Pezeshkian secured 54.76  of votes in the second round

Masoud Pezeshkian has advocated for a more balanced foreign policy

Masoud Pezeshkian, Iran’s second ever reformist president, was elected as Iran’s new president following the death of his predecessor Ebrahim Raisi in a helicopter crash in May. Pezeshkian won the runoff presidential election against ultraconservative Saeed Jalili, receiving nearly 16.4 million votes compared to Jalili’s 13.5 million, according to the official count.

Pezeshkian campaigned on a promise to address foreign policy issues with the West over Iran’s nuclear program and has vowed to ease long-standing internet restrictions and to “fully” oppose the morality police’s enforcement of the mandatory headscarf for women.

Business Implications

The nomination of Pezeshkian is unlikely to significantly alter Iran’s operational environment. Consumer confidence could see slