The Deal-Maker's Dilemma: Richard Nephew

juncture than the Iranians.

I'm host Michael Allen with Beacon Global Strategies. Today I'm joined by Mr. Richard Neffew, a senior research scholar at Columbia University, and the former director for Iran at the National Security Council. Mr. Neffew joins us today to discuss the latest in Iran, including the possibilities surrounding the ongoing ceasefire agreement.

Stay with us as we speak with Richard Neffew. Richard Neffew, welcome back to "NATSEC Matters." Thanks very much for having me. I was going to talk to you. Thank you.

Richard, we spoke before the war.

“I think both of us were convinced that the president was going to initiate hostilities.”

We're going to get to a lot of topics today, but I wonder if you might sort of grade the military campaign so far and where do you think we stand? Look, I think kind of is, I would have expected the tactical sophistication and brilliance of the campaign. I don't think it can be underestimated, I mean, I think you see that there have been thousands

of sorities, we've had cooperation, coordination with allies and partners in the region. That's not an easy thing to do, there requires a lot of sophistication. We've had a significant, you know, a traditional effect on the IRGC, its ability to fire missiles and drones and those sorts of things. We've obviously seen the Iranian Navy is no more, which is a significant outcome in its own

right. And I think we've demonstrated to the Iranians that we can reach out and touch them in a variety of ways that they may not have anticipated and that we're prepared to do so with the variety of different tools that are disposable. So from the tactical operational standpoint, personally speaking, I am not surprised by the

sophistication of what we've seen, the effectiveness of what we've seen, but it almost underscores the big questions that still remain about the strategy and the objectives and whether or not you can square up what we have done with what we were aiming to do and what we have left to do so that way we can decide that we've achieved what we were, you know, setting out to achieve.

“Those were just for fundamental issues, you know, I think from where I stand.”

Yeah. I hear you. Okay, so tactical brilliance, the military seems to have achieved a lot of objectives. Let's talk about the nuclear files.

So we'll get to the HEU in a second, but are we in a somewhat better position in the

sense that when you consider the June 12th day war and today, these rallies in the United States seem to have degraded about every scientist or every R&D facility, which I'm sure had something to do with either ballistic missiles, but probably nuclear weaponization. We've hit some other of the nuclear sites again and again, not totally sure what's going on there.

And they've hit a lot of ballistic missiles. So when you think of the Fizzile material, the weaponization and the delivery system, it seems like this has been a good outcome, strictly speaking about the nuclear file. We'll get to the missing HEU and pickaxe mountain in a second, but how would you grade it?

Well, it's an incomplete, if we're not going to talk about the HEU and pickaxe and other such facilities. Let me look, the way I've been characterizing this is, you know, Iran has functionally now two programs, right? It had the basic, you know, from dirt to weapons programed, you know, it's fuel cycle

facilities that were badly damaged, if not fully destroyed, in the June campaign, in which have have only been attacked more over the course of the last, you know, several weeks. I mean, that program has been badly damaged, mold destroyed, you know, it would take a significant effort to try and reconstitute it.

“Now, I think, you know, US government estimates going back for years had been, it would”

take one to two years to rebuild that program, even if it was completely removed and that goes to latent technical knowledge. But, you know, still that, that is significant in terms of Iran's operational capacity. Then you've got the other part of the program, which is their ability to rapidly move to weapons, which is where we have to talk about HEU and pickaxe and Esfahan tunnels and

all those sorts of things. I will say, in terms of scientists and so forth, it's actually hard to tell, at this point, what damage has been done to the scientific community and I was down to levels one, you're not hearing as much about, you know, raids that have killed AEOI, the topic energy organization

You're hearing a lot about universities and laboratories and workshops being destroyed,

“but it's not actually apparent to me that that has degraded the technical capacity, the knowledge”

base of the Iranian nuclear program. Right. And, you know, that means that they've still got the ability potentially not only to reconstitute, but to bring that into weapons dimension from that, that HU and those other parts of the program that that's still remain out there.

Okay. All right. Well, incomplete, great. All right. That's fair.

I consider it degraded, but they're definitely other big questions out there. So let's take them one by one. So at the end of the 12-day war, it was widely assumed that the so-called missing HEU was almost irretrievably buried. And that was as far as I knew until maybe six weeks ago when the New York Times reported

something to the effect of there's a narrow corridor to be able to get it. It's still buried. It's still be tough to get, et cetera, et cetera. Is that your sense of how this evolved? We obviously don't have access to intelligence like we want to do.

But giving a sense of this missing HEU and where it came from. Yeah.

So basically, what we thought at the end of June was that Iran probably had HU in three

places at the former Richmond facility at Fordo. Now this is the big mountain that was destroyed the massive ordinance penetrators dropped by the B2's back in June, that they probably had some HEU at the underground enrichment holes at Natans. So these are the ones that back in 2002 where it started this whole thing when those very

big bunkers were being discovered. And then we thought the lion's share of Iran's HEU probably were in the tunnel complex built at a place called Isfahan, which is also a major Iranian nuclear site. Those tunnels were actually built, frankly, two store Iran's rich joining them. That was their purpose.

Now what we had understood is because of the geology, the United States military wasn't able to attack those tunnels in the same way we were fordo in Natans. So instead what had happened both by the Iranians and, frankly, the U.S. was to try and fill in the entrances to those tunnel complexes so that the Iranians wouldn't be able to gain access to it.

