U.S. Vice President JD Vance is touting success out of the latest round of talks in Switzerland focused on seeking a permanent end to the war in Iran. But despite his description of a “very, very good day” of negotiations on Sunday, Iran is denying that it has made any new agreements. It’s more of the same inconsistent messaging the world has become accustomed to over the past three months since the U.S. and Israel launched attacks intended to eliminate Iran’s nuclear program.
Since that time, Iran's supreme leader was killed, the Strait of Hormuz was shuttered and the world has witnessed the largest oil-supply disruption on record.
Now, the United States and Iran are working from a 14-point memorandum of understanding that was signed on June 17, meant to bring the conflict to a formal close within the next 60 days. But will it work and what does Iran stand to gain in the interim?
Cipher Brief CEO & Publisher Suzanne Kelly spoke with former National Intelligence Manager for Iran Norman Roule - who travels regularly to the region for meetings with high-level officials - about what Iran really wants, the impact that a slow-moving and fragile negotiation process could have on near-term energy markets and the tools Iran still has left in its arsenal.
Our conversation has been edited for length. You can watch the full conversation on The Cipher Brief’s YouTube channel.
THE INTERVIEW
Kelly: What does Iran need from this current round of talks?
Roule: Tehran has a new government that needs to prove that it is strong, stable and capable of standing up to its adversaries. And that means upfront, that it can't be perceived as weak, or caving to the United States. Like it or not, the new Supreme Leader cannot sign off on a document that makes him look weak. And if you wish to have diplomatic progress, you're going to have to swallow the fact that a document's going to have to look like something the Iranians can leak and put out publicly and say, ‘we achieved this’. And that just gets you in the room.
The second point is that we're talking about issues that are existential for the regime itself, though not existential for Iran. The country's not going to evaporate. But for the regime, its role with militias in the region, revolution, power projection, keeping down the nationwide unrest - it needs financial relief, it needs to be able to sustain its proxies, it needs to be able to push back on Western military presence in the region. It's negotiating on life and death issues, so it's not going to make any fast decisions.
On the Iranian side, their point is, ‘if we give up a nuclear program, we're giving up our leverage forever’. Sanctions relief is something they need now to sustain the government's survival. They’re not going to give up on the proxies in the region and allow Israel to have a victory. These are real issues in their world, and the administration is just stuck with that reality.
Kelly: How are you looking at U.S. - Israel relationship right now and how significant is the Lebanon issue to reaching any kind of final agreement between the U.S. and Iran?
Roule: This is profoundly complicated. It is as complicated and as consequential as the Strait of Hormuz has been in the actual conflict itself. So let's break this into a couple of pieces.
We now have, as has been predicted for almost two decades, a Revolutionary Guard-dominated government in Iran. There's never been any surprise that the government of Iran would move into a military-dominated government. This war did not produce something that wouldn't have happened by any reasonable analyst’s projection. There was never going to be a reform or moderate government in Iran, period. But that type of military government is going to use two types of tools; military and asymmetric tools.
We've destroyed their entire military. They now have only asymmetric tools left, which they have relied upon for their entire history going back to the 1980s. What are Iran's asymmetric tools? Missiles, mines, drones, cyber tools, and proxies.
The previous government did not defend the proxies when they were attacked by Israel, and the proxies were heavily damaged. That would not have been a choice of the Revolutionary Guard, which is now dominating decision making.
One of the first decisions this government communicated when they talked about the war, that was repeated by President Pezeshkian, and repeated by Javad Zarif in his foreign affairs document was, ‘We're standing up for Lebanon’. Now remember, the Lebanese government, the Lebanese president has said, Iran, we want none of you here. In fact, they've tried to throw out the Iranian ambassador, and he won't leave. That's a very strange situation.
The Iranian government is in essence, is saying, ‘We have a role in protecting our proxies in the region’. Lebanese Hezbollah is only one part of this. There will be no difference between Lebanese Hezbollah, Iraqi Hezbollah and the Houthis. So by doing this, Iran is, in essence, showing power projection and its role in sustaining its proxies.
