Clash over rehabilitated oil tycoon underscores Iran's post-war tensions

The first decisive break came with the 2019 assassination of General Qassem Soleimani, the commander who embodied Iran’s regional network of armed allies and whose elimination was once considered beyond the realm of possibility.

For years, Soleimani symbolized Iran’s ability to project influence across the Middle East. Western policymakers and Israeli officials acknowledged his central role in destabilizing the region, but the notion of his actually being killed was long dismissed as outlandish.

Memoirs and statements from American and Israeli officials confirm he was repeatedly in their crosshairs until January 2020, when President Donald Trump ordered a drone strike on his convoy in Baghdad.

The attack, initially conceived as a joint mission with Israel before it withdrew at the last moment, shattered the regime’s myth of its own invincibility.

Arms broken

Soleimani’s death not only removed Iran’s most visible strategist but also disrupted the command structure of its allied armed groups—damage that remains unrepaired.

If Soleimani’s killing marked the first taboo broken, the next was direct military action on Iranian soil.

For decades, the idea of such strikes lingered at the margins of debate. It was occasionally invoked as a deterrent but rarely treated as feasible.

That barrier has now fallen.

Israeli and American precision airstrikes and even temporary control of Iranian airspace have made operations inside Iran a lived reality.

The bombing of sites deep within the country shows that thresholds once thought inviolable have already been crossed.

Head in the sand

In today’s climate, where the targeting of senior officials has become normalized and attacks on Iranian territory draw limited diplomatic shock, Tehran continues to pursue demands increasingly out of step with global realities.

The Islamic Republic’s insistence on uranium enrichment and nuclear advances, after years of secrecy and deception, has lost its leverage.

None of the old deterrents carry weight: not threats to close strategic straits, not promises of “harsh revenge,” not missile parades or military drills.

What once projected strength now reads as ritual.

By denying the scale of these shifts and clinging to exhausted strategies, Iran’s leaders only accelerate the erosion of their position.

What was once taboo—strikes on leaders, attacks on Iranian territory—is now well-trod precedent, and Tehran’s refusal to confront these realities may only hasten its own undoing.

“The principle of negotiation, even in an indirect form with the United States, was endorsed by the Leader after the war,” said Abdolhossein Khosropanah, Secretary of the Supreme Council of the Cultural Revolution.

Days earlier, on August 24, Khamenei had struck a very different tone, eschewing talks and accusing Washington of seeking Iran’s “surrender.”

The veteran theocrat called the standoff over Tehran's nuclear program “unsolvable” and vowed the Islamic Republic would never bow to US pressure.

Khosropanah’s apparently conflicting citation surprised many. “Why would an official from a cultural body comment on national security?” analyst Damoon Mohammadi told Iran International.

Khamenei, he suggested, may have deliberately floated the idea through an unlikely figure to test domestic reaction.

The contrasting statements underscore intensifying infighting over Iran’s future course.

With the stakes raised by the 12-day war with Israel and the looming prospect of UN sanctions snapping back, Tehran’s factions are split between those urging pragmatic engagement and hardliners who insist any compromise would mean capitulation.

Moderates push diplomacy

President Masoud Pezeshkian has hinted at cautious engagement, despite heavy criticism at home.

Meeting Turkish President Recep Tayyip Erdogan at the Shanghai Cooperation Organization summit in China, he said Iran was ready for indirect dialogue with Washington so long as its nuclear rights were recognized.

Foreign Ministry spokesperson Esmail Baghaei echoed that line, saying Tehran would reinstate IAEA inspections and reduce enrichment to 3.67% if its sovereign right to enrichment were respected.

Hardliners resist

Former negotiator Saeed Jalili remains fiercely opposed, likening pro-diplomacy figures in early August to the Israelites who worshipped the golden calf in Moses’ absence—a possible jab at officials emboldened by Khamenei’s limited public appearances since the war.

Ultra-conservative commentator Mohammadsadegh Shahbazi wrote on X: “There are options beyond negotiation. International structures can be challenged. We must show that Europe and America are not our only paths.”

Washington unmoved

Despite the rhetoric, officials acknowledge Washington has shown no interest in talks. Deputy Foreign Minister Majid Takht-Ravanchi told Iranian media managers in a closed-door meeting Saturday—according to information obtained by Iran International—that the White House had ignored Tehran’s outreach.

Another deputy, Kazem Gharibabadi, reportedly disclosed last week: “We have sent messages to Washington 15 times in different ways to restart the negotiations, but we have not received any response.”