And the question had been since June all the way until now, have the Iranians been able to get access back to that HEU.

“And I think that's where there are still a lot of questions.”

You know, I think that there are people who would say, no, we don't have any evidence that they have. There was also reports though, even right before this current conflict, that there was a large delivery of blue containers that could have been additional HEU that were being put in the tunnel complex.

My own sense coming to the chase is that I think probably most of Iran's HEU is in that tunnel complex that Esfahan that probably remains very difficult for the U.S. military to get either through airstrikes where it's again, it's too deep, it's too buried by running geology and so forth, or through, you know, putting, you know, forces on the ground. And so really, this is part of the reason why the President keeps talking about the way

to enforce Iran, not getting to go up and sister maintenance surveillance over that site, and then remain vigilant to attack it if we see the Iranians going for it. But in my opinion, that's a high risk maneuver, it may be where we are, but that is not comforting when you think about what the Iranians could do with that stuff. Yeah, I don't love it either.

Okay. So what could we do about the HEU? So we could mount a raid, I've talked to a bunch of uniform military, including General

“Jovo Tell on this podcast about six weeks ago, where I think he basically said, "It's”

possible to do it." It's very high risk, if I'm not mistaken, I think his percentage was, you know, maybe 50/50, or, you know, it's just going to take a lot. So that's one option. Then as you mentioned, the President has said in the address of the nation, we can stare

at it through satellites, and if we ever see anyone approaching it, we'll just blow them to smithereens.

And then the third is convince them at the diplomacy table to either ship the HEU out of

the country, which seems really unlikely, or maybe to downblend it, which maybe is more face-saving for the Iranians, because they're not losing the HEU per se. So is that how you see our options for the HEU? Yeah, basically, and I think obviously I'll defer to any of our, you know, former military colleagues is to what their estimation would be.

I would just say that high risk maneuver is basically, I think the sum total of the analysis that I've seen, you know, some folks are a little bit more skeptical, some folks are a little bit more gung-ho. Frankly, that doesn't surprise me either from my experience in working with our uniform

I think the big issue that everyone keeps flagging is the amount of people would require,

and the risk to be required. And this is not special operators, this isn't James Bond dropping in and getting this stuff. You know, you're going to need a lot of people, you're going to need scientific expertise potentially to characterize this stuff. We don't know what's in those tunnels, are the Iranians playing the IEDs.

So the military options at this point are rough, right? And, you know, it's not the thing you want to do in a contested space. It's worth noting that we have removed material before, right?

“But not in a contested space, and that's, that's why it's a strand of other things.”

Yeah. Exactly. And some of those operations in Iraq and Libya to get ready, yeah, that's true. Yeah, they're examples, but, you know, again, not usually while you've got the IRGC firing missiles and drones at you in those, well, that cause extent thing was a very big

deal. Okay. So, we might have HSU at each of these facilities. Okay, fine. I kind of thought four hours are irretrievably destroyed in the times more or less, and

it was mostly an S-Fahant.

But let's talk about the second thing I wanted to mention, which is pickaxe mountain,

is best I can tell. Well, first of all, please describe it for us, but best I can tell, I haven't seen us ahead it. And I'm not sure why. I wouldn't have even tried.

Go ahead. Well, so, you know, basically it's a new tunnel complex that's being dug near in the tons. It hasn't been declared fully. And so, we don't know what the writings were intending to do it, that there was suspicion.

You may remember back in June, that the Iranians said they were about to announce a new nuclear facility in the IEA was going to go take a look at. There was suspicion that this was it. Subsequently, the Director General, the IEA, Rafael Grossi, is said, actually the additional enrichment facilities of it was at S-Fahant, which, by the way, makes me incredibly nervous

about what might be going on in those tunnels as well. That speculation, but I'll flag it as speculation that is anxiety inducing.

“I think the, you know, the most logical story I've heard for pickaxe was that it was intended”

to be a much more very protected geologically safe bunker installation for either nuclear material storage or for enrichment operations since the Iranians knew that then a tons bunkers, the original ones were vulnerable to U.S. attack. I mean, that, that had been long established, and I think everyone knew that Iran, you know, elsewhere.

But, you know, at this point, you know, I think part of the reason why we might not have been is because there's a question as to what that actually achieves, especially if you can't penetrate, penetrate those kinds of spaces. Part of it might also be that U.S. intelligence shows that there isn't something significant from a nuclear standpoint in there. It might just be a big tunnel that's been dug at this

point now, and that there's nothing particularly relevant there. But it is one of those things that I've had in my checklist, too, you know, when are are we going to see some kind of resolution of that facility? Okay. All right.

So I think that covers a lot of the nuclear things that we're worried about. I mentioned the delivery system, but I mean, more or less don't we agree with the estimates that two thirds have been degraded or they're about in terms of realistic missiles and we've hit these underground cities, and they're trapped in there, something like that. Yeah.

Something like two thirds. Sorry. Something like two thirds.

“But this is where I think we do actually have a little bit of ambiguity that's still”

important, which is, you know, how much of these attacks then, but on the missile forces, just locked in missiles or destroyed missiles, meaning, you know, in one case, you know, missiles and launchers and the associates, they're equipment. If they're just locked in, well, then that's an excavation exercise that the Orion is going to undertake.