Now here's the problem. The deal was signed by Iran and the United States, but we're holding Israel accountable to live up to this agreement. Now from the Israeli perspective, they're dealing with Iran, a country that does write, "Death to Israel," in perfect Hebrew on its missiles - and they have a very different political and operational paradigm. But in fairness, they have Hezbollah that does shoot into their country. They have thousands of civilians who have had to move, and their position is that they have to defend themselves.
The question becomes, ‘Is there a Goldilocks zone where their defense can be conducted in a way that doesn't upset a diplomatic apple cart on our side?’ And the Iranians, in essence, can then control the entire process by saying, ‘We're not going to cooperate unless Lebanon is part of this’. So what they're trying to do is not only retain power in the region, but they could use this process to push the United States and Israel into friction against each other, and it has been working.
So what does this mean? This means that a Hezbollah captain or a sergeant - can fire some rockets into Tiberias, or some other Israeli city, kill people, which has happened in the last week and the Israelis respond against that position or other positions - and they have a position of non-proportional response to say, ‘You hit us, we'll hit you bigger so you don't do it again’.
The Iranians then say, ‘What are you going to do? The Israelis are killing civilians’, which has happened in Lebanon.
So now there is intense diplomacy behind the scenes. There's criticism from the United States for the first time, in a very loud way, against Israel, and there is tension. And not for the first time. We had former President Ronald Reagan, we had former President George Bush criticize the Israelis in the past. This administration will absolutely defend Israel and ensure it gets the weaponry it needs to defend itself, but you're seeing political tensions that Iran has been able to manipulate.
I would say it's a mistake to allow Iran any voice in Lebanon. And the international community, including the Arab world, has not done enough to say, ‘Iran, you have no role here. Go away.’ And at the same time, because we failed to do that, just as we failed to dominate the Strait of Hormuz early on, we're going to have some terrific consequences that perhaps may even compromise the success of this diplomatic initiative.
Kelly: I do want to focus on the Strait of Hormuz for a few minutes. There are some competing narratives out there in the energy markets on the near-term supply of oil. How are you looking at the near term oil supply given that we don't really have an agreement yet and it's very difficult for anyone to predict when we might?
Roule: We have to break this into pieces. What we've seen in the last few weeks has been an increase in traffic through the Strait of Hormuz rather than through the Oman side, an informal arrangement with the United States and a number of shippers, and that has reduced pressure on oil markets.
The fact that the Chinese have reduced their purchases has also had a significant impact on oil markets. In the wake of this agreement, we've seen a short spike in the amount of shipping and we've seen gas vessels go into the Gulf to reload, which is important. We've seen movement from multiple ships.
However, this is nowhere near enough. You, in essence, have three different dynamics taking place.
First, the Strait of Hormuz remains mined, and it will take some time to demine this, although less time for us to clear a lane and to say that lane is clear. Insurance companies and shippers are going to seek a certificate or some sort of statement by a world navy to say this lane is clear and it's safe, and then to see a number of ships move through it, and that will cause rates to go down.
Right now, there actually aren't that many ships available to move non-state oil through the Strait of Hormuz. So you haven't seen as much oil go out. And then whenever there's a spike in tension, such as we've seen with Lebanon, you actually see shipping drop. So we've seen shipping drop overnight.
Now once oil comes out, the world will see a lot of oil, prices will drop, and we've seen the market do this. There are a couple of problems though.
We've drawn down enormously on our world's stockpiles. If prices are a little high here, they're much higher in Asia. We've had rationing, governments have shut down, factories have shut down some of the processing in these countries. These countries are going to have to rebuild their stockpiles.
So strangely, as the oil increases in its quantity, we may actually see prices go up a bit as they try to absorb this oil and rebuild those stockpiles. Plus this 60-day ceasefire does not look like it's going to be very successful at present, which means you're going to see countries say, ‘I need to build more faster to get those stockpiles up. Right now, let's not put this oil out there.’
