America and Iran may be on the cusp of a workable nuclear deal that will prevent Iran from having nuclear weapons while preserving Iran’s ability to enrich nuclear fuel for its civilian nuclear power program. But there are two spoilers out there: Israel and Europe.
The original Iran nuclear deal, the Joint Comprehensive Plan of Action, between Iran and China, France, Russia, the U.K., U.S., Germany, and the European Union, allowed for United Nations “snapback sanctions,” that could be triggered by any of the parties (up to 18 October 18 2025) if Iran violated its commitments.
Europe has been on the sidelines of the recent negotiations, but it may try to influence events, and improve its relations with President Donald Trump by supporting a hardline position, but imposing snapback sanctions on Iran but may instead have the effect of “derailing diplomacy entirely and plunging the Middle East into deeper crisis.” Aside from hurt feelings, Europe may be motivated by concerns over arms transfers from Iran to Russia amid the Ukraine conflict, but its influence in the current nuclear talks remains limited.
Some voices in Israel and the United States remain skeptical of any agreement with Iran that allows significant nuclear enrichment, favoring a more restrictive framework to prevent future threats. Though many Israelis and Americans believe Iran wants to wipe out Israel, the real game is economics, and Tel Aviv’s catastrophe marketing is to keep the Americans focused on Israel’s concerns instead of following their country’s long-term interests to Asia.
While Iran’s Supreme Leader, Ayatollah Ali Khamenei, would not mind if Israel fell into the sea, he won’t do anything to ruin the economic empire he oversees, the charitable trusts (bonyads) that allegedly control 20% to 50% of Iran’s economy, though Khamenei’s office says the number is 4%, down from 8% in 2020. Likewise, the Islamic Revolutionary Guard Corps (IRGC), may control one-third to two-thirds of Iran’s economy, a control that was facilitated by decades of Western sanctions on the Islamic Republic.
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Whatever the true numbers, the bonyads and the IRGC probably have influence over 100% of Iran’s economy, but piety will take a second place to economics and God’s punishment for disbelievers will be put off for another day.
However, Iran’s religious leaders' class will be wary of foreign direct investment (FDI) if they sense it carries the potential to weaken Vilayat-e Faqih (“Guardianship of the Islamic Jurist”), the justification for Iran’s theocratic system.) And the country’s secular oligarchs will also want to secure their franchises and be the partners of choice for foreign investors.
There are two native sources of science and technology in the Middle East: Israel and Iran. If Israel can keep Iran isolated, sanctioned, and weak it will collect a greater share of FDI that would otherwise flow to Iran’s vastly larger market of 90 million people. (Israel’s population is 9 million.)
Iran’s scientists and engineers have, under threat of sanctions and assassinations, built an advanced nuclear program, a skilled hacking force, and “the region’s largest arsenal of conventional ballistic missiles,” according to the U.S. Strategic Command. With that pedigree, investors will definitely be interested in Iran’s frontier markets, though decades of Western sanctions will slow North American and European businesses from gaining a foothold.
Iran’s neighbors, not surprisingly, want a healthy Iran as it is a potential business partner, tourism destination, and a regional transit center, and they will not tarry. Iran’s neighbors in West, Central, and South Asia don’t suffer from the “1979 hangover” that afflicts the U.S., and they understand it was America’s 1953 coup against the elected government (after it demanded an audit of the Anglo-Persian Oil Company) that stunted Iran’s political, social, and economic development and is the root of the ongoing crisis.
Iran has long had tense relations with its Arab neighbors, but more in the headlines lately has been Iran’s improving relations with the states of the Persian Gulf.
In 2023, Iran’s then-president Ebrahim Raisi visited Saudi Arabia, and the Saudi crown prince, Mohammed bin Salman, accepted an invitation (but has not yet visited Tehran.) Foreign ministry and defense officials, including the Saudi defense minister recently visited Tehran, and meetings between Iran and the United Arab Emirates have picked up.
Iran reopened its embassy in Saudi Arabia, and businessmen from Oman, Saudi Arabia, and the UAE are sizing up opportunities in Iran. Total non-oil trade between the Gulf Cooperation Council countries and Iran was $26.41 billion in the fiscal year ending in March 2023, and Steve Witkoff, President Trump’s advisor says the region’s market “could be much bigger than Europe.”
And because the region doesn’t need another American war of choice, the leaders of Qatar, the UAE, and Saudi Arabia recently told Trump they oppose an attack on Iran.
But goodwill aside, Mohammed bin Salman is keeping the pressure on Iran, maybe as a favor to Trump, and to help his own position in bilateral negotiations with Tehran. And Witkoff may be overstating things, but the region has great potential, and Iran will be part of it.
The "Look East" policy was first launched by President Mahmoud Ahmadinejad in 2005 to improve relations with Russia, China and India to counter Western pressure over Iran’s nuclear program and improve Iran’s economy. The policy was continued by Ahmadinejad’s successors and has broadened its focus to Central Asia.
Trade between Iran and Afghanistan is at a low level of about $3.2 billion, with Afghanistan's exports to Iran at $54 million. As both nations are under heavy sanctions, trade may not increase much unless the two trade in local currencies.
Iran has other pressing issues with Afghanistan, such as the return of over 3 million Afghan refugees, and tensions over the 1973 Helmand River Treaty, though the Taliban government said it would continue to supply water to Iran without a treaty.
In 2023, Iran-India trade totaled $2.2 billion, with India exporting mostly foodstuffs and Iran exporting mostly chemicals and mineral products. India has invested in Iran’s Chabahar port, though in February 2025, the U.S. ended the sanctions waiver. The Indian company that runs the port has announced expansion plans, nevertheless, as India relies on the port to trade with Central Asia, Afghanistan, the Caucasus, and Russia via the International North–South Transport Corridor.
India has the potential for more trade with Iran, but must consider its relationship with Washington and will likely prioritize that as it seeks to restore the sanctions waiver for Chabahar port.
In 2023, Iran-Pakistan trade totaled less than $950 million. Iran exported $943 million of goods, mostly liquified petroleum gases and mineral products; Pakistan exported $9.97 million of goods, mostly construction vehicles, to Iran. Pakistan’s prime minister wants to boost trade to $10 billion in the coming years, but Pakistan’s internal dysfunction and India’s prime position at Chabahar may slow that.
On 15 May 2025, a free trade agreement between Iran and the Eurasian Economic Union (EEU Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan) came into force and should lift the region’s low trade of $1.6 billion.
In June 2023, Uzbek president Shavkat Mirziyoyev met Iran’s then-president, Ebrahim Raisi, and Iran’s supreme leader, Ayatollah Ali Khamenei. (In September 2022, Raisi declared that improving relations with Central Asia as “one of the first priorities of the foreign policy of the Islamic Republic of Iran" in 2022.) The meeting netted cooperation pacts in agriculture, energy, customs affairs, sports, science, technology and innovation, cultural exchanges, health care, Chabahar port, the environment, industry, and tourism. It was the first visit to Iran by an Uzbek leader in over 20 years.
The June meetings were the follow-up to the March 2023 visit by Uzbekistan’s foreign minister, who met Iran’s ministers of Foreign Affairs, Industry, Mines and Trade. Afterwards, the parties announced efforts to increase trade turnover and to foster business links and people-to-people ties. The ministerial meetings were built on the September 2022 visit by Raisi to Uzbekistan, which produced 17 agreements in areas such as energy, transport, and agriculture, and discussed how to increase trade.
Iran wants to increase trade with Uzbekistan four times to $2 billion (it was less than $520 million in 2023); Kazakhstan and Tajikistan will go to $1 billion each; deals with Turkmenistan will jump by 30%. (Tajikistan is alongside bigger Kazakhstan and Uzbekistan because it and Iran share language and cultural ties and a defense cooperation agreement, and Iran has located a drone factory in the capital, Dushanbe.)
Tehran and Tashkent intend to develop a transport corridor through Turkmenistan, which Mirziyoyev first discussed with Turkmenistan’s president Serdar Berdimuhamedow in October 2022. (Transportation cooperation between Tashkent and Ashgabat started in 2017 with the opening of the Turkmenabat-Farab railway and car bridges that will link the countries and open opportunities for long-distance trade.) Raisi pledged, “The Islamic Republic of Iran is able to easily connect Uzbekistan to high seas via Turkmenistan and Afghanistan.” And Nargiza Umarova of the Institute for Advanced International Studies In Tashkent notes, “Tehran plays a key role in the formation of the Eurasian land bridge to connect China and Europe by railroads.”