Potentially, you know, doing so undercover, especially for a lot of these facilities are buried underground. If on the other hand, it's destroyed, well, then that's harder for the Orion is trying reconstitute. I think what to me has, you know, kind of shown through is that there wasn't an initial

set of significant losses, and that probably did, you know, ultimately resulting a lot of

the curtailment of Orion and missile related launches. But that now it's proven more difficult for us to identify those missiles before they're able to, you know, conduct a launch, and we don't know what the Orion is doing to cease fire now. So I absolutely agree, there has been a tradition.

There are almost certainly fewer launchers available than at the start. There are definitely fewer missiles because, if no other reason, then they launched a bunch of them. But what the remaining number is and whether out the Orion has the ability to launch them and evade defenses, that remains, I think, uh, both a problem, but also kind of an

I know, at least in the outside. Yeah, I hear you. Okay. Were you surprised that the president decided to initiate the peace talks or the the Pakistani talks when he did because, well, I allowed for it, but honestly, I thought we were getting

into territory where he had promised to hit energy so many times.

But no, he, once I saw that Pakistani tweet come out on that afternoon of where he's inviting the parties to come in, I was like, well, this has been staged. This is, you know, we're going straight to, we're going straight to talks.

“But what, what was your, how did you feel about all that?”

I, I think I had the same reaction as you, that, you know, at one point you were seeing the, the, the energy cascading and the direction where you were going to see some very significant strikes in the US and potentially, you know, ones that, you know, would have targeted civilian infrastructure in a very big way. I, I will say, a sense that I had gotten over that 24 hour period since he started issuing

those threats, especially given the number of, you know, both political actors here in the United States, but also internationally that we're starting to register a, hey, this is going to be really bad, um, not, not just in the, in the, in the, in the specific sense in terms of the effects on Iran, but what Iran will do in, in exchange, that I was less surprised that in the end, he, he took the door that was, was marked form and took it out.

But part of that's because I, I, I continued to believe that he thought this was going to

be a real quick op and that he's been looking for the exit site, basically, week two.

I have credited these newspaper articles that say, especially when it comes up, well, why didn't you do more on the, or expect even the straight-of-war moves that he thought they would have capitulated by now?

“I mean, Steve Whitkoff has already said that, too, and, um, so I think that's part of it”

also. Okay. So here he rolls into talks, now you attended hundreds of meetings with the Iranians in your capacity, um, as an negotiator and one of the chief advisors to the Obama era J.C. P.O.A. So you knew, well, like I knew, that we wouldn't come out with anything big

and some sedative over the weekend, but nonetheless, what, what grade, grade, how that went? What do you think? Well, like you, I mean, to get my expectations were pretty low. I think a lot of people thought that there was going to be a thing, and I was pretty skeptical. I guess I was a little surprised that Vance came back as fast as he did, but I will say

that may reflect a desire to change some of the Iranian tactical positioning, I mean, that they have for many years, tried to keep us involved in talks and keep us in the room and

talks and just, you know, never end that process as a way of, you know, both buying themselves

times in space, both so trying to explore the edges and see how far they potentially get. From that standpoint, frankly, I thought, tactically, it wasn't the dumbest thing in the world to leave Islamabad and leave with the message being, you know, we don't think you're serious. We're going to go.

Now, whether or not the Iranians are serious and that's at the decide from a tactical standpoint, I actually think that's not a bad idea to try and set the context.

“I think in terms of what we've heard come out of those talks thus far, it kind of reaffirms”

where my head's been for a while. We're just not close enough on substance to see any credible path to try and get to a real comprehensive deal. Now, a framework thing. Yeah, I mean, that was being, you know, kicked about last year, you know, a framework for

future talks, something to kin, maybe to the joint plan of action, which, you know, at this

point, it's been a little bit lost in history, but it was the, the, the, the, the first

go at a deal with the Iranians. And it basically was what we operate under while we were negotiating the JCPOA. I could have seen that. I still can kind of see that. But I imagine that now it's going to be a lot more direct around ceasefire and straight

form those operations than nuclear controls, which at the time was what we were, you know, most focused on the JPOA era. So I think, look, that I don't think that the process is finished. Yeah, I, I think there's plenty of reports now that they're still talking. I think the real problem ultimately is we still seem pretty far apart.

You know, if the president is actually saying he doesn't think of 20 year moratorium, which is what we were asking for the Iranians that no two is long enough. Well, the, we're not even really in the same room. We're, we're pretty still far apart. Yeah, I totally agree with you.

I mean, we'll get to this in a second. But my own view is that we're just going to get into a situation where they renew by default a ceasefire situation. But let me ask you, or what you may have just answered then, do you think the ceasefire is going to hold?

Yeah, I, I don't think you see any indication that President wants to flip this thing back on. Especially, I mean, you know, again, it's a, it's kind of weird ceasefire, right? I mean, there's active hostilities still engaging in Lebanon. There are reports of, you know, explosions in Tehran that may not be from, you know, F35s,

but nonetheless, you have a active blockade. You have threats against ships that still are constraining shipping activity on the streets. This isn't a great ceasefire from that standpoint. But as it is, I think you could imagine this persisting for quite a period of time.

Okay, so let's get to the blockade.

and the sanctions, you understand the insurance industry around the energy.