So in the short term, prices are going to come down. They’ll stay in the 80s right now, maybe high 70s. In the longer term, you're probably going to see a bump up. As I've said for a while, late June - July is going to be a tense point. A $10-ish premium is probably going to be likely for a while as countries think of security, stockpile requirements and additional pipeline construction.
Once you get into 2027, you start getting into the possibility of a glut. I would be a little careful at that point because, yes, a glut is possible. But this does depend upon China not purchasing a lot more. This does depend upon continued stability and geopolitics. This does depend upon the international community not picking up its purchases and in the United States continuing to produce at a high level.
So maybe in a few sentences, Short term: prices will continue to go down. Medium term: we shouldn't be surprised if there's a bump up because of stockpile replenishment. A glut in '27 is possible, but we should be careful about saying that it's guaranteed.
Kelly: I'm always asking you what the rest of us aren't focusing on - that you are. I'm curious about the Iraqi militias and the attacks on the GCC countries. How are you viewing the importance and the significance of this and what do you think needs to be done to keep monitoring this?
Roule: It's a story that has not received sufficient attention. There were multiple strikes by Iraqi militias on the GCC during this conflict. There were multiple strikes by Iraqi militias on Iraq during this conflict. The Iraqi militias are clearly trained, and to a sufficiently large extent, under the control of the IRGC.
The United States has invited the new Iraqi leader to Washington. He is a compromised candidate so he is more acceptable than the more pro-Iranian candidate in the past, but he is still acceptable to the pro-Iranian camp within Iraq itself. The administration has sanctioned, I think, the deputy Iraqi minister of energy. And they're going to no doubt continue to pressure Iraq to cut and reduce its ties to Iran's energy sphere and to increase ties to the GCC.
For the GCC, they need to build pipelines and energy connections into Europe through Iraq, but they can't do that through territory that's under the political and security threat of Iraqi militias and indirectly - Iran. It's billions of dollars of capital that's at risk and their energy futures. If Iran can cut the Strait, then Iran can cut the pipelines going north.
So you're going to see a lot of diplomatic and political pressure on the Iraqi government that, frankly, the people in Washington and other places are looking at in a very adult fashion. They know he's in a difficult and delicate political position, but he's going to have to make some hard moves as well. We cannot have Iraqi militias launching missiles on UAE, Saudi Arabia, let alone Israel, competing with potentially Houthis and the Iranians.
And I want to pull this thread just a little bit because of the Revolutionary Guard. We are in a situation now where red lines have been erased.
The red lines of the IRGC using all of its asymmetrical tools, missiles, mines, cyber, militias against everybody all at once, that red line has gone away. So the idea that Iraqi militias won't be used in the future, along with Iranian missiles and cyber, against Saudi Arabia again or Kuwait or Bahrain, that red line doesn't exist. So the Gulf cannot tolerate this perennial weakness in its north as well as in the Houthi south as well as in the east. There's just too much instability. It's too much of a contested region. So Washington will probably put a lot more focus on that.
The other area that I would think there needs to be a little more attention on is the data risk within the region itself. The fiber lines that go through the Red Sea and the Strait of Hormuz contain an enormous amount of financial information, not just from the GCC itself to Asia, but it is also European data flowing between Europe and Asia.
And we've seen the Houthis when they damaged a ship, it had an anchor that damaged several lines that cut some of that data flow for a while but the Iranians are now claiming ownership, and it's fallen out of the news but when it comes to the data line management in the strait of Hormuz - only Iranian companies can repair or manage those lines.
This gives them not only a capacity to control the energy flow and the product but the artificial intelligence flow as well, which the GCC sees as its future to Asia and India and Pakistan - I mean, this is the world. So a GCC that has said, ‘Our future is artificial intelligence and not energy,’ Iran has just said, ‘We will control that future’.
Kelly: The Cipher Brief focuses a lot on gray zone operations and a lot of these undersea cables fall squarely into that category. I wonder if we could talk for just a moment about what Iran is most likely to do during this period of time, What are they doing that they're not talking about?
