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President Donald Trump's surprise remark—that China can now buy Iranian oil—made immediate headlines, but also raised a few eyebrows and fresh questions.
All US sanctions on Iranian oil remain firmly in place, and the President has offered no clarity on whether his comment marked a formal shift in policy or was simply a gesture of leniency.
A confidential report from Iran’s Oil Ministry, seen by Iran International, suggests that even if sanctions were lifted, Iran is no longer capable of significantly increasing exports.
Capacity eroded
Iran exported an average of 1.4 million barrels per day (bpd) of crude oil and gas condensate to China during the first half of 2025, According to exclusive data obtained by Iran International from commodity analytics firm Kpler.
That is a drop of 12 percent from last year.
In 2017, before US sanctions returned, Iran produced about 4.5 million bpd, exporting 2.5 million bpd and consuming the rest. But domestic consumption has surged, largely due to the expansion of refineries like the Persian Gulf Star.
By 2024, Iran was using over 2.4 million bpd, up 20 percent from 2017, leaving far less available for export.
A compounding factor is the age of Iranian oil fields.
About 80 percent of Iran’s oil comes from aging fields suffering from natural decline, producing about 10 percent less with each passing year.
Burning it all
While new fields have come online, oil and gas investment has dropped to under $3 billion per year, less than half of what it was a decade ago.
“Even if all US sanctions were lifted, Iran’s daily oil exports probably couldn’t exceed 1.7 million barrels per day, due to structural limits in both production and rising domestic consumption,”, senior energy analyst Homayoun Falakshahi told Iran International.
Iran also faces a growing domestic energy squeeze. Gas shortages are forcing it to burn more petroleum products and reducing export capacity even further.
Gasoline use in 2024 rose 7 percent, diesel by 16 and fuel oil (mazut) by 29, according to the same internal Oil Ministry report.
At the same time, China—Iran’s only consistent customer—is scaling back. Last month, exports to China fell to 1.1 million bpd. Projections show little improvement this month.
Floating storage—unsold oil at sea—has hit 40 million barrels. Iran continues to load roughly 1.5 million bpd, but more of it is sitting idle.
Impact uncertain
US sanctions have tightened in recent months, targeting tankers, refineries, and financial intermediaries.
China’s small, independent refiners are now Iran’s main buyers. But these low-efficiency plants rely on deep discounts and face rising pressure. Without those discounts, many may not survive.
Trump’s statement may have been intended as a diplomatic signal rather than a real policy shift. But Iran’s ability to capitalize is in serious doubt.
With underinvestment, surging domestic demand, and shrinking export margins, even full sanctions relief may not restore Iran’s oil exports to pre-2018 levels.
For a country long dependent on oil, hopes of a post-ceasefire boom may prove more symbolic than real.
The Islamic Republic will not return to what it was before the Israeli and American airstrikes, but what comes next is uncertain, experts tell Iran International.
The experts say Iran now faces a defining choice: abandon its decades-old doctrine of hostility toward Israel and the US, or double down and risk collapse.
“It's Ali Khamenei, whose worldview is arguably at the heart of why we ended up in this conflict,” said Alex Vatanka, Senior Fellow at the Middle East Institute and founding director of its Iran Program.
Once seen as untouchable, the clerical state is now reeling—its authority at home weakened and its future uncertain, several Middle East analysts told Iran International.
“What pushback comes from within the regime?” Vatanka asked. “The policies of hardliners, of flexing muscle, having ballistic missiles, acts of resistance, fighting the good fight against US and Israel. That brought this disaster on Iran.”
Tehran failed to defend its airspace, protect officials and loyalists, or safeguard its nuclear and missile programs.
While Iran has long fomented regional instability, this is the first time in decades that war reached its own soil. That may prove a turning point.
“So the war against Israel and the United States, that was sold as something you do outside of Iran's borders. That war suddenly was happening on Iranian soil, literally in cities and towns where people live,” Vatanka said.
Change is coming
That internal tremor may not lead to collapse—but it could produce serious transformation.
“I do expect significant aftershock waves within the structure of the regime,” said Avi Melamed, a former Israeli intelligence official and founder of Inside the Middle East: Intelligence Perspectives.
“Change within the regime, not the regime change,” Melamed said. “But again, it may be that the change within the regime will result in dynamic, that will result in, at the end of the day, change of the regime.”
Meanwhile, the Trump administration is taking a victory lap. President Trump posted Tuesday on Truth Social that China can now resume buying oil from Iran—a sharp turn from his previous threats.
“China can now continue to purchase Oil from Iran,” Trump wrote. “Hopefully, they will be purchasing plenty from the US, also. It was my Great Honor to make this happen!”
