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Key Takeaways
- Iran’s nuclear defeat, military losses, and regional setbacks have arguably made 2025 its most destabilizing year in decades.
- Economic collapse, inflation, and daily hardship are fueling public frustration.
- Iran’s leaders must now navigate whether to negotiate, brace for another war, or rebuild its nuclear program in secret, writes Iranian-American journalist Hooman Majd.
The year 2025 might be Iran’s worst-ever annus horribilis.
Only 10 months ago, there was some tentative optimism in the nation that, with a new president in the White House — albeit one who had gifted Iran its previous anni horribiles by withdrawing from a working nuclear agreement, and who, while campaigning in 2024, promised he would “solve” Iran’s nuclear issue — there might be a chance for a renewed nuclear deal and an entente with the U.S.
But as we approach the end of the year, Iran finds itself altogether without a functioning nuclear program, it having been either destroyed or buried under a mountain of rubble by the U.S.’s MOP bombs in June. The nation also lacks an effective air defense following Israeli attacks on its missile launchers and anti-aircraft batteries, and it’s still grappling with the loss of its top military commanders and nuclear scientists — they were assassinated in those same Israeli attacks in the 12-day war between the two adversaries.
Hardly an auspicious end to a promising beginning.
If that wasn’t enough bad news, Iran is still dealing with its previous annus horribilis, which brought it the loss of Syria, its closest ally in the Arab world and a land bridge to its closest “resistance” partner: Hezbollah in Lebanon, which itself lost its top commander, Hassan Nasrallah, in an Israeli strike on his bunker at the end of 2024. In July of that year, Hamas, another “resistance” partner, lost one of its top leaders, Ismail Haniyeh, to Israeli assassination — in a Tehran guest house located on the grounds of one of the Shah’s former palaces, no less. The only allies Iran had left in its “Axis of Resistance” in late 2025 were the Houthis of Yemen — yes, they could menace Israel and the U.S. by attacking shipping vessels in the Red Sea, but they hardly pose a serious threat to either.
Iran’s currency is at a historic low against the dollar.
Meanwhile, Iran faces an unprecedented economic downturn. After declaring that Iran’s nuclear program is no longer a threat, Trump added that, should Iran attempt to restart it, he wouldn’t hesitate to bomb it to smithereens again. Iran also failed to forestall the re-imposition of UN sanctions lifted under the Joint Comprehensive Plan of Action (JCPOA, the 2015 nuclear deal) at the UN General Assembly this year. The brain drain of its top highly educated talent continues unabated, the youth face under- or unemployment, and inflation is close to 50% (according to official figures, but probably much higher based on anecdotal evidence). The level of dissatisfaction with the regime and the state of affairs is at an all-time high.
Iran’s currency is at a historic low against the dollar. As a measure of how inflation is affecting Iranians, one friend in Tehran told me in November that a single grain of rice (a staple in Persian cuisine) now costs 800 Rials, or roughly $0.02. That anyone would even think to consider the price of rice per grain rather than per kilo would not have been believable even a couple of years ago. (During the Islamic Revolution in the late 1970s, the Iranian currency was roughly 70 Rials to the dollar, compared to the current official rate of 42,000 and market rate of over 117,000). On top of everything else, there are rolling blackouts in the summer (some say caused by government bitcoin mining), and a severe drought in the fall (combined with water resource mismanagement over decades) has made water rationing a real possibility. If the situation continues unchanged, Tehran may need to be evacuated, according to President Masoud Pezeshkian.
The 12-day war with Israel did, however, amidst the misery of Iran’s people, bring about, if not a true rallying around the flag, at least a nod to it among nationalist Persians. This was perhaps to the surprise of Israel and certainly to the surprise of Reza Pahlavi, Iran’s former crown prince and most recognizable opposition figure, who not only has allied himself with Israel in his quest to overthrow the Islamic Republic, but called the war on his country, which took the lives of a thousand of his compatriots, Iran’s “Berlin Wall moment.” It was no such thing, of course, but that doesn’t mean that the regime believes that it is safe — either from attack by Israel and the U.S., or even by implosion at home. Or, indeed, by an imposed regime-change brought about by the U.S. and Israel (which hints at it regularly) to replace the Islamic Republic with a government more to their liking.
Reform, as Iranians know it, is no longer an effective force in Iranian politics.
One would be forgiven for thinking that Iran is ripe for real political change, with its international standing as weak as it has been in decades and some Iranians (both inside Iran and in the diaspora) clamoring for a domestically engineered regime change. How, exactly, would that work? If not through reform, which has been attempted previously with only limited success, then perhaps through a military coup by disgruntled or even fearful top-ranking officers or former officers unwilling to risk another war like the one that killed their predecessors.
And yet Iran is not fully ripe for the kind of drastic change that would satisfy secular-minded Iranians inside and outside the country, never mind the European powers or the U.S. At least, not yet. The Islamic system, the nezam, still has its diehard supporters, even though they don’t constitute a majority of the population. While there is infighting among the leadership and its former members, they are nonetheless believers in the Islamic Republic’s system — internal opposition to the system is weak and divided. Reformists have been expelled from any real decision-making roles, and President Pezeshkian’s confession that his opinion on social and political issues is not relevant if it conflicts with the Supreme Leader’s is proof positive that reform, as Iranians know it, is no longer an effective force in Iranian politics.
