The Islamic Republic: at a Crossroads

Armin Seif, Europe-Middle East Council on Global Affairs; Oxford University

The Islamic Republic of Iran is confronting one of the most precarious moments in its almost half-century history. A coordinated military intervention by the United States and Israel has dealt a significant setback to Tehran’s strategic position, unravelling key elements of its deterrence architecture and shattering long-held illusions of invulnerability. Iran’s regional posture is in retreat, its alliances are under strain, and its nuclear leverage has been dramatically diminished. Yet, despite isolation abroad and instability domestically, the regime’s grip on power remains firm—for now.

The recent strikes on Iran’s nuclear facilities at Natanz, Fordow, and Isfahan have substantially weakened the Islamic Republic’s most valuable bargaining chip. While the full scope of the damage remains to be determined, analysts agree that the enrichment hubs and logistical arteries have been severely degraded. For decades, Tehran employed nuclear brinkmanship as a means to project strength, extract diplomatic concessions, and shield itself from conventional military threats. That playbook is no longer viable.

Although direct hostilities have temporarily ceased, a new phase of the conflict has begun—one defined less by missiles and more by competing narratives and calibrated signalling. The Trump administration, under pressure from a Pentagon leak and unverified revelations of a still-undestroyed underground facility near Natanz, has framed the strikes as a decisive victory. The Islamic Republic’s Foreign Ministry, in a rare moment of complete candour, has publicly acknowledged the scale of the destruction—not to concede defeat, but most probably to deter further attacks and rationalise its decision to restrict cooperation with the International Atomic Energy Agency (IAEA), which it accuses of complicity.

Meanwhile, Supreme Leader Ali Khamenei has declared a resounding victory despite overwhelming evidence to the contrary, clinging to symbolic narratives in the face of tangible losses. Iran’s broader regional influence is also in visible decline. The collapse of Bashar al-Assad’s regime in Syria—long a cornerstone of Tehran’s regional axis—has significantly disrupted Iranian supply lines and proxy networks. The operational degradation of Hamas’s and Hezbollah’s capabilities in Gaza and Lebanon has impaired Iran’s ability to pursue its hegemonic ambitions. Add to this the exposure of critical limitations in Iran’s missile systems—once touted as the backbone of its deterrence—and a picture emerges of a regime increasingly cornered on all fronts.

Following the U.S. strikes, the Islamic Revolutionary Guard Corps (IRGC), facing a leadership reshuffle after high-profile Israeli assassinations, opted for symbolic retaliation, firing missiles at a U.S. base in Qatar. The move, while dramatic for a moment, was carefully calibrated and communicated, as Tehran understood that further escalation would risk a larger response. It revealed not confidence, but strategic exposure—an effort to demonstrate resolve without crossing Washington's red lines.

Israel, too, remains poised to act. Though its campaign—dubbed Operation Rising Lion—had to pause due to Trump pushing through a ceasefire, officials in Jerusalem have signalled that further military hostilities will likely reignite military operations. The original Israeli objective of dismantling Iran’s nuclear and missile programmes could then possibly be expanded to a broader campaign aimed at regime destabilisation. Prime Minister Netanyahu has publicly signalled openness to regime change as a possible outcome. While President Trump has backed away from that position in official statements, it remains an option under consideration—adding another layer of unpredictability to an already volatile theatre.

The ceasefire that currently holds is both fragile and partial. It covers only overt military operations, leaving intact the shadow war of cyberattacks, sabotage, and assassinations. In this grey zone, all sides are recalibrating. For Tehran, the stark choice offers little room to manoeuvre: pursue a path of normalisation with Washington and détente with Israel—or double down on ideological confrontation. Almost five decades of revolutionary doctrine favour the latter, but the strategic environment has fundamentally changed. Iran’s airspace is no longer in its control and could be rapidly seized by Israeli F-35s, which face no credible opposition from Iran’s air defences; and planning for a renewed military campaign is undoubtedly on the table.

Diplomatically, Tehran is more isolated than at any point since the 1980s. Europe’s long-standing policy of cautious engagement—sometimes indistinguishable from appeasement—has largely collapsed. Germany, under Chancellor Friedrich Merz, has hardened its rhetoric, while the United Kingdom has reaffirmed its strategic alignment with Washington. European leaders, still primarily concerned with terrorism, energy security, and refugee flows, find themselves reacting to events increasingly defined by military dynamics rather than shaping them.