Only a month after warning the world against buying Iranian oi, Trump told reporters he hopes Iran will be “a great trading nation.”
Experts say the fact that Iran and Israel accepted a ceasefire signal that neither side wanted a prolonged conflict.
Some level of political change now appears unavoidable, according to Kamran Matin, Associate Professor of International Relations at the University of Sussex.
“The kinds of concessions that Iran will be compelled to make in the likely post-ceasefire talks over its nuclear and missile projects far exceeds the political ideological constraints of the current leadership of Khamenei,” Matin said.
“He has been forced to contradict himself on major matters of national security on a rather frequent basis since October 7.”
For now, observers are watching closely to see whether the Islamic Republic—feeling weakened—lashes out internally.
On Monday, Iranian authorities executed Mohammad-Amin Mahdavi-Shayesteh for allegedly spying for Israel.
“The regime might seek to alleviate its utter humiliation by dramatically intensifying its repression of dissidents and even repeat the 1988 mass execution of political prisoners,” Matin warned.
Such a move could spark widespread protests—potentially pushing an already fragile Islamic Republic toward collapse.
The airstrikes may have ended, but the real battle for Iran’s future is only beginning. Israeli strikes shook the Islamic Republic to its core. Its leadership is bruised, its power structure exposed, and its legitimacy at home deeply eroded.
Ten days of Israeli attacks and a heavy US bombardment, has dealt the Islamic Republic its greatest challenge in its nearly 50-year history. Washington and Tel Aviv openly hint at assassinating Supreme Leader Ali Khamenei.
The shock events have Iranians watching the fast unfolding events in awe and disbelief. Inured to decades of stagnation and dashed hopes, they try to envision their country’s future with both ambition and fear. Many shudder at the prospect of a disintegrated country. Some are worried that after the war, Iran could fall into a failed state for decades, with neighbors Iraq and Afghanistan standing out as cautionary tales.
A hallmark of authoritarian states like the Islamic Republic is the dichotomy they promote to warn of such disasters: it’s either us or chaos. But Iran’s path forward could potentially buck the false dilemma.
Three scenarios
If the current theocracy were to end amid the current conflict, several scenarios could play out:
- A faction within the military may seize power and push for fundamental changes
- Exiled opposition groups could grab a role, with or without Western support
- A coalition of domestic opponents gains the upper hand
The rise of a state more hardline than Khamenei as a fourth scenario is highly unlikely but not impossible. It would likely be short-lived, as it would immediately provoke harsher US and Israeli blows and find a populace that was already terminally fed up with the ageing leader’s hardline rule.
For all their differences, these three potential successor systems would share commonalities: they would be more secular and progress-oriented, and would be all but certain to eschew the Islamic Republic’s anti-Western stance.
The system founded by Ayatollah Ruhollah Khomeini and his successor is defined by religious rule, violent repression, reactionary mentality, corruption, waste and mismanagement.
In the history of Iran - and indeed that of the modern world - few governments have concentrated so many pernicious traits within a single system.
Whichever of the three governance scenarios ultimately takes shape, it is highly unlikely that any will rival the Islamic Republic in such failings.
Even the least democratic scenario - the rise of a military authoritarian government - could potentially offer social freedoms and economic development.
Will Iran become the next Syria, Iraq?
In recent years, many opponents of the Islamic Republic resisted calls for radical change, fearing Iran could descend into chaos like war-torn Syria. Yet in recent months, Syria’s rehabilitation at least on the international scene has cheered some.
Despite his past ties to hardline Islamist militant groups, new Syrian leader Ahmed al-Sharaa aligned the country with the West and set it on a path to potential development.
US sanctions were lifted, and Syria now stands on the brink of rejoining the global SWIFT banking system. American firms have moved quickly to tap into the country’s market. The situation, however, is still fragile and US Secretary of State Marco Rubio mooted last month that Syria could promptly descend into civil war.
By welcoming Syria, the United States may be telegraphing that countries renouncing their hostility toward the West can rapidly reenter the global fold and enjoy a chance at prosperity.
A version of this model was tested in the second half of the 20th century on the Korean Peninsula, with US support for South Korea against the North. South Korea, after the Korean War, embraced Western alliances and democratic institutions - transforming it from a poor, authoritarian state into a modern, prosperous democracy.
To pull Iran out of the Chinese and Russian orbits, Washington and its allies could implement a similar approach. With Western support, Iran’s path to progress could be far smoother than the long and stifling five decades it has had under the Islamic Republic.
