Iran war shatters US prestige in West Asia

In the global foreign policy discourse, the US’ declining power, stature and diplomatic heft became a subject of keen study and research, particularly after the onset of China’s Belt and Road Initiative. Despite the growing number of academic voices on the subject, the rhetoric and reality of the US decline, until recently, felt like Chinese propaganda. However, the US’s abject surrender to Tehran in Trump’s Iran deal makes the most convincing argument for the superpower’s decline, which appears to be entering free fall with every passing day.

As of writing this piece, the negotiating parties have agreed to the Islamabad MoU in Burgenstock as an interim deal, pending its final approval as a comprehensive deal in 60 days. The entire drama at Burgenstock, with the Iranian delegation walking out impatiently and Trump alternating between intimidation and supplication, merely confirms the US’s policy paralysis and waning might.

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After the 12-day war ended with a ceasefire in June 2025, Iran appeared weak, fragmented and vulnerable. The Americans claimed to have destroyed its nuclear programme. It was the time when the US and Israel could have consolidated their gains through tactful diplomacy and led Iran towards a nuclear deal that offered robust and concrete safeguards against the future development of its nuclear programme. However, Jerusalem and Washington, DC, hoped for the ideal outcome, ie, regime change at an opportune moment in the near future.

On the other side, Tehran, expecting another US-Israel attack, fixed all the gaps in its security architecture, streamlined its internal governance and made preparations for the final showdown. Iran’s massive public protests in January 2026 offered that opportune moment. However, the war that began as a final showdown with the goal of bringing down the Mullah regime, with a massive air invasion and a grassroots revolt by the restive population, has ended in a ceasefire followed by a deal that establishes Iran as a major pole in the Middle East; shatters the US’s exalted status as a global superpower, exposing its unreliability and unpredictability; and leaves Israel in a direct face-off with a formidable existential threat and the Arab allies of the US on the horns of a dilemma.

The long-awaited deal offers the US almost nothing, except hollow promises and ambiguous declarations. The deal does not mention anything about Iran’s missile and drone programmes, which turned out to be the central pillars of its asymmetric capabilities, wreaking havoc in Arab capitals and the US bases in the Middle East. The deal does not address the issues of Iranian proxies. Instead, the regime has made it a point to include cessation of the offensive operations against Hezbollah on the Lebanon front, which makes it explicitly clear that Tehran has no intention to abandon its proxies.

On the nuclear issue, Iran merely repeats its previous pledge not to procure and develop nuclear weapons; however, disposition of the enriched uranium remains pending till the mutually agreed mechanism is arrived at. Further, Iran offers to open the Hormuz Strait, which it closed, and remove the mines that Iranian forces planted. Additionally, Tehran allows the safe and free passage of commercial vessels through the Strait of Hormuz for 60 days, after which it is likely to levy tolls on passing vessels through its Persian Gulf Straits Authority, in complete violation of the freedom of navigation on the global commons, making the region perpetually vulnerable to the whims and fancies of the Mullah regime.

However, in lieu of these flimsy assurances, Tehran, proving its mettle as a tough negotiator, secures concrete gains, including the lifting of the US naval blockade within 30 days, removal of all the US forces in Iran’s proximity within 30 days of the final deal and the termination of all types of sanctions, including the UNSC sanctions and all of the US’ primary and secondary unilateral sanctions. Also, Iran, with its burdened economy facing sanctions for the last 40 years, manages to extract a reconstruction and economic development plan worth $300 billion.

The draft text of the deal reads, “The mechanism for the implementation of this plan will be finalised as part of a final deal within 60 days. All required licences, waivers and permissions needed for the relevant financial transactions will be granted by the United States of America." Further, the US unfreezes Iran’s foreign assets worth $24 billion, and that too when the US president claims to have decimated Iran’s military capabilities. Additionally, the US undertakes that “immediately upon the signing of this MOU and until the termination of sanctions, the U.S. Department of the Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives and all associated services, including banking, transactions, insurance, transportation, etc.”

Most importantly, Israel, one of the main warring parties faced with an existential threat from Iran’s nuclear programme, is not even a signatory to this deal, bringing forth its divergent views from the US in the public eye. Further, the way the Iranian delegation is dictating terms to the US delegation and making them wait merely confirms that the US has lost the game, and it is no longer the net security provider in the Middle East. Trump’s embarrassing surrender to Iranian mullahs has made a deep and long-lasting dent in the US’s credibility, which is certainly going to further erode its diplomatic heft and stature. No wonder the Arab allies are contemplating the possibility of the US’s withdrawal from the Middle East and exploring new partners and regional security frameworks to safeguard against the Iranian missiles.

(Abhinav Pandya is a policy analyst specialising in counterterrorism, Indian foreign policy and Afghanistan-Pakistan geopolitics. Umar Iqbal is an intern in security and counterterrorism studies programme at Usanas Foundation. Views expressed in the above piece are personal and solely those of the authors. They do not necessarily reflect Firstpost’s views.)