The last round, mediated by Oman, collapsed when the US demanded Iran curb enrichment on its own soil—a demand Khamenei branded a red line. With diplomacy stalled, Israel struck Iranian sites, triggering the 12-day war.

The August 31 appointment of Ali Bagheri Kani carries implications for factional rivalries, the role of Iran’s powerful clerical families and the looming question of succession to supreme leader Ali Khamenei.

Some observers, including former parliament security committee chair Heshmatollah Falahatpisheh, see the decision as an effort to placate hardliners—a view echoed by the conservative outlet Nameh News.

Others, such as commentators on Khabar Online, a platform close to Larijani, argue it reflects a coordinated bid by influential clerical clans to consolidate power.

Both outlets avoided linking the maneuver to 86-year-old Khamenei’s eventual exit, though many analysts consider succession the unavoidable backdrop.

‘A silent figure’

Bagheri Kani is best remembered as deputy to ultraconservative Saeed Jalili at the SNSC in the late 2000s, when the pair became known for their hardline stance in nuclear talks.

US negotiator William Burns, in his book The Back Channel: American Diplomacy in a Disordered World, described Jalili as a battle-scarred ideologue who had “learned the hard way in the trenches (of the Iran-Iraq war) that Iran could trust no one.”

Bagheri, Burns recalled, was “a silent figure” — a presence, but not yet a voice. The duo took over nuclear talks after Larijani stepped down following disputes with Mahmoud Ahmadinejad’s administration.

Now Larijani, Bagheri and Jalili must work together again, as Jalili also sits on the SNSC as Khamenei’s representative.

Tensions are already evident: last week, hardliners in the Majles pressed Larijani to explain why he ignored legislation demanding Iran’s withdrawal from the Non-Proliferation Treaty.

Revolutionary or not?

Bagheri himself has shown signs of shifting.

In 2024, the hardline daily Sobh-e Now noted that he had grown critical of those “disguised as defenders of revolutionary values” who cast negotiations as betrayal.

Etemad Daily highlighted the contrast with Jalili, citing Khamenei’s rebuke of Jalili for holding unauthorized bilateral talks with Burns.

Bagheri, by contrast, said he would never conduct technical negotiations with US experts but still defended diplomacy as a vital tool: “Those who attack negotiations as counter-revolutionary behavior wish to rob the Islamic Republic of negotiations as an effective tool. Politics is the arena of beliefs, rationality and intelligence.”

Criticism from the hardline Paydari Party's deputies has reinforced the perception that Bagheri has moved away from his earlier ultraconservative line.

His remarks on Europe also suggested pragmatism: “The potentials of the East do not mean we should ignore other potentials. Europe has never been on our blacklist. We will welcome their cooperation as much as they wish to play a role in Iran’s development.”

Establishment and succession

The appointment also underscores the weight of Iran’s clerical dynasties.

Bagheri is part of the powerful Kani clan, son of former Expediency Council member Mohammad Bagher Bagheri Kani, with a brother married into Khamenei’s family.

Larijani, meanwhile, belongs to another dynasty: the sons of the late Ayatollah Mirza Hashem Larijani, with brothers tied by marriage to Grand Ayatollah Vahid Khorasani and Ayatollah Morteza Motahari.

These families, wealthy and deeply embedded in clerical life, form a dominant bloc within the Islamic Republic.

Against this backdrop, Larijani’s choice to elevate Bagheri looks less like conciliation and more like strategic positioning in a system bracing for transition.

With succession looming and clerical clans maneuvering for influence, even a deputy appointment at the SNSC reverberates beyond the bureaucracy—into the struggle over who will shape the post-Khamenei order.

Iraq’s national oil marketer, SOMO, rejected any involvement when the United States sanctioned an Iraqi businessman in July for allegedly profiting from smuggling Iranian oil disguised as Iraqi crude.

But customs data from China appears to point to a different reality.

For two consecutive years, Chinese records show imports of “Iraqi” oil exceeding Iraq’s declared shipments by around 100,000 barrels per day—worth more than $2.5 billion annually.

The gap has grown since 2021, suggesting a persistent pattern of disguised flows.

Spoofing, going dark

Tanker-tracking companies confirm that Iran uses a mix of tactics to conceal the true origin of its shipments. These include forged bills of lading and manipulation of AIS (automatic identification system) data, which allow vessels to broadcast false positions.

