Iran Conflict Brief: Will the Ceasefire Hold? Analyzing Tehran's High-Stakes Diplomacy

**Daniel Sternoff** (0:01)
Events in the Middle East are changing quickly, and the complexities of understanding the global energy landscape grow deeper by the hour. Join me as we talk to leading experts on the latest developments in the region and what it means for the rest of the world.
Welcome to our rapid response series, the Iran Conflict Brief, a special edition of the Columbia Energy Exchange podcast. I'm Daniel Sternoff, a senior fellow at the Center on Global Energy Policy.
Good morning. We are recording this podcast on Thursday, April 16th at 10:30 a.m. in Washington, DC., 6 p.m. in Tehran, and 6.3 and 5:30 p.m. respectively in Abu Dhabi and Riyadh. The Middle East is suspended between war and peace. Regional mediators are scrambling to set up a second round of U.S.-Iran talks before a two-week ceasefire expires on Tuesday, April 21, hoping to at least narrow gaps over nuclear issues and the Strait of Hormuz to enable another extension of the ceasefire to buy more time to negotiate a more lasting truce.
The United States is moving to enforce a blockade of Iranian ports, trying to take away Iran's leverage over energy flows through the Strait of Hormuz by blocking Iran's own oil exports. The Islamic Republic's response to a potentially existential threat has been to hold its Gulf neighbors and world energy flows hostage. The United States has responded with a double hostage-taking.
Benchmark Brent crude oil prices have fallen to $96 a barrel, well off wartime peaks around $120 per barrel, as futures traders bet the conflict is heading for an off-ramp. The prices in physical crude markets are trading $20 to $40 a barrel higher than futures, and the physical reality over the last week has only grown more acute. Some 1.5 million barrels per day of Iranian flows that continued through 40 days of war are being disrupted by the US blockade, raising the war's total disruption to 14 to 14.5 million barrels per day of crude oil and oil products, and of course roughly 20% of world LNG supply remains offline. It is virtually impossible for the US and Iran to bridge all gaps over transit through Hormuz or Iranian enrichment in the next 6 days, and buying more time for negotiations is a race of relative pain thresholds. How long can an already economically battered Iran sustain the loss of nearly all oil revenues, or be forced to shut in production? And how long can a world economy burning through oil inventories sustain the largest oil disruption in history? Financial markets are trying to trade to the end of a war that isn't over, and which may not end with a return to the pre-war status quo, but may settle back into an uncomfortable war between the wars. I am joined today by Mohammad Ali Shabani, the leading voice on the intersection of Iranian domestic politics and regional diplomacy. He is the editor of Amwaj Media, a prominent platform providing high-level analysis of the Persian Gulf. A veteran journalist and researcher, he has previously served as the Iran editor for AllMonitor, and is a frequent contributor to major international outlets and policy forums, offering deep insight into the power dynamics of the Middle East. Good afternoon, Mohammad.

**Mohammad Ali Shabani** (3:22)
Thank you for having me.

**Daniel Sternoff** (3:24)
Thank you for joining us.
Mohammad, let me start with your assessment of how decisions are being made in Iran. So we often hear two narratives. So the first, I'm quoting a Wall Street Journal article this week, is that, quote, Iran's hardliners, anti-Western ideologues with no tolerance for domestic dissent, have always had a place in the country's overlapping and competing circles of power, but their influence rising under the patronage of the Elder Khamenei. But they now dominate Iran's political and military leadership, energized by a war that many of them believe presages the return of a Shiite Muslim messiah. A second view is that Iran's already fragile economy has been further weakened. We've heard the central bank chief and technocrat reformists around President Pesachian publicly warn the IRGC that without a deal with the US and a reopening of the internet, the country will crash into a wall. How do you think these tensions are affecting decisions within the Iranian leadership right now?

**Mohammad Ali Shabani** (4:23)
Iran, as a state, is quite institutionalized. The decision-making on major issues to do with national security, foreign policy, even domestic policy has its channel through something called the Supreme National Security Council. It's an entity that brings together the civilian and military leadership of the country. It's nominally headed by the president, although the secretary has a very important role in convening it and coordinating among its members.
After the previous war on Iran last June, the 12th day of war by Israel and the US, we saw the emergence of something called the Supreme Defense Council.