Despite its losses in the war with Israel, the military, and especially the Islamic Revolutionary Guard Corps (IRGC), remains loyal to the nezam and benefits from it economically and in influence. By all indications, it will continue to put down any serious uprising by the people with force, as it did during the massive “Woman, Life, Freedom” protests of 2023. As such, many Iranians today see little reason to risk their lives or well-being in what would be leaderless public protests. That’s why we only witness pockets of civil disobedience, which pose no real threat to the regime, every now and then. That no mass protests materialized in Iran on November 16, a day that was being promoted on social media for an uprising, along with videos of soldiers — of questionable authenticity — pledging defection from the regime, was further indication that, while social media can amplify a current, Iran is not in a pre-revolutionary stage.
Meanwhile, the government’s unwillingness or inability to ease the public’s suffering means there is less likely to be drastic change in the near future. It can’t decide whether to crack down on what is no longer just a flouting of hijab regulations, let alone police the open mocking of the Islamic system by the youth in their wearing of the most provocative outfits seen in Iran since the last days of the Shah. It seems indecisive on whether to forge ahead with the nuclear program or the pursuit of a bomb, or even with negotiations with the U.S.
The regime will be forced to make some difficult decisions going into a new year.
Sensing no viable alternative for political change, seemingly the only thing that people in Iran do in response is defy the regime’s restrictive social prohibitions and openly curse and sling insults at everyone in the leadership, especially those at the very top — any Iranian who regularly communicates with relatives inside the country can attest to this, and the occasional social media video of spontaneous chants of “death to Khamenei!” serve as further proof. Scenes from Iranian cities this past Halloween — celebrations of which had been preemptively banned by the authorities — showed Iranians in public enthusiastically donning costumes that wouldn’t be out of place in any American Halloween parade, highlighting the utter impotence of authorities to enforce their own public warnings and laws. There were only a few exceptions where gatherings were broken up by the police.
Until recently (and during the JCPOA negotiations), Iran faced a choice in its international relations: uranium enrichment or sanctions relief from the West. Under former President Barack Obama, enrichment was curtailed for some relief from sanctions, and the nuclear deal he agreed to was actually quite popular in Iran. Under Trump, though, the choice returned to the U.S.’s de facto position of zero enrichment for some sanctions relief. But what has transpired now, after the bombing of its nuclear facilities, is zero enrichment and zero sanctions relief — a far worse outcome than any Iranian politician could have imagined only six months ago. That means that the regime will be forced to make some difficult decisions going into a new year.
The last time it faced a difficult decision, Ayatollah Khomeini, founder of the Islamic Republic, agreed to a ceasefire in the Iran-Iraq war in 1989 but likened his acceptance to “drinking poison from a chalice.” As “deadly” (his words) as that drinking was for Khomeini, it was just to stop a war, not surrender to its enemy. The poison that is currently prescribed to Ayatollah Khamenei, his successor, is far deadlier; in Trump’s words, its ingredient is “complete and unconditional surrender” of Iran’s nuclear program. That, at least for now, is not a prescription a leader in Iran can willingly fill.
But simply restarting uranium enrichment without a specific goal would also seemingly be neither sensible in the current environment nor popular among the population (who might reasonably see it as inviting a new round of bombing and destruction). The dilemma is that not restarting the enrichment program would be no different from the surrender that Trump demands. Iran’s leaders may, of course, choose to resume their nuclear program, endure another attack, and then retaliate with deadlier force than the last time (it still possesses a large supply of accurate ballistic missiles), something it has so far promised to do. But for some in the leadership, there might also be a growing belief that a covert bomb program — hidden until time for a nuclear test — is ultimately the only real deterrent against outside aggression and the only solution to a negotiated deal to lift sanctions that would put Iran on equal footing with the U.S.
Iran’s rejection of direct talks with the U.S. early this year was clearly a mistake.
That the idea of the possibility of weaponization, or at least the boast that Iran is capable of building a bomb, has been openly floated in the past year is an indication that a race for a bomb is not out of the question, despite Ayatollah Khamenei’s fatwa prohibiting it. (Although, as both the Soviet Union and Apartheid South Africa discovered, possessing nuclear weapons is no deterrent to domestically effectuated regime collapse and change.)
Many Iranians — including some former officials and likely current ones, too — have observed Trump’s decision-making, character, and policy toward Syria and its President Ahmed al-Sharaa, and concluded that the only way to extract concessions from the U.S. is through direct, face-to-face meetings with Trump himself. (Flattery, they see, gets you everywhere with this White House.) Iran’s rejection of direct talks with the U.S. early this year was clearly a mistake. But today, with the U.S. having bombed Iran, talking to Trump remains a hard sell for a regime that prides itself on its standing up to American dictates. And yet, not talking or negotiating leaves Iran with its current economic malaise and the predicament of no real deterrent against military attack.
These questions — whether to build a bomb, brace for another war in the case of restarting its nuclear program, or to sit down with its nemesis to hammer out a deal — are undoubtedly vexing for the leadership. But decisions will have to be made sooner rather than later since there is no indication that the next three years of Trump’s presidency and his policy toward the Middle East will be radically different from his first. Time will tell what decisions will eventually be made by the regime, but what can be assured is that whether its nuclear program is in operation or lies fallow, whether there is another attack by Israel or the U.S. (or both), its people — of all political stripes — desire, for once, an annus mirabilis to replace the anni horribiles of the past.
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