Roule: The Quds Force has never gone away. Whenever anyone talks about something, one of the foolish phrases of Iran's forward defense, you will often hear people talk about something silly like this, Iran doesn't need drones in the hands of Iraqi militias as a defense. It doesn't need to provide missiles to the Houthis to attack Western shipping as a defense. I mean, anything that someone uses to attack could theoretically be a defense, but the Iranians only call it a defense. And that phrase was originally a propaganda point issued by Iran's foreign ministry and then used by Western shills and then gradually built up into some western think tank narratives. But it's a funny phrase. But you're going to see Iran continue to push out on their asymmetric activities because the Quds Force hasn't gone away, and it's pretty much all they have left. And the Quds Force, to a lesser extent - Iran's Ministry of Intelligence - manages their tools.
So you wisely and eloquently talked about gray zone activities. Iran is - far more than China and far more than Russia - the archtypical gray zone actor. These other countries that have non-gray zone tools and are recognized as non-gray zone powers in the world, but all three are revisionist actors in the world - the three great revisionist actors trying to revise their place in the international community. But Iran only has gray zone tools left because we just destroyed all of their conventional military.
So the Quds Force remains. Any sanctions relief, a small portion of that will go there. The question becomes, ‘What are we doing to cut the logistics lines and what is the international community doing?’ And whenever anyone talks about aid to Iran or assistance to Iran or anything like that, it is not unfair to ask, ‘What are we doing to cut that or how are we measuring Iran's capacity to pull back on the Quds Force?’
If you're in the Trump administration right now, your challenge in the talks going forward is to show that the talks are narrow, reversible, measurable in some way - to show that you're not just providing Iran with the liquidity that Iran and critics of the Memorandum of Understanding will argue it gives. And in return, you're getting something back besides the opening of the Strait of Hormuz. And that something will have to be shown to take place in a few weeks because you can't really do that by day 59 and then say on day 59, ‘We're going to war’.
I'll close by saying that this administration reportedly is saying that there are individuals in the regime who are saying, or telling others, ‘We're willing to move in that direction in exchange for a massive amount of money’. Okay, fine. We'll see. But they're going to have to show measurable examples to prove why something that everyone would say has not been possible for 50 years is going to be remotely possible, and that's going to be hard.
Kelly: Let me close, Norm, by asking you the impossible question. Given how difficult it has been until now and given that you have a very good understanding of the agendas of all sides in this conflict and others who are being affected by this, what do you think a realistic expectation that we will see any kind of measurable progress?
Roule: If the Iranians are able to only create tensions between Washington and Tel Aviv, I think it's manageable, but the rhetoric will be magnified by the press and people who dislike the Trump administration and Israel will magnify that. I don't pay as much attention to that as others because of the politics, but there is a good reason to focus on that.
The likelihood of going back into conflict will depend upon perhaps catastrophic events. I worry about a Hezbollah missile landing and having a large number of casualties in Israel. That creates a gravity sink of actions. Or an Israeli attack doing the same thing, and that could create a gravity sink, or behaviors and political actions that just take us back into a new direction.
Again, the Quds Force has not gone away. That logistics line, all we get is one large shipment of weapons going to Yemen, one large shipment and suddenly something happens. But it could be that we're just in a period of new normal where what we're doing right now might be where we are in July and August and September. People may not like it, but we have been in this position for a number of decades, and we're waiting for the rot within the Iranian regime, which remains a dying regime. It's a stale ideology and a dying regime. That rot will continue to erode the foundations of what's happening there.
I’ll close by saying that we shouldn't overlook the tremendous damage that has been done to the regime during this conflict. It has sometimes been wrongly described as tactical success by the regime. That's terribly wrong. You don't destroy this much of a regime and call it a tactical success. The Iranian government is going to have to try to recover from that, and the brave Iranian people may well rise up in coming months. So there are a lot of ‘What ifs’, but where we are is probably the trend line - barring a catastrophic event of some sort.
Ryan Simons was a producer on this report
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