And it was more or less just the prospect of the Iranians continuing or hitting oil tankers that led Lloyds of London and others to say, "Listen, we're not going to, we're not either, we're not going to ensure this, or it's going to be at such a high cost that you don't want anything to do with it." So, can you help illuminate these issues?

I mean, we're trying to re-establish the confidence of the world that the straight is now traversable. But how are you going to convince commercial insurers and does your gut tell you that they're

“going to take a shot again, or, you know, what do you think?”

Are they going to get frustrated in this in a couple of days and say we're losing the leverage that we had, which was a gift, and we can't do that? Yeah, it's actually exactly what I think it is.

And the Iranians have been today saying, basically, now that our ships are being turned

around, you know, we are going to consider a break in the ceasefire and watching our strikes again, and that we're prepared to do so if ships continue to be stopped. So I think this is part of the reason why the blockade, I've described a lot of the decision making over the last few weeks from the United States as being incrementally logical, but inconsistent with the broader strategy.

And this feels like another example of that. The president wanted to get a deal in his obvabod, he didn't get it. So he incrementally says, let's turn up the heat on the Iranians for a blockade. I mean, you can see why we went from A to B, that makes some degree a sense. But if the original ambition in the talks was to get traffic throwing through the straits,

establishing a blockade that, therefore, put a lot of pressure on Iran, while the Iranians

still have physical capacity to attack shipping going through the straits is not going

to result in the straits getting unblocked. Now, it creates straits base, perhaps, where, you know, now the United States can say, we'll release the blockade if you release the straits or more moves, but it's worth putting it out, you know, the original US approach in the deal was in the negotiations was to also attack on nuclear and missile and other things.

We've now actually ourselves potentially shifted the trade space of the talks between, you know, just how we're going to have people, you know, traversing maritime passage, not at all, these other big sorts of issues.

“And so I think, and I could be wrong here, but I think the Iranians will give this another”

day, maybe another two days. We've got that level of patience, they're going to see whether or not smuggling an evasion works. And if it does, well, maybe they'll let this go a little bit longer, but if it doesn't, and if they really are starting to get jammed up, I think you're going to see maritime

attacks coming from Iran again. You might see then say we're prepared to break the ceasefire because the ceasefire is not being implemented. Yeah. So you're side, whether or not it was being implemented anyway.

And they'll test the United States in that regard and see what the US will do. That's amazing. So, the ceasefire won't hold after a few days if this is successful. Okay. So they might hit a tanker or target a tanker or saber rattle that they're coming

back at it.

“What about, are they going to continue or resume hitting the UAE, Saudi, other Gulf Arabs?”

And if they do, I assume it'll be their energy infrastructure. Well, they certainly could. I think the Pakistanis have taken some steps in terms of basing troops and engagement to posture themselves with Saudi Arabia that now make it a little bit harder for the Iranis to take a swing at the Saudis, but that isn't necessarily applied to buffering or to UAE

or Qatar. But this is where part of the reason why I think the ceasefire is going to be extended is going to come back to that. I actually think when the Iranians start taking swings again, you're going to see us and them tack back towards, maybe we actually do want to ceasefire.

Now what that requires is then a softer version of the blockade perhaps, you know, maybe it's something that, you know, involves some amount of shipping getting through, maybe it's a more formalized agreement that, you know, they will open the straight if we open the blockade. This is where what I think this has become now is a very transactional, including evolving

violence interaction and negotiation with the Iranis. I mean, you know, Secretary Heggseth, when he said we negotiate with bombs, I don't necessarily agree with the way in which he was putting it, but in a de facto way that may be, in fact, what we're doing now is that we in the Iranians are going to start staking ourselves on tactical military positions that will then potentially contribute to a ceasefire that's

closer to what I think the President thought he was getting a week ago. It still doesn't mean fundamental resolution or problems and still means in the meantime, you potentially have attacks on UA and ships in similar, but that may be the arc that this

So the arc is very likely that they're going to strut their stuff again and take some

shots, but we're both going to walk back from the break. That is my, that is my inclination. That is how I see this going.

“And this is part of the reason why I think the long arc of this is going to be a straight”

and overall waterway system that is more at risk, more turbulent, more militarized. There's going to be greater risk premiums. So for everyone who's doing insurance and buying oil and petrochemicals and that kind of stuff ship owners, you're probably going to have higher costs associated with all those things, but that there will be some movement as a result of all this.

And if this ceasefire is to remain durable over a period of time, okay. So I think this is where we converge, we're either going to get to a de facto transactional as you called it ceasefire, which involves, don't hit our ships in the straits and we'll quit, we'll make sure we're not hitting your mainland anymore. So either de facto we're formal one and then maybe framework, because there's no, I think

that I totally agree that there's just a million miles between where the Iranians are and

where we are on the fundamental issues of the day.

“Yeah, I think as long as we are all holding to our lines and that we're like, we always”

have to allow that 5% chance of some sort of dramatic change of heart, either out of the US administration or out of the Iranians. I'll be honest, I'll put my money on a more dramatic change of heart coming from the United States at this juncture than the Iranians. In part because, you know, look, the president is variously said over the last not only this year, but even in the past.

You know, the concept of Miga, right, make around great again, let's see what we can get business deals going, let's see what we can get trade deals are going.