Iran is hydrocarbon-rich and Turkmenistan’s second-largest trading partner after Russia, and the two countries recently agreed to a roadmap to achieve $3 billion in trade (Trade totaled nearly $600 million in 2024). Also planned is an increase the annual volume of cargo transit between the two countries to 10 million metric tons by the end of 2027
In 2024, Iran and Turkmenistan agreed to construct a new 125-kilometer natural gas pipeline,
and Turkmenistan will deliver 10 billion cubic meters of natural gas for shipment to Iraq, eventually rising to 40 billion cubic meters annually. Iran has a deficit of gas for its development plans and needs $45 billion investments to boost gas production.
Trade between Kazakhstan and Iran is low, just over $300 million annually. Kazakhstan exports mainly agricultural products, and Iran exports mainly foodstuffs and industrial chemicals.
In February 2025, the sides signed several agreements to boost trade and Astana declared it was ready to supply Iran with 75 types of products valued at $250 million.
Iran is increasingly attractive to the landlocked Central Asian republics that are seeking redundant trade routes. In June 2021, Tashkent hosted a conference to highlight Central Asia-South Asia connectivity via Afghanistan and Pakistan. Two months later, the U.S. and NATO retreated from Afghanistan and the country plunged in chaos, so the republics had to consider alternatives.
Central Asia can now consider trading through Iran’s ports of Chabahar and Bandar Abbas. (In January 2022, Iran and Uzbekistan concluded an agreement to give Uzbekistan access to Chabahar port on the Gulf of Oman.) Iran can offer a large internal market (over 90 million people, 68% under 35 years of age), a space free of the violence by the Islamic State and Al-Qaeda and the Pakistani Taliban that plagues Afghanistan and Pakistan; organized and functioning government agencies; and ports adjacent to the markets of India (Chabahar) and the Persian Gulf (Bandar Abbas).
The U.S. has promoted the Middle Corridor to the republics as an alternative to Russia’s Northern Corridor, but avoiding the Southern route via Iran or Afghanistan-Pakistan, ignores the fact that the republics of ready access to Asia and the Persian Gulf. The republics are not burdened by Washington’s sense of grievance against Iran that has festered since 1979, especially as there would be an economic cost of joining Washington’s campaign against the Islamic Republic, with no offsetting benefits other than a thank you for “doing the right thing.”
The republics want a reliable partner who can also help them deal with instability in Afghanistan. Iran shares that interest and has no territorial aspirations in Central Asia, though it will seek political support from the republics in fora such as the United Nations, as it implements its “Look East” policy and seeks a larger regional role through groups like the Shanghai Cooperation Organization (SCO). (All the republics, less Turkmenistan, are full members of SCO; Turkmenistan is not a member but attends SCO meetings.)
Recently, the region has seen an unfolding of transport projects that cross Iran. Among them are:
- The International North–South Transport Corridor, a 7,200-km long multi-mode network that spans India, Iran, Azerbaijan, and the Russian Federation. The corridor will rely on Chabahar port in Iran and will allow Tehran to solidify its ties with Moscow and Delhi.
- In May 2025, Iran and China launched a railway route from Xian in western China to the Aprin dry port near Iran’s capital, Tehran. The route will reportedly cut travel time from 30 days via sea to 15 days and will avoid the Strait of Malacca and the Hormuz Strait, chokepoints the U.S. Navy hoped to exploit in future conflicts.
- Iran’s Rail Ministry intends to build the Iran–Afghanistan–China corridor, likely through the Wakhan border.
- Also in May 2025, representatives of China, Kazakhstan, Uzbekistan, Turkmenistan, Iran, and Türkiye met to plan a new transport corridor. In January-April 2025 container traffic along the China-Iran route via Kazakhstan increased by 2.6 times compared to January-April 2024, demonstrating growth potential of the new transport corridor.
- The Istanbul–Tehran–Islamabad railway, a 6,500-kilometer rail link was launched in 2009, stalled, then revived in 2021, but poor railway infrastructure is still a hurdle.
If the West, particularly the U.S., wants the region to be come wealthier and less susceptible to the influence of China and Russia, it should support the projects through the World Bank and the other multi-lateral development banks instead of sniping at projects that involve Iran. Damaging the prospects for Central and South Asia will sow mistrust of American intentions, reinforcing a belief that America has a bias for short-term thinking at someone else’s expense.
By James Durso
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