Even Iran’s long-standing partners are recalibrating. Qatar, despite deep economic and diplomatic ties with Tehran, now finds itself exposed, as demonstrated when Iranian missiles struck a U.S. base on Qatari soil. Meanwhile, Moscow and Beijing—long-standing critics of U.S. interventionism—have offered Tehran rhetorical support but little else. Neither is prepared to provide significant military assistance. Their overriding interest is maintaining regional stability as they expand ties with Arab nations—a major, though not exclusive, reason for opposing a nuclear Iran.

To keep China engaged while avoiding escalation, the United States has quietly offered a temporary carve-out: Iranian crude sales to China will be tolerated, at least for now. This concession is carefully calibrated—an incentive that aims to bring Tehran to the negotiating table without signalling weakness. It also serves a more immediate purpose: reducing the risk that the IRGC will respond asymmetrically by closing the Strait of Hormuz, through which roughly 20 per cent of global oil and gas passes.

Domestically, the regime remains in control—but only just. The Islamic Republic has spent decades constructing a sprawling internal security state capable of suppressing dissent through surveillance, propaganda, and a coercive state apparatus. Yet cracks are beginning to show. Israeli intelligence operations and drone strikes inside Iran have shattered the perception of absolute regime control, revealing startling lapses in security. Supreme Leader Khamenei, notably in hiding since the strikes, has delegated portions of his authority to the Supreme National Security Council and the presidency, who agreed to the ceasefire. During his absence from public view, the political landscape is likely to shift in ways that could reshape the balance of power. His recent statements, emphasising Iranian nationalism over the usual pan-Islamic rhetoric, suggest a regime seeking to consolidate internal legitimacy amid growing dissatisfaction.

Repression still remains the regime’s instinctive response. Hundreds of arrests have taken place in days, and several individuals suspected of espionage have been executed. State media, with bomb-scarred facilities, continues to broadcast triumphalist narratives in an effort to project dominance. But beneath the surface, the socio-economic fabric is fraying. Inflation is surging, public sector wages remain unpaid, banks are facing liquidity crises, and rationing—unseen since the darkest days of the Iran-Iraq War—has quietly returned.

And yet, history cautions against premature obituaries. The Islamic Republic is a master of survival, having endured war, sanctions, uprisings, and diplomatic isolation before. Its leadership, often strategically irrational, rarely commits tactical blunders. That blend of ideological rigidity and adaptive realism has allowed it to endure crises that would have toppled less resilient regimes.

But this time, the level of uncertainty is unprecedented. Israel appears prepared to pursue its strategic objectives regardless of the risks. The United States has shown a new willingness to use force—not merely to contain Iran but to reshape its trajectory. The taboo against discussing regime change has been lifted in Washington, Jerusalem, and parts of Europe, although the preferred course of action, given the complexity and potential consequences, still seems to favour altering the regime's behaviour over outright overthrow. Whether this moment marks the beginning of a prolonged contest or the prelude to rapid internal collapse remains impossible to predict. The fall of the Assad regime in Syria—once seen as immovable—is a reminder of how quickly authoritarian systems can unravel, and how far-reaching the consequences can be.

The Islamic Republic is cornered, isolated, and under extraordinary pressure. Its grip on power remains firm—for now. But the geopolitical chessboard is shifting rapidly. Tehran faces a narrowing set of options: normalise without leverage and survive, or escalate without military power and collapse. The international community must prepare for all contingencies, including the sudden fall of the regime, to prevent a power vacuum that could engulf the region in chaos. Still, between these extremes, the long-tested instincts of the Islamic Republic for tactical adaptation may yet shape an alternative path. 

Armin Seif is the Director of the Europe-Middle East Council on Global Affairs and a Senior Specialist at the German Red Cross. He specialises in governance and the rule of law in fragile states. He is currently researching the implications of artifical intelligence in fragile states at Oxford University and has conducted research at the London School of Economics and Political Science, the University of Cambridge, Oxford University’s Saïd Business School and the British Institute of International and Comparative Law. Armin was a member of several research teams on legal reform in the Islamic world with a particular focus on post-conflict Iraq and Afghanistan.