So it's not even conceivable to me that you could see him offering very significant sanctions

relief so much so that the Iranians could accept something more concessional when it comes to the nuclear program, especially because we were talking about, they don't have much of a nuclear program anymore at all. I think the hangups of HEU, the hangups of whether or not missiles are involved, those are

“big issues. And I think that's why ultimately I still think, yeah, we're going to get a framework”

deal and not much more. But, you know, my 5% scenario, it allows for some significant concession that unsticks some of these other things in the short term. A blockade could still work on Iranian ports, right? Well, it can definitely have the impact of, you know, drying up Iran's ability to export oil for sure. It can have any impact in terms of stopping Iran from importing things that it needs,

especially, you know, industrial cargos and similar. You know, the administration and Sankham have said they'll allow humanitarian trade to continue. So, you know, presumably that I'll continue on as well. But, you know, the Iranians will at times, you know, find it difficult to get ships willing to do that, especially in an active war zone. So, yeah, I mean, look, the blockade can absolutely do do a number on Iran's economy. It's worth pointing out, though.

It can't necessarily collapse. And that's in part because Iran does have the ability to get goods through its land borders, of course, right? There's only on, on one bit of the Iranian, you know, you know, border space and on top of that, you know, from a export income perspective, oil prices are high. And so, if the Iranians are able to sell their oil that's out on the water, just still covered by a U.S. sanctions license by the way, you know, and command $140

or a barrel oil when it was 70, not too many weeks ago, that's a lot of money they can bank in a short period of time. That potentially gives them some insulation. Yeah. Well, and when you said earlier, maybe what we're doing is letting some oil through to me, that says Trump's going to let the oil go to China. I think in the end, it's claiming this more, well, I don't want to mess up the summit, and he's also claiming this morning, they're not going to be armed the Iranians.

We're going to take a quick break, and we'll be right back with more of our discussion with Richard Neffhew. Beacon Global Strategies is the premier national security advisory firm. Beacon works side by side with leading companies to help them understand national security policy, geopolitical risk, global technology policy, and federal procurement trends. Beacon's insight gives business leaders the decision advantage, founded in 2013, Beacon develops and supports the

execution of bespoke strategies to mitigate business risk, drive growth, and navigate a complex geopolitical environment with a bipartisan team and decades of experience, Beacon provides a global perspective to help clients tackle their toughest challenges. All right. So let's say this economic squeeze, the blockade is working. Do you think that, and you know the Iranians, does that condition Iran to want to compromise, and maybe go with the downblending of the H. E. U,

if they got some amount of sanctions relief on top of that. I don't think they're going to just

agree to downblend the H. E. U, you know, off the bat, that they would be prepared to make that kind of trade. I look, the, the Iranians have said for years, they would be prepared to look at something kind of like the JCPOA, in which there is some kind of management of nuclear issues and change for sanctions relief. Now they want it more on sanctions relief, and they've offered less in terms of nuclear concessions, but look, that's still a universe in which the Iranians

“prepared to operate. And I don't see any reason why they wouldn't do so again, but I think the”

connection back to the economic issues is important here. You know, for them now, they have also got a lot of reconstruction that they're going to have to engage in as well. And I think one of the demands the Iranians are going to make, they'll keep saying reparations, practically what that will end up in is we need greater sanctions reliefs, the way we can at the cell things, gain access to money, and to be able to re-construction on our own. And so the demand side on that might be going

up while at the same time on the nuclear side, we've got fewer ass, right? We've got important ass, like on verification, which isn't been really been talked about, but it's hugely important right now, especially with all the open questions that are there, and how you actually be. So we were the president for this the IAEA is there for the down blend without a doubt. I agree, we'd be mad not to. And we would say we need an inspection of pickaxe, man.

Yeah, I think yeah, we would want to inspect all the various different ways that we're destroyed to actually see what happened there, and what's left over, right? You mentioned photo, and I think

you're right. Ultimately, if there is HAU there, it is buried under a lot of rubble, it's going to be

hard to, you know, come out with. The IAEA is going to say, yeah, we'll get some shovels, right? We're not going to do this, we're going to watch you do it, but we need you to dig it out because we want to actually know where all that stuff is. They're going to want to go to S-Fahan and take a look at all the destroyed sites there in there, if I would spend what's there, what's not there. Those are things that the IAEA will absolutely insist on, in fact, gross you were saying

“something similar earlier today, and we will also want. But that's not the only thing.”

It's worth pointing out that before the June operations, there were still open questions as to whether or not Iran had a cache of centrifuges that it had built up somewhere. And so one of the anxieties I have is that everyone's focused on HAU. So the Iranians get rid of the HAU, but they do still have uranium that they can enrich further. And if they have other centrifuges, if we don't have a tight enough deal, if we don't have verification provisions in a deal, well, they could give

something away while at the same time building up that stockpile again. This actual HAU at S-Fahan and similar, it is important, but it is not singular. All right, before we get to some energy

questions and regime change, what can you say about then I've always referred to this centrifuges

and crates buried somewhere that we don't know about? And I've heard different people say different things. I was in an event, the former Secretary of State said, well, what's the big deal? They don't have any centrifuges. So why do we care about the HAU? I've heard other people say, well, yeah, I don't know, they might have such a few just somewhere. I don't know that we know definitively,

