U.S.-Iranian tensions have reached new heights since President Trump pulled the United States out of the Iranian nuclear agreement, the Joint Comprehensive Plan of Action (JCPOA), last year and imposed a wide range of sanctions designed for “maximum pressure.” A number of surprise attacks against U.S. allies in the Persian Gulf can only be ascribed to the audacity and precision of Iran, according to Washington.

Trump has warned that he would use the “ultimate option” — a military strike — while Iran’s foreign minister said that Tehran would consider even a limited attack “all-out war.” At the same time, rumors swirl about the possibility of renewed diplomacy, even after Trump and Iranian President Hassan Rouhani failed to meet at the U.N. General Assembly meeting last week. My research on Iranian foreign policy suggests that there may still be a possibility to reach a stable equilibrium despite the seemingly relentless pressures toward escalation.

A possible equilibrium?

In the past four decades, some of the most significant foreign policy issues in Iran were resolved only when Tehran's ruling conservative faction grew stronger internally, while the Iranian state as a whole weakened enough to prevent its emergence as a regional hegemon. Both the 1979 Iran Hostage Crisis and the Iran-Iraq War, as I have discussed in two recent articles, ended only after such a balance was achieved: Iran’s Islamists consolidated domestically, but the state was contained regionally.

We may be close to this equilibrium once again.

From the outset, the JCPOA generated two sets of security threats that jeopardized its long-term viability: one to Iran’s internal power structure and the other to U.S. allies and the regional balance of power. Since the U.S. withdrawal from the agreement, the first threat has been largely resolved, while the second can be dealt with.

Politics inside Iran

U.S. analysis typically fails to recognize the threats Iranian leaders perceived potentially emerging from the JCPOA. The JCPOA polarized both the Iranian polity and society. It deepened Iran’s factional fault lines by helping Rouhani and Foreign Minister Javad Zarif outmaneuver their conservative rivals, particularly the Islamic Revolutionary Guard Corps (IRGC). Rouhani and Zarif viewed the IRGC’s underground “missile cities” and regional activities as an impediment to diplomacy.

Shortly before his sudden death, Rouhani’s mentor, former president Akbar Hashemi Rafsanjani, took a jab at the IRGC’s ballistic missile tests by saying, “tomorrow’s world is the world of dialogues, not missiles.” Zarif, too, said that the United States feared Iran’s soft, not hard, power since it could destroy Iran’s “entire military systems with one bomb.”

The experience of the past two years has since challenged these positions. Rouhani and Zarif are now on the defensive for having signed what their detractors consider a flawed deal that foolishly gave away the most critical aspects of Iran’s nuclear program without successfully removing the sanctions that are strangling the country.

Largely discredited, both are working in close coordination with the IRGC to leverage Iran’s regional influence for a better diplomatic bargain. The factionalism of Iranian politics in the foreign policy arena has reached its weakest point since the death of the founder of the Islamic Republic, Ayatollah Khomeini, in 1989. The JCPOA, if revived, would now be seen as an effective collaboration between all of Iran’s political factions.

Additionally, collective punishment in the form of U.S. sanctions has alienated social forces that Iranian hard-liners viewed as subversive. Many Iranians have come to learn that just as their own government has ruled and penalized in the name of Islam, so has the United States applied pressure by instrumentally using domestic and international laws as well as liberal democratic institutions.

Those who hoped that the JCPOA meant better relations with the United States now worry about their basic economic and security needs. By withdrawing from the JCPOA and imposing an economic blockade on Iran, the United States is giving the IRGC the raison d’etre that it has been seeking for over three decades, particularly since the humiliating end of the Iran-Iraq War.

This has important implications: Far from the regime breaking under the pressure of sanctions, under the conservatives, Iran internally is as cohesive as it has been in decades.

Iran’s place in the region

The second security concern that the JCPOA unleashed was regional. Although the agreement closed the path to nuclear weapons, it frightened U.S. Arab and Israeli allies — since Iran could come out of its box by lowering tensions with the United States and reviving its economy and military.

Europeans saw Iran as an untapped market — perhaps the biggest emerging market since the collapse of the Soviet Union. Major companies rushed to Tehran for lucrative contacts with the government and private entities. Boeing and Airbus signed $40 billion contracts with Iran to sell nearly 200 planes to the country’s airlines.

After the United States withdrew from the agreement, however, foreign investors fled Iran. Boeing and Airbus canceled agreements, and Iran’s economy began to shrink by 3.9 percent. U.S. “maximum pressure” policy reduced Iran’s oil exports from 2.5 million to 250,000 barrels a day.

Iran is now back in a box. Tehran’s increasing reliance on proxies and missiles as a deterrence strategy is testament to the fact that the state’s conventional capabilities are weak, with no prospect for improvement as sanctions further impoverish the nation. The long-term fear of Iranian regional hegemony remains illusory.

A new plan in the future?

Iran currently has the combination of strong internal cohesion and a weak state within the region. This opens the door to a no-frills agreement that guarantees each side’s most basic goals: Iran can continue chanting “death to America” for regime survival, and the United States can continue demonizing and containing Iran.

One possibility is for the United States to stay away from the JCPOA, but remove secondary sanctions so that other countries can do business with Iran. In return, Iran can accept some adjustments in the JCPOA and agree to extend some provisions that are due to expire soon.

Iran’s distrust of the Trump administration may not be a liability in future negotiations. It could help further cultivate the anti-Americanism that the regime needs for its domestic survival. The Obama administration, by creating an international consensus and internal divisions in Iran, had an unsettling effect on the Islamic Republic that led it to sign the JCPOA.

The opportunity for an agreement today, however, may be short-lived. Tehran’s overconfidence and Washington’s selective obsession with losing credibility could bring the two sides into a catastrophic conflict.

Mohammad Ayatollahi Tabaar is an associate professor at Texas A&M University’s Bush School of Government and Public Service and a fellow at Rice University’s Baker Institute for Public Policy. He is the author of “Religious Statecraft: The Politics of Islam in Iran” (Columbia University Press, 2018).