Why Iran talks are deadlocked

In an interview with CNN, Mohsen Rezaei, military adviser to Iran’s new supreme leader, said that the Hormuz strait will remain shut unless and until Washington releases $24 billion in frozen Iranian assets. Thus, Iran is applying a hostage negotiation logic but on a much larger scale. Its hostage is no longer an American citizen. It is one of the world’s most important economic arteries. For Iran, this is possession. Iran now has something the US (and for that matter, the rest of the world) wants. And it will not give it up unless and until America pays an exorbitant price. In Tehran’s eyes, the strait has now become the most valuable hostage it has ever possessed. Tehran’s formula is simple: Give us the money or you don’t get what you want — and what we possess.

It’s the classic dynamic of a hostage negotiation. For Washington, the three options remain what they’ve been for weeks:

Endure: Seek to outlast the macro pressure and rising gasoline prices as economic pain compounds inside Tehran to some distant and uncertain breaking point.

Concede: Pay the up-front cost with billions to Iran in exchange for a return to status quo before the war — a humiliating retreat for Trump given the stated objectives at the outset.

Fight: Seek to control the strait militarily and renew major operations inside Iran, with risk that Tehran then seeks to expand the war to other fronts.

For Tehran, the calculation is simpler: hold the asset and wait. This is the dilemma of negotiating with a party that possesses what you want back. Unless and until the leverage changes, Iran will not surrender it cheaply — and talks will remain as today: deadlocked.