This model of development also resonates deeply with the aspirations of many Iranians. Weary of ideological fights, they yearn for prosperity, and seek normalcy and dignity. The credo of “a normal life” was oft repeated in the nationwide Woman, Life, Freedom protests which gripped the country in 2022.
Iran’s young generation, the main driver behind the movement, represents a major part of this potential.
Since 1979, it has been the only group to successfully force the clerical establishment into a concession - over the enforcement of hijab law - thwarting one of the system’s main social agendas. This same generation is unlikely to submit to another dictatorship seeking to replace the Islamic Republic.
Forerunner, not a follower
Some Iranians worriedly caution against potential instability in Iran’s future, citing Iraq’s turmoil after the U.S. invasion in 2003. Yet Iran itself fomented much of that strife. It is unclear who would have such an interest in undermining a future Iranian society. In recent decades, some of Iran’s neighbors in the Persian Gulf have put development over ideology.
While in Saudi Arabia and the United Arab Emirates, rulers have sought to modernize their hidebound societies, in Iran under the Islamic Republic, the logic of religious rule at home and confrontation abroad reigns still prevails.
The 1979 Islamic Revolution marked a pivotal moment in the region, steering many nations toward Islamism and religious extremism. The wave took over Saudi Arabia and cascaded to other nations.
“What happened in the last 30 years is not Saudi Arabia. What happened in the region in the last 30 years is not the Middle East,” said Saudi Arabia’s crown prince, Mohammed bin Salman in 2017 as he pushed through modernization efforts.
A democratic Iran can serve as a powerful new model for the region, inspiring other nations to move toward more open and accountable governance.
The question of succession has taken on new urgency in Tehran since Israeli missile strikes began and the Supreme Leader Ali Khamenei reportedly moved to a secure location as he was threatened by Israeli leaders and President Trump.
But is he truly preparing to loosen his four-decades grip on Iran?
Khamenei has named three senior clerics as potential successors in case he is killed during the war with Israel, the New York Times reported Saturday, citing Iranian officials familiar with his emergency war plans.
Last week, Iran International reported that the 86-year-old leader has delegated authority to the Revolutionary Guards’ high command, effectively empowering the IRGC to manage critical decisions if he dies.
While these steps fall short of a formal emergency decree, they suggest an extraordinary contingency effort as missile exchanges between Israel and Iran enter a second week. Khamenei’s move appears aimed at ensuring continuity of command in the event he is incapacitated or killed.
Defiant messaging, emergency measures
Following the leader’s line, President Massoud Pezeshkian also ordered cabinet ministers last week to delegate some authority to deputies and senior managers.
Yet even as both leaders brace for escalation, Khamenei struck a defiant tone on June 18.
“Normal life is going on in Iran,” he said, rejecting retreat in what appeared to be a response to U.S. President Donald Trump’s call for “unconditional surrender.”
If the IRGC power-sharing reports are accurate, they could mark one of the most significant shifts in Iran’s post-revolution political order. For nearly four decades, Khamenei has centralized power—political, religious, military, and economic—around his office.
A legacy of control—and a quiet succession talk
Even Iran’s clerical seminaries, once independent and funded by religious donations, now fall under state control. Since 1989, Khamenei has turned clerics and seminarians into government employees, paid by his office and subject to dismissal if their loyalty is questioned.
As commander-in-chief, Khamenei exercises unilateral authority over military matters, bypassing the Majles on decisions of war and peace.
He also controls the state broadcaster IRIB, directing both leadership and editorial content. His office oversees several Tehran dailies and scores of newspapers nationwide—all part of a state-aligned media network.
Khamenei’s economic vision, framed around his concept of a “Resistance Economy,” has similarly concentrated power.
Though cabinet ministers exist, all major financial decisions—especially the annual budget—are dictated by his office. Massive state-linked economic conglomerates dominate the landscape and stifle the private sector.
In recent years, he has further sidelined parliament, issuing implicit directives that override legislation and block ministerial impeachments.
Succession has long been the Islamic Republic’s most sensitive—and unspoken—question. Few dared to discuss it openly. But in recent years, and especially in the current crisis, the topic has crept into public discourse.
Khamenei’s son, Mojtaba, is frequently floated in both establishment and opposition circles, though never officially acknowledged.
The Israeli strikes have made the issue more urgent.
One can imagine the question of who—or what—comes next, and whether that includes a possible thaw with the United States, being debated in private among Iran’s ruling elite. But no one dares say it aloud. Not yet.
Hezbollah chief said this week that the group will not remain neutral in the Iran-Israel conflict.
May Farhat reports from Beirut on hopes and fears of ordinary Lebanese.