“for all we know, they're crates and S-Fahan. I think we know that they're not actively enriching,”

but, you know, doing what do you, I don't know, do you think? I don't know, I use a lot of confidence in Israeli intelligence, but I guess we don't have a final word on, because you said S-Fahan was mostly tunnels, right? And pickaxe mountain looks like a centrifuge hall. Well, it's also a tunnel complex. And that's where the question is what it was a destined debate. What were the Iranians intending to do with that facility once they dug it out? I mean, come back to your

route question. Look, back in 2021, the Iranians for manufacturing centrifuges at above ground facility in the times that facility was attacked. And as a result of that Iran lost the ability to pre-center-fuge components for, I don't know, six, seven months, something like that. And one of the results of that was the Iranians said, we are now not going to declare to the I-E-A, our centrifuge component production work. We're not going to do it. Now, that was a JCPOA commitment,

and they said, we're just not going to fulfill that commitment anymore because now we want to rotate. From that moment, until this moment, the Iranians produced unknown numbers of centrifuge components at unknown locations and transported them to unknown locations. Okay. We don't know what numbers we're talking about here. We don't know location's question. Now, you said an important thing, which is, what about Israeli intelligence use and intelligence? When I say we

talking about people us terror on the outside, it is entirely plausible to me that the Israelis and US intelligence services know exactly where these things are, where they're being produced,

that would be a great relief because then that reduces the risk of other enrichment operations taking place.

But I don't know, you and I have been through a lot. We love and trust your intelligence colleagues.

“I think we also have a healthy respect for the fact that it's hard. And that you might think”

you know where things are and you might be wrong. And the Iranians, if nothing else, have proven incredibly proficient at engaging in upfuscation, it comes to their nuclear program, which is why the verification piece is so hard. So is it possible around has no centrifuges? Sure, that's possible. Is it possible they've got, you know, 2,000 centrifuges stood up right now. Some place in a tunnel complex, S-Fahan, pickaxe, some other place that we're not even talking about.

Sure, that's also possible. And until we get a verification mission in there, I will continue to have anxiety about what the Iranians might be. Okay. All right, well, so we're not that far. If I assume there's some in crates somewhere, but I wasn't convinced yet that there was a centrifuge hall up and up and working. All right, so you're on top of everything else. You've

“become an energy expert through the years. And I think you even teach classes on that.”

Tell us about the difference that I keep hearing between a physical shortage of oil and a paper shortage of oil. And our things about to really start biting because the quote unquote, a radiant oil that was shipped or the on the water oil was that we shipped before the war is arriving places. And they'll soon have, it'll soon run dry. Yeah, I mean, it's, it's actually one of the most fascinating things about this entire, you know,

issue set right now has been watching market actors, you know, basically have different expectations

for what's going to be produced in the future versus what is physically available now and pricing things accordingly. You know, the physical, you know, barrels right now are selling for a lot, right? You know, we have physical, you know, barrels at this point. I think I saw North Sea a couple days ago. Was it like at $135 a barrel? It's less, you know, coming out of out of the United States right now, but that number's probably going to go up the more that people come and try and buy it.

And ultimately, what this comes down to is is a, is a, is a problem of everyone's expectations. And what, what actual production damage has been done. So we, we know that there is a bunch of oil right now in storage, both on ships and on land that's plugged up in the northern part of the Persian Gulf that if all of a sudden tomorrow, everyone was comfortable with start rushing out and would go out to global markets. We also know that there are a number of ships that could make

their way up the Gulf and, you know, take on some of that oil and bring it back out. But that's going to take time. And there's questions about how long that time will take, which is influencing where the prices are going on this. There's also questions about that physical damage, not just what the Iranians have done, but what turning off the taps has done at the various different oil fields that have been forced to shut in. Because, you know, at some point when you fill up your

“storage, you can't pump anymore. So you have to stop production. But the moment you stop production,”

you actually, you know, do complicated and problematic things with regard to the pressure of oil fields and with their operations and ability to pump shut in, right? Absolutely. And shut in and damaged. And, you know, some colleagues who I know who are a lot closer to the petroleum engineering side of things have said, look, the longer these things are not pumping, the longer it takes for them to be, you know, fixed. And, you know, even things that you don't think about, you know, the pipes

associated with the pumps, you know, fill up with with group that has to be de-gooped in order to, you know, get them to pump again, which takes some time. So that all is now being felt in the price, right? Because people are saying, listen, if the streets open and there has been a lot of damage, well, we should be back to something closer to where we were at the start of the year, than where we are now. But no one actually knows when that's going to take place. And that is causing

so much difficulty to actually evaluate what the price is and what it's going to be, especially when you consider how the market tends to work where people have got contracts for delivery in X number of months, right? And so people are buying at these prices, or are they, right? Because they think the price might be going down in the future. So what do you know right now? On the commercial reluctance to go through on their own, or the insurance companies?

I mean, I know the whole idea here of the first, the freedom of navigation operation. I see this

is a spectrum. Now we're in the blockade phase and hoping Iran won't get involved. Maybe they do.

Now, where is everyone? Are they feeling better about this? Would they feel better if there was a an escort mission by the United States Navy through the actual straits that they could actively defend the tankers? Probably not because U.S. warships are part of the conflict, right? And

“folks go back to the late '80s and they say, well, it worked in the past, why can't it work now?”

