Gutted cabinet, rejected US overtures put Iran's Pezeshkian in tough spot

“I personally believed it would be better to negotiate [with the US], but the Supreme Leader said we will not talk with the US. So I said we would not negotiate with the US. It was done and over with, it was done and over with,” Pezeshkian said, his tone possibly reflecting frustration, during a speech in Parliament on Sunday. He was attending the session as lawmakers debated the impeachment of his economy minister, Abdolnaser Hemmati.

This marks the first time an Iranian president, while still in office, has openly acknowledged a significant policy disagreement with Khamenei on a matter of dire national importance.

At a press briefing on Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei emphasized that Pezeshkian’s remarks were clear and meant that his government would adhere to "policies ordained by the top officials of the country"—a phrase commonly understood to refer to Khamenei.

A mission derailed?

When the reform-leaning Pezeshkian was unexpectedly allowed to run in the June snap presidential election, many speculated that his candidacy was intended to facilitate negotiations with the US while also serving as a scapegoat if the talks failed.

"Pezeshkian was supposed to be the president who negotiated with the US," political commentator Sahand Iranmehr wrote on X, arguing that after Trump’s election, Iran’s real decision-makers reversed course. According to Iranmehr, Pezeshkian’s speech in Parliament reflected a leader whose mission had been completely erased—a man who now appears aimless, sidelined, and even ashamed.

There are also some speculations that Pezeshkian’s candid admission of his disagreement with Khamenei was a deliberate—perhaps desperate—attempt to shift responsibility for the consequences of refusing negotiations onto the Supreme Leader himself.

By publicly acknowledging his stance, Pezeshkian may have sought to make it clear that if the economic and political crisis worsens, it will be Khamenei and the hardliners opposed to negotiations rather than his government who should bear the blame.

Fallout from Pezeshkian’s admission

On Sunday, the hardline-dominated Parliament voted to remove Pezeshkian's reformist economy minister. Hours later, he also lost his strategic affairs deputy, Mohammad-Javad Zarif, a figure despised by hardliners for advocating diplomacy with the US.

In an X post, Zarif announced his resignation, stating that he was stepping down on the "advice" of Chief Justice Gholam-Hossein Mohseni-Ejei. Pezeshkian has yet to officially accept his resignation.

Due to the sensitivity of the issue, most politicians and commentators in Iran have refrained from directly commenting on Pezeshkian’s remarks. Instead, they have either quoted him verbatim or expressed disappointment in vague terms.

However, ordinary Iranians—many posting anonymously on social media or sending recorded messages to Iran International TV—have been far more direct in their criticism and many say he should resign now that he has realized he has no power to deliver his election promises, including resolving the issue of sanctions through direct talks with the US.

“It was you who mocked [Saeed] Jalili [in election debates] saying nothing could be done unless sanctions were lifted. Now you are saying you wanted to negotiate but will not do so because Ali Khamenei says no,” one of the angry citizens said in a recorded messages sent to Iran International.

Others who had hoped Pezeshkian would break the deadlock over sanctions expressed deep disillusionment. A businessman in Tehran, speaking anonymously to Iran International, said voting for Pezeshkian had been "the last chance" for him and many others who had hoped change could come through elections.

"With the possibility of sanctions worsening due to Khamenei’s obstinacy, things that are already bad could spiral into something much worse. When all hope is lost, a countdown to the public’s complete disillusionment with the regime will begin, possibly in the next few months," he warned.

Khamenei’s history of blocking US negotiations

Khamenei has a long history of obstructing presidents who sought negotiations with the US. However, his stance has not always been absolute. While he denied permission to Akbar Hashemi-Rafsanjani and Mohammad Khatami, he allowed secret talks with US officials in Oman from 2013-2015 that resulted in the JCPOA nuclear deal.

“Rafsanjani advocated talks with the US but was not given permission. Neither did Khatami. Mahmoud [Ahmadinejad] was allowed but he wasn’t taken seriously [by the other side]. Then there was Rouhani who managed to make the nuclear deal but denied permission to continue. Raisi tried secretly for three years but failed. And Pezeshkian said today that he wants negotiations but [is forbidden]… and the story will continue,” wrote Ghorbanali Salavatian, a reformist public figure and Iran-Iraq War veteran, in an X post.

The cut, which slashed about half of the electricity Iran provides to Diyala, severely disrupted power in the province's eastern, northern, and northeastern regions, according to Aws al-Mahdawi, a Diyala Provincial Council member.

"It could be a technical issue or related to re-programming codes," al-Mahdawi told Rudaw, a media outlet in the Iraq’s Kurdistan region.

This latest incident follows a history of disruptions to the Mirsad power line, alongside Iran's own energy shortages which have seen extensive blackouts, most recently forcing working weeks down to two or three days in large swathes of the country.

During Iraqi Prime Minister Mohammed Shia' al-Sudani's visit to Tehran in January, officials announced plans to restore 625 megawatts through the Mirsad, Karkha, and Siril lines.

Iraq depends on Iranian electricity and gas imports to bolster its own power generation. To mitigate the impact of US sanctions on Iranian exports, Washington has repeatedly granted Iraq four-month waivers, allowing continued energy purchases.

These waivers, recently extended in the summer for 120 days and nearing expiration, are intended as a temporary measure until Iraq can achieve energy independence.