Some tankers simulate loading near Oman’s Sohar port, though the crude is actually taken on in Iranian waters. Similar tricks have enabled Iranian oil to reach China under the cover of Iraqi or Omani documentation.

“Iranian oil does reach China as ‘Iraqi’ oil in large volumes given the bogus SOMO documentation, but we’ve also seen the same with ‘Omani’ oil because of the spoofing off Sohar,” said TankerTrackers, a shipping intelligence company.

Kpler, another data firm, said very large crude carriers often “go dark” and later reappear, but rarely spoof Iraqi terminals directly.

For fuel oil, however, some spoofing to Iraq’s Al Basrah terminal has been observed—though only in small amounts.

Kpler estimates Iran exported about 245,000 barrels per day of fuel oil in 2024, worth nearly $6 billion. Almost half went to the United Arab Emirates, 22% to China, 10% to Malaysia and the rest to other East Asian states.

“Iran uses a number of tactics to evade sanctions, including forged bills of lading, which may lead many to believe they are transporting Iraqi oil when in fact it is Iranian,” Claire Jungman of Vortexa said.

Shifting political cost

These tactics keep Iran’s exports flowing, but they also export the political fallout.

By disguising shipments as Iraqi, Omani or Emirati, Tehran forces its neighbors to carry the political and reputational burden in Washington.

Iraq’s oil minister Hayyan Abdul-Ghani acknowledged earlier this year that Iranian tankers were using forged Iraqi documents and said the matter had been reported to the United States.

Meanwhile, nearly half of Iran’s exports to China are presented as Malaysian oil—an anomaly that has drawn US scrutiny of Kuala Lumpur.

In the first seven months of this year, Chinese customs data showed imports of 1.46 million barrels per day from Malaysia, even though Malaysia’s total production is only about one-third of that figure.

Enforcement challenge

The pattern highlights the difficulty the US and its allies face in enforcing sanctions.

Iran has developed a sophisticated playbook: falsifying documents, manipulating digital tracking systems and exploiting the names of neighboring states. Each maneuver allows Tehran to keep revenues flowing while leaving others to explain statistical discrepancies.

For Iraq, the reputational stakes are particularly high.

As Baghdad seeks deeper ties with Washington and international investors, being seen as a potential cover for Iranian smuggling undermines confidence in the transparency of its oil sector.

By exploiting its neighbors’ identities, Iran is eroding trust in the global energy system, where documentation and digital tracking are supposed to guarantee legitimacy.

Addressing the gathering on Monday, Pezeshkian outlined a three-part proposal called the “Special Accounts and Settlements of the Shanghai Cooperation Organization.”

The plan proposes to expand the use of national currencies in trade, develop shared digital systems including central bank digital currencies, and create a multilateral swap fund to support members facing sanctions or liquidity crises.

“This initiative will enhance economic resilience and turn the SCO into a model of a fair multipolar financial order,” he said.

He also urged the formation of a committee of foreign ministers to manage crises and respond quickly to violations of sovereignty.

This was not the first time Pezeshkian stressed de-dollarization. At a BRICS meeting in Russia in 2024, he said the bloc was recognized for “challenging the dominance of the dollar” and promoting national currencies.

At that time, an image of a banknote bearing the BRICS emblem in the hands of Russian President Vladimir Putin at the organization’s summit in Tatarstan drew media attention and sparked discussion about the possibility of its members adopting a common currency.

In December 2024, before officially taking office as US President Donald Trump warned BRICS members that if they used any currency other than the US dollar, they would face a 100% tariff.

Absent from leaders’ photo

A video released Sunday showed Pezeshkian missing from the customary group photo.

Iranian media said he arrived late, while his deputy for communications said the official summit was to begin the following day and the photo was taken during an informal banquet. Unofficial Iranian accounts said his absence was due to alcohol being served at the reception, an issue sensitive for Iranian officials.

Tehran is seen as banking on bilateral meetings during the summit, particularly with Russian President Vladimir Putin and China’s Xi Jinping, as it seeks to manage fallout from its nuclear dispute with the West.

Founded in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, the Shanghai Cooperation Organization (SCO) initially focused on regional security and counterterrorism.

Over time, China and Russia have framed it as a counterweight to US and NATO influence. The SCO now has 10 full members—including India, Pakistan, Iran (since 2023), and Belarus (since 2024)—and its agenda has expanded to economic, political, and military cooperation.