran's agreed concessions remains unclear. Hours before the Treasury announcement, Vance said Iran agreed to nuclear inspections, but Iranian officials have since denied that.
Under the agreement, the central ask of Iran was to reopen the Strait of Hormuz and since the deal was announced traffic has increased. Since last week, ship tracking firm Kpler has observed 20 to 70 vessel crossings per day, up from five to 10 before the deal, but still less than prewar levels when more than 100 vessels transited each day.
But the agreement, including the Hormuz portion, remains tenuous: Iran attacked a cargo ship in the strait Thursday, in what President Donald Trump called a "foolish violation" of the preliminary deal.
In some ways, the general license issued Monday goes further than the relief granted to Iran under the Obama administration's nuclear deal, the Joint Comprehensive Plan of Action, according to Richard Nephew, one of the negotiators on that deal, now a senior research scholar at Columbia University's Center on Global Energy Policy.
The Trump administration appears motivated in part by a desire to ensure the U.S. economy benefits, he said, as economic incentives are delivered to Iran.
The U.S. official said it serves U.S. interests "to get as much oil onto the market as we possibly can" to refill U.S. and global stocks and drive down prices.
But that does not explain why the U.S. gave so much for relatively few Iranian commitments on the nuclear file, Nephew said.
The Trump administration could have been looking for a way to rebuild trust for future talks, he said. "If you're trying to convince the Iranians that we're serious about doing the deal, it's not the worst idea to lean forward," to demonstrate seriousness by giving up more up-front than is necessary, he said. "I could see that as an argument, but the reality is that this is pretty concessional."
Big economic incentives are critical for Iran's leadership domestically, according to Alex Vatanka, the founding director of the Iran program at the Middle East Institute, a Washington think tank.
Ultra-hard-liners in Iran are against any kind of engagement with the United States and since the deal was signed, a handful of protests have broken out denouncing the talks.
For some Iranians, even engaging in the talks, especially before Iran has had the opportunity to bury Ayatollah Ali Khamenei, the nation's late supreme leader, was a major concession that signals just how badly Tehran needs economic relief, Vatanka said.
"They needed to sit down with the devil himself - in this case Trump from their perspective - not because they like Trump, but because the survival of the regime is best secured through the deal," he said.
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