In early February, US President Donald Trump issued a directive to reinstate the 'maximum pressure' policy on Tehran. The directive signaled a potential end to sanctions waivers, saying, “The Secretary of State will also modify or rescind existing sanctions waivers.”

The directive, reported by Tasnim News Agency on Sunday, mandates dedicated online portals for immediate publication of non-confidential financial data including information on financial policies, loan facilities, and regulatory directives.

It also ordered banks and non-bank credit institutions to establish units to handle public inquiries within a strict 10-day deadline.

Aimed at bolstering public trust and accountability, the move comes in response to repeated violations of the Law on Publication and Free Access to Information, according to the CBI.

The CBI said that inspections reveal banks are consistently failing to comply with transparency laws, adding that this undermines public trust and hinders access to crucial financial information.

The measure comes as Iran slides to 151st out of 180 countries in Transparency International's 2024 Corruption Perceptions Index (CPI).

The CPI, which assesses perceived public sector corruption, shows Iran's continued decline, with a score of just 23 out of 100. The index highlights concerns over bribery, misuse of public funds, and limited access to information.

In October 2023, a report by the World Bank placed Iran among the worst countries in the world in terms of Worldwide Governance Indicators, with a Voice and Accountability Index score of -1.45, placing it among the lowest for political participation, free expression, and media freedom."

"Zelensky's victorious confrontation with Trump showed that one can negotiate with the devil and prevail. It is not the case that every negotiation leads to concessions," the newspaper wrote in an editorial on Sunday, praising the Ukrainian leader’s defiance during a tense Oval Office meeting on Friday.

"Some believe negotiation with America is futile. But Zelensky demonstrated that with courage and clarity, one can not only resist pressure but emerge triumphant," it added.

The paper said that while Trump and his team attempted to corner Zelensky, pressuring him to accept a peace plan favorable to both Moscow and Washington, “Instead, Zelensky removed the mask from Trump's face" and publicly accused the US of falling for Russian deception. "The arrogance Trump displayed was shattered by Zelensky's frank and courageous behavior."

Shortly after the meeting between Trump and Zelensky made international headlines, the office of Iran's Supreme Leader seized the moment to revive his warnings about reliance on the West.

Ali Khamenei's official X account reposted his 2022 remarks on Ukraine. "The first lesson from the situation in Ukraine is that Western support for countries and governments that are their puppets is a mirage," it said. "All governments must understand this. Those governments relying on the US and Europe should look at the current situation in Ukraine."

Khamenei has banned diplomatic talks with the US, in spite of support from the likes of the country's president. Last month the Supreme Leader called negotiations "neither wise, nor intelligent, nor honorable."

“I believed it was better to engage in dialogue, but when the Leader said we would not negotiate with the US, I said, ‘We will not negotiate with the US, period,’” Masoud Pezeshkian said.

He added that government policy must align with Supreme Leader Ali Khamenei’s stance on the issue.

Khamenei, the country's ultimate decision-maker, rejected the idea of talks with Trump last month, calling them "neither wise, nor intelligent, nor honorable."

Speaking during the impeachment session of Minister of Economy Abdolnaser Hemmati, Pezeshkian described the challenges his administration faced upon taking office.

“When we took over the government, there was an imbalance in water, gas, electricity, and money,” he said, referring to the country's shortages.

Critics of Hemmati’s economic policies attribute the skyrocketing dollar exchange rate, rising food prices, and overall inflation to his leadership. The US dollar has surged to 940,000 rials, placing severe strain on households and businesses.

Addressing broader geopolitical issues, Pezeshkian likened the current situation to wartime conditions, citing incidents such as the killing of former Hamas leader Ismail Haniyeh on the first working days of his government and developments in Syria and Lebanon.

“We are in a full-scale war and must adopt a wartime posture... Today’s war is worse and more difficult than the war with Iraq,” he said.

He also referenced US sanctions on Iranian shipping, adding, “Trump imposed extensive sanctions on our ships, and now they are stuck, unable to unload their cargo... Qatar, Iraq, Turkey, and many other countries are not returning our dollars.”

During the impeachment hearing, lawmakers in favor of Hemmati’s removal argued that his policies had worsened the economic crisis.

One of these critics, MP Jabar Kouchaki-Nejad, criticized the government’s economic team, saying their performance had affected all social classes.

“Hemmati explicitly told us that the issues of currency depreciation and inflation have nothing to do with him,” Kouchaki-Nejad said.

MP Rouhollah Izadkhah also pointed out that the national currency had lost 62% of its value in a few months, while Rasoul Bakhshi Kouhpayeh pointed out that the exchange rate of the US dollar in Iran had increased 13,000 times over the past 50 years.

Hemmati defended his record, arguing that inflation had fallen by 10% under his tenure. “Seventy percent of the government’s expenses are covered through taxes. In the past month alone, the tax organization has collected 1700 trillion rials ($1.8 billion) in revenue,” he said.

He dismissed accusations that the government deliberately increased the exchange rate, saying, “The dollar rate is not real, and we will certainly bring it down.”

Some commentators, analysts and media outlets in Iran have pointed out in recent months that without a deal with the US and removal of sanctions the economy cannot improve. Some have also argued that impeaching a minister would not help to improve the situation.