One of the most striking elements of the ongoing war in the Middle East is how a severely damaged and depleted Iranian military has still managed to hold the world economy hostage. In doing so, Tehran’s new leadership is exerting pressure on the United States to either escalate or change course. But as the costs keep mounting for Iran, how long can it continue down that path? Who are its current leaders, and how are they thinking about an endgame in the current conflict?

On the latest episode of FP Live, I put those questions to Ali Vaez, the director of the Iran Project at the International Crisis Group and an analyst with extensive contacts with Iranian lawmakers. Subscribers can watch the full discussion on the video box atop this page or download the free FP Live podcast. What follows here is a condensed and lightly edited transcript.

Ravi Agrawal: So, who’s really running Iran right now?

Ali Vaez: It’s still the Islamic Republic—with new faces. Instead of an 86-year-old Ayatollah Ali Khamenei, you have a 56-year-old Mojtaba Khamenei, his son, and other power centers who were in charge. The president is still the same. The speaker of the parliament is still the same. There are, however, new officials replacing those who have been assassinated.

One of the misperceptions about Iran—because it is framed as a terrorist state in places like Washington—is that if you decapitate the top, the rest of the organization will fall apart. But the Islamic Republic, in the true sense of the word, is a system. It’s a network, a political structure with multiple power centers. And therefore, if you remove one individual, the rest of the system can fill the gap.

Currently, the most powerful figure within the system is Mohammad Bagher Ghalibaf, the parliamentary speaker, who was a former commander of the Islamic Revolutionary Guard Corps’ air force. But U.S. President Donald Trump, who’s seeking the Iranian equivalent of Venezuela’s Delcy Rodríguez, doesn’t fully appreciate that Ghalibaf could never play a Rodríguez role because other power centers would check him. And if he goes too far in compromising with the United States, he would undermine his own position.

Another important figure now is the new national security advisor, Mohammad Bagher Zolghadr, who was formerly number two in the Revolutionary Guard. He replaced Ali Larijani, a relative pragmatist within the Islamic Republic structure. Zolghadr is so radical that when he was appointed as deputy commander of the Revolutionary Guards in the late 1990s, the infamous Gen. Qassem Soleimani resigned because he said he couldn’t work with him. And Ayatollah Ali Khamenei brought him back and appointed him as the head of the expeditionary force of the Revolutionary Guards, the Quds Force, so that he would still remain in service. That’s the cast of characters that we have.

RA: So, the system endures, the regime endures. But not only that, we have a more hard-line group of leaders who are more aligned with the military and are likely to be more vengeful.

AV: Not only are they more hard-line and radicalized, they are less risk-averse than the previous leadership. One of the most important criticisms against Ayatollah Ali Khamenei was that he was too cautious. He was hedging all the time. He spent so much time on a nuclear program that neither produced energy nor a bomb. When the Oct. 7, 2023, attacks took place and he had the ability to activate Iran’s regional network in Israel, he left each of the proxies to fight Israel on their own, allowing Israel to basically pick them out one by one and eventually come after Iran. His symbolic retaliation for U.S. strikes on Iranian territory signaled to the United States that there was no cost associated with going after Iran. The new class of leadership has learned the exact opposite lessons. And this is why they’re so belligerent that they have attacked all of Iran’s neighbors, even those with whom Iran had a good relationship. They closed the Strait of Hormuz from day one. So, we are dealing with much, much more hard-line people now.

RA: How is this new crop of leaders communicating? There have been some reports that the military leaders are unable to really talk to each other. They’re afraid that their comms might be compromised. How damaged is command and control?

AV: I see no sign, Ravi, of any kind of serious damage to command and control. In fact, one has to remember that, for the Islamic Republic, the starting point of this war was not Feb. 28 of this year but June 24 of last year, when the 12-day war ended. The Iranians expected that there would be another U.S.-Israeli strike and put contingency plans in place: a three-pronged approach of stretching the conflict in time and space, imposing economic costs on the United States and the global economy through the Strait of Hormuz, and preserving command and control and continuity of governance. They had used the so-called mosaic approach, which breaks the command and control down among all 31 provinces in Iran, in case communication with the center is disrupted or cut off.

At the end of the day, they were able to preserve communication, even though provinces are acting based on predesigned plans. The evidence is in the type of retaliation that the Iranians are doing. If Israel or the United States targets, let’s say, a petrochemical company in Iran, then a petrochemical company in Israel is targeted. If a university in Iran is targeted, an American university somewhere in the region is targeted. So this shows that there is still a degree of centralized command and control.

They probably don’t communicate digitally. I have heard that with the very top of the system, they communicate through couriers. Of course, they know that they’re all vulnerable to being targeted, especially by Israel.

RA: That idea of a courier is interesting because my next question is about diplomacy. There’s all this reporting about Pakistan getting involved, for example, in brokering talks between Iran and the United States. And the question then is who negotiates on behalf of Iran and does that person have the ability then to communicate, for example, with the supreme leader or the speaker of the parliament, to then corral some sort of message that this is what the country actually wants?

AV: A few people will still pick up the phone. One is Iranian Foreign Minister Abbas Araghchi, who’s been the interlocutor for most of the negotiations that have happened in the past decade and a half. Iranian President Masoud Pezeshkian has had conversations with European and regional counterparts. So, the government can be the intermediary with other power centers in the country.

There is no sign of life from Mojtaba Khamenei at this moment. We have not heard his voice. We have not seen any live photos or videos of him. He might be incapacitated or dead. It’s unclear. But at the end of the day, there will be generals in command as leader of the Revolutionary Guards, as the national security advisor, and as the speaker of parliament. This group would make the final decision. And because they anticipated this, I think they have a plan about when they would be willing to accept a deal and under what circumstances. The timing is when they believe that the United States and Israel have paid such a high price for this conflict that they would be deterred from doing it again.

RA: What would constitute such a high price?

AV: The Iranian military strategy started by stretching U.S. resources for defending its own assets and allies thin, because this was always about the math behind the number of missiles and interceptors. Israel and the Gulf countries are running low on interceptors now. The Iranians also targeted almost the entirety of the integrated U.S. radar system in the region so that the advance warning and coverage would be diminished. That’s why they fired a higher tempo of missiles and drones in the beginning, but now they’re keeping it at a steady pace—because they’re getting through with more efficiency than in the past.

The other element of this is closing the strait, which has created economic costs for the entire region and the global economy, and political costs for Trump. The Iranian concept is that, because they’re outgunned by the United States and Israel, they should try to outlast them. They believe that the number of fatalities on the U.S. side still hasn’t reached an intolerable point. Gas prices in the United States are higher, but they’re not intolerable. Trump’s numbers have not fallen significantly, especially within his core base. So, they would still want to continue escalating because they believe they can extract better concessions from the United States—either because the United States, Israel, and Gulf countries run out of ammunition, or because some sort of escalation, such as the Houthis closing off the Bab al-Mandeb Strait, results in much higher oil prices.

RA: As you think about the calculation that the Iranian leadership is making, at what point do they feel like they’ve lost too much and they can’t go on? Or are you saying there is no such point?

AV: This is not a conflict that is calculated in terms of costs for the Iranians, because they always knew that they would absorb significantly higher costs than the United States and Israel. Their main objective is not to win, but not to lose. Survival, for them, is victory. This is the objective at any price. The view is that, because a lot of what they have is indigenously built—their ballistic missiles and nuclear program were internally developed, not imported—they can always try to regain that.

They also have external support. Iran has been selling more oil and making more money during this war than before the war. The Russians have also been sending military equipment to Iran through the Caspian Sea. Russia and China are now looking at Iran in a different way, similar to how the Europeans look at Ukraine now—as David versus Goliath, a weaker party that was able to stand up to a superior military power. It is quite possible that during or after this war, Russia and China would grant Iran the kind of benefits that they’ve been reluctant to give so far. This is why the Iranians believe that at any price, if they survive to fight another day, they will figure out a way.

RA: So, in other words, this war is going to plan from Iran’s perspective.

AV: It is more going to plan for Tehran than it is for Washington. The opening act of this was a serious setback—not because of the elimination of the supreme leader but because a lot of other senior military leaders were killed in that opening act.

But if you look at the escalation ladder, they have incrementally increased the pressure on the United States and Israel. Their allies in the region, whether Hezbollah, the Houthis, or the Hashd al-Sha’bi in Iraq, have come in at specific points over the course of the conflict. They still have additional cards to play in case the United States puts boots on the ground or Israel targets energy infrastructure. It does appear to be going to plan. This is why the Iranians have a sense of overconfidence and could potentially overplay their hand.

RA: And what would that look like? Because on the other side of this, of course, the United States seems to have two broad options here. One is to find ways to just get out of this as quickly as possible, declare victory, whatever reality is, but to just declare victory. But the other option, which a segment of the American right-wing media has been pushing for, is to “finish the job”_—however you define that—and that could take the form of either trying to seize Kharg Island, which is where most of Iran’s oil exports flow through, or boots on the ground and a much more dramatic U.S. intervention. What is your sense of how Iran is gaming out those possibilities?

AV: When it comes to a unilateral cease-fire imposed by the United States, as what happened in the 12-day war last year, it isn’t an option, because the Iranians know that they accepted that cease-fire only to be a subject of aggression again eight months later. It is one of their key priorities not to commit that mistake again. So, if the United States withdraws, it is possible that Iran will continue attacking Israel, and the United States would have to then serve in a defensive position to help Israel. Iranians are still very likely to continue to impose control over the Strait of Hormuz, which would be very humiliating for Trump.

The other side of the coin, where Trump decides to escalate, would be very costly, regardless of which option the president chose. The Iranian air force is very weak; their navy is nonexistent. The one thing going for them is their ground forces. So, putting boots on the ground on the mainland, given the geography and terrain in favor of the Iranians, is going to make the wars in Iraq and Afghanistan look like a walk in the park. If the objective is to take over some of the Persian Gulf islands, that is also easier said than done. The U.S. troops would be sitting ducks on these islands. If we end up putting boots on the ground, there will be a very high number of casualties, which plays into Iran’s hands, because they want to increase the cost of this for Trump.

Even holding these islands, how long would the United States be there? Iran would have other options—they would mine the strait, which would block it physically. The Houthis would also close the Bab al-Mandeb Strait, where two-thirds of Saudi and Emirati oil is going out to Asian markets. That would push the price of oil to above $200 or $250 a barrel, which would result in a global economic meltdown and a political disaster for Trump in an election year. This is why, in the piece that Robert Pape and I wrote for Foreign Policy, we say that the president is in an escalation trap and that there is no good option for him to get out of this.