Originally posted on The Conversation:

There are signs, amid intense discussions between Iran and the US, that the two sides are closer to a nuclear deal than at any point since Tehran began talks with the international community in 2003. According to “Western diplomatic sources”, the Islamic Republic has made significant concessions, including:

*A reduction of their current level of operating centrifuges for uranium enrichment, from about 10,000 to 6,000 over the next 10 years;
*Shipment of almost all of their uranium — both the 20% stock and the less-enriched 5% — outside Iran, to be held in Russia;
*An agreement of 15 years, with Iran returning to its current level of enrichment only at the end of the period;
*Inspections and supervision of nuclear sites by the International Atomic Energy Agency

The Iranians may also have committed to keeping their advanced centrifuges — installed in early 2013, but never put into operation — off-line.

There is still a high hurdle to final deal by a July 1 deadline. Iran is insisting that major US and European sanctions, especially on its oil and financial sectors, must be removed with months; however, US officials are speaking of a process taking “years”.

The Supreme Leader’s Nuclear Decision

Making the big assumption that the US and its partners agree to lift some of the key sanctions within a year, will Iran’s Supreme Leader give his necessary endorsement so the deal can be implemented?

At a glance, that endorsement might appear beyond hope. Ayatollah Khamenei — in his speeches, on his website, and even via Twitter — rails against the perfidy and dishonesty of the US Government. He castigates Washington not only over the nuclear issue, but also on everything from its supposed suppression of African Americans and Muslims to its alliance with Israel to its history of “imperialism” to the holding of detainees after 13 years at Guantanamo Bay.

Yet in September 2013, the Supreme Leader accepted the request of his new President, Hassan Rouhani, that talks should be renewed with the US and the other 5+1 Powers (Britain, France, Russia, China, and Germany). He has maintained that support for discussions despite the hostility of “hard-line” groups, including at times the elite Revolutionary Guards, towards the negotiations. He has backed Rouhani and Foreign Minister Mohammad Javad Zarif against the criticism of MPs and clerics opposed to any agreement.

Still, Ayatollah Khamenei has set high goals for Iran’s nuclear negotiators. Last year, he said that Iran must be able to expand its output of enriched uranium 2000% by 2021, to ensure self-sufficiency in its civil nuclear program.

In talks with the US and the 5+1 Powers, Tehran’s diplomats set a lower figure; however, the reality of the deal on the table is that Iran — far from any expansion — is cutting its enrichment by at least 40%.

The Supreme Leader’s “Cup of Poison”: The Iranian Economy

So why would Ayatollah Khamenei give up his nuclear hopes and accept a deal? To lift the famous US political phrase, “It’s the Economy, Stupid”.

A combination of mismanagement, corruption, global conditions, and sanctions have brought Iran’s economy to breaking point. Iran’s oil exports are down more than 40%, compared to 2012. The Government’s revenues from oil sales have fallen from $100 billion to about $30 billion, leaving a giant hole in the proposed 2015/2016 budget that is being covered by thin aspirations of increased tax income and “non-oil exports”.

Unemployment is rising, especially among those under 30. Inflation has fallen from the crippling level of 45% in 2013, but it is still officially above 15% and unofficially higher than that for key products such as food and electricity. The price rises have been accompanied by a subsidy cuts program which has been a bureaucratic albatross since 2010. The currency, while not yet at the crisis point of 2012, is far from stable.

The Supreme Leader has tried to cover all this with the declaration of a “Resistance Economy” that can withstand the effects of no deal and continuing sanctions, but his pragmatic side knows that this is unlikely to salvage the economic situation, at least without further long-term sacrifices by Iranians.

That is why in September 2013, he agreed to renewed negotiations about newly-inaugurated President Rouhani showed him a thick dossier detailing the economic crisis. That is why he has continued to back the talks: Iran needs to escape the noose of sanctions to recover, let alone fulfil Ayatollah Khamenei’s mantras of “economic jihad” and scientific and technological advance.

The Wild Card of Khamenei’s Health

And now there may be a further catalyst for the Supreme Leader: the state of his health.

Last year, Ayatollah Khamenei spent several days in hospital. State media put out the line that the operation was for an anal fissure, but eventually conceded that he had undergone a biopsy for prostate cancer.

In the past month, sources inside Iran have reported chatter that the cancer is serious and possibly life-threatening. While they could not confirm the claims, the French newspaper Le Figaro headlined last weekend that the Supreme Leader’s cancer is Stage 4 and terminal.

If this is true, will Khamenei face his demise by leaving the legacy of a nuclear deal to save the Islamic Republic’s economic future? Or will he decide to go to his death with a last defiance of the US?

Drinking the “Cup of Poison”

There is an important precedent. Only months before his death in 1988, Iran’s first Supreme Leader, Ayatollah Khomeini
accepted the Government’s recommendation of a ceasefire in the 8-year war with Iraq. He said he did so even though the terms, which brought little reward for the loss of hundreds of thousands of Iranian lives, were “worse than drinking poison”.

If the current Supreme Leader accepts the nuclear deal, he will have to acknowledge that Iran has not achieved its goals. There is no language to dress up the restraints on the nuclear program as anything other than a limited capitulation to the US.

Despite his hatred of the American Government, and the parlous state of the Iranian economy, Khamenei might take the poison. However, that prospect has an important message for Washington, London, and Paris.

Unless the 5+1 Powers agree to the central condition of a quick lifting of major sanctions, the Supreme Leader will never face his decision. Instead, the nuclear talks will collapse and the Islamic Republic — minus a President Rouhani and Foreign Minister Zarif, whose political futures will evaporate — will take its chances with a “Resistance Economy” and an unrestricted nuclear program.

The Supreme Leader would be making his greatest gamble. It would remain to be seen if his Islamic Republic could survive the sanctions and the curse of being an international pariah – and if Iranians were willing to take that gamble with him.