I mean, you could make an argument, it didn't work in the past, because in the end we did have to actually use force against, you know, against the Iranians because of attacks that were still being made on shipping and U.S. naval vessels that were transit. But even then, if you were to say,

well, it worked for a while, the problem is we weren't a belligerent then. We are belligerent now. So

arguably, U.S. warships transit would actually be exposing potentially people to additional fire that they might not otherwise get. And I think the real fundamental problem is that defences have thus far proven effective but still leaky. And you don't yet have people being prepared to run the sorts of risks. Now, I think the funneling people is okay, so insurance prices have gone up. So, okay, they go up, but you still go ahead and, you know, deduct the transfer. Well, if the price

is so high that you won't be able to make it back up with the sale of your product, well, you don't create any incentive for anyone to move, especially if the risk of destruction of the physical ship, which is a expensive piece of property, is is weighed in there as well. And so the impression that I have is that everyone is prepared to be maybe the fifth or the sixth ship

that goes through. But nobody is terribly excited about being the first unless they have a guarantee

from the Iranians. And that's where the whole tolling concept came up. Basically, the Iranians said, "Well, we won't hit you if you pay us." And some people said, "Well, that sounds alright. We're not happy about it." But look, that's fine. We need the oil. They paid them and the Iranians said, "Well, well, that worked." So yeah, now we'll do a tolling operation where if we think you're on the list, we'll let you through as long as you pay as money and has reduced that kind of risk.

But you're still running against the economics of how much it costs and what those risks are for, you know, transiting. If you think that there is a, you know, if there is any kind of risk. It's also with pointy now that now that the President appears to have also at least criminalized, maybe is the right, is the wrong word. But you know, as said that we will enforce US sanctions and potentially military action against those who pay the Iranians these

tolls, well, you probably also reduce some of the willingness for people to do that toll pain as well, therefore also depressing people wanting to make the transit. So I'll have to do a little research myself, but maybe you know, I keep seeing tweets and news articles that say, "Well, you know, 24 made it through today or 34 made it through." So what is that reflect? People with perishable items that are willing to take the risk or are those oil tankers? What do you, what do you know about

this? So this is where getting the actual numbers that are hard in part because also,

“or maybe they pay, or maybe they pay in crypto. I think there's some payment going on there.”

Okay, honest. And I think that's definitely happening. I think there's some ships that have switched off their AIS system, their identification system, which basically signals, you know, the Voyager and and I'm containing oil, whatever. Right? And they blast that, so that whoever knows that this is the ship Voyager and it's containing oils that's going through. So some ships have turned those off, so we don't actually have this clear picture as to whose transit I want particular point in time.

It could be that people are making a run on it. We've known that for a while that some people

have been making a run on it. It's never been fully closed. And whether again,

bribes are being paid in similar as a whole separate question. I think the numbers that we've started to see, you know, somewhere in the neighborhood of 20, do imply that there's a little bit of unblockage that's now happening, but still nothing compared to the amounts that we're

“transiting freely when the streets were open. And so I think this is the question,”

are we seeing just people being willing to take the risk? Are we seeing bribes being paid or we saying smuggling activity? Or are we seeing just a little bit of desperation at this moment where people say probably the Iranians won't take a swing at that in six weeks they might. So we might as well go. That might be part of what's going on there too. Yeah. Okay. Fascinating. So we're going to get to two more issues. And then wrap up. Let me paint a scenario. I think I did a little

of this earlier. But let's say this really begins to bite the radiant ships absolutely cannot get through others are getting through does the economic problems that the Iranians have

like making compromises, especially with the United States. They would rather they would rather take

“up longer beating than be seeing caving on something material to us. What's your sense?”

My sense all along has been that the Iranians have been planning this to be a very long conflict. I think that they've been planning for months. So they'll have to wait a week. They'll

wait a second. They'll wait a second. They'll wait a second. They'll wait a second. And I think

they take their lesson from the Iran or Iraq war. I mean, or based, you know, setting that now, but I still think it's true. And I think that they will take from some of the President's comments as well as impending midterms and other dynamics that are happening with global economy, the sum of washi, all these other indicators. And they'll say, yeah, it really feels like the Americans are going to want to flinch on this first. Well, yeah, we keep saying we're going to have

it wrapped up by the meeting with Xi Jinping. We're not exactly saying we're going to hang in this

“very long. Yes, I have to say I think the messaging discipline has been very poor from the”

administration and that they really, you know, they need to clean this up if they're going to continue with this. Because right now, everything their screaming is, you know, we're done here. And we don't need to do this anymore. And the Iranians are saying, okay, good. Well, then we'll wait another day. So, yeah, I've seen a real trade off between what I think the President is doing, which is jaw-boning the markets by having different messages all the time. Versus,

signaling, resolutely, they were in us to win it. So, yeah, there's attention there. So, let's deal here with the big question as we wrap up regime change. What was your sense when you helped with the JCPOA? I remember it was, let's buy time. I don't know, 15 years or something.

And I always heard during the argumentation about it was, we don't know what's going to happen

in 15 years. Maybe they've collapsed, but then. So, we've we've bought some time. Did you believe that way back when do you think there's a higher, albeit probably not a majority chance of regime change? Now, what do you think? So, call me an optimist, but I have long thought that the contradictions intrinsic to the Iranians system are going to make it impossible to sustain. And that, you know, through continuing to highlight those contradictions, the fact they had a

highly educated population, a very large population, a population that really didn't like its government that had real concerns with the stifling nature of it, all the economic problems, the corruption, the mismanagement, was going to undermine and eventually result in a change in regime in Iran. That, that were me, my conviction. Frankly, I thought the sanctions relief steps that we had in the GCP way would have accelerated that and helped with that. Because we kept

the U.S. embargo in place, but we kept secondary sanctions in place our ability to sanction others for doing business with Iranian banks and the IRGC that was putting pressure on the Iranian system to make changes to how the IRGC was operating. It's role in the economy in similar. Now, those did not have time to manifest, right? They were starting. We were seeing press about this and the spring of 2018, for instance, where there were a lot of debates about the IRGC's involvement

in the economy is screwing up our banks' ability to connect internationally. Maybe we shouldn't have that. All of those changed when we exit the GCP way. Now, it's possible that all those dynamics don't result in regime change. It is 100% possible that 15 years of GCP way later, and you've got a regime that is stronger as, you know, made a generational change that is more in control than ever. It's possible. It's also possible, not. I think where we are today, though, is that we now have the

IRGC, both as a virtue of the sanctions running that they've been doing for a long time. And now, frankly, the collapse of the other parts of the system, where there are more politically

powerful in terms of having eliminated opposition than they ever been. Now, they're in a weaker position.

“And so this is, I think this is a really important point about how the war ends. When the war ends,”

assuming it does, I think that one of our number one objectives should be to make sure that we do not accidentally improve the position of the IRGC. So when I hear things about broad sanctions relief, right, here about removing the US embargo and similar, I get really anxious because the idea is not to give the IRGC in the current Iranian leadership a lifeline, but to continue to force those contradictions to say, we'll allow some Iranian banks in, but not if we detect an IRGC

involvement, similar, that might seem polyanish. But I think when you add to that, the dislocation the Iranian population have with their system as demonstrated in January through the protests. And the fact that the IRGC's political agenda is shot, all is out of to me to, if we maintain

system while enabling and supporting the population, I think you could see progress towards

“regime change, not being orchestrated by a military campaign, not happening potentially overnight,”

but that the arc would again go back to the internal contradictions that regime undermining the IRGC's role in it. Terrific. The IRGC just does a historical, well, I've read that Iran's only compromised in a real way twice to end the Iran Iraq war, which they call drinking from the poisoned cellus, and then JCPOA did IRGC, did the IRGC act we s to the Obama era JCPOA or did they

actively oppose it or support it? Well, they were opposed to it, and they pushed back on it, but ultimately

the Supreme Leader endorsed it in part because of Rouhani having come in and been elected with a very large, you know, out showing of support, especially after the Ahmadiyya era where they basically had to engineer him remaining president, even though we probably lost the election, or didn't win as big as he thought he did in 2009. And so all that ended up to the Supreme Leader at the time,

“telling Rouhani, basically, I'll let you have your JCPOA, I don't trust the Americans, I think they're”

going to back out of this, but we'll give it a go, and if I'm right, I get to tell you, I told you so. Now, with the IRGC, didn't just oppose it by saying we think that's a bad idea, and we don't want to constrain our options. They'd have other things, like arresting people like CMSI and you know, trying to undermine the ability of the running government to implement its parts of the JCPOA. So this is where I come back to the internal political fissures created by the JCPOA. We're actually

pretty significant. We had a time to see how those were going to mature. The problem we have now is all those external voices at this point have been quelled. And I'm not sure where they're going to come from now other than from people, you know, being willing to take the streets, because they certainly aren't going to be doing if they think they're going to be attacked from there.

And so now the IRGC by all accounts is more powerful now than they were.

“I think so, I think they're especially longer, but with a more fragile foundation.”

Interesting, certainly with much the book. Yeah, yeah, I mean, just to finish here in the last minute, my best on regime change is maybe we're going to look back on this moment in a year, in addition to the collapse of their currency and addition to the protests, as a milestone along the way to the ultimate weakening of the regime, but that the actual collapse is unforeseeable and what the trigger is, like the Tunisian street vendor who

caught himself on fire and somehow the Arab Spring breaks out. Is that plausible to endorse them? It's very much plausible. And I'll just come back to as well. You know, these things are brittle in that they can look very strong, but then you all see a fault line emerge that you didn't see before. It's worth pointing out, Venezuela is a economy was in utter shambles. And at the same time, that's not the reason why we're able to take Maduro out in similar, right? It may be part of

the reason why Delsea Rodriguez is playing ball now, but that was a multi-year process of atrophy and

damage. And you know, something that ultimately, it was not sanctions pressure that brought down

the Venezuelan government in many ways, but as well, it permits still in place just with different people in charge. This is kind of the problem set you emerge. And when you're trying to engage in these kinds of course of economic strategies from abroad, you don't know actually what you're doing. And you don't necessarily know how it's being felt inside and what the contours are. And then you don't really know when you're going to see real changes start to emerge.

Richard Nephew, thank you so much for joining us again on "NAT SICK" Matters. That was terrific. Thanks for having me. That was Richard Nephew. I'm Michael Allen. Please join us next week for another edition of "NAT SICK" Matters. "NAT SICK" Matters is produced by Steve Dorsey with assistance from Ashley Barry. "NAT SICK" Matters is a production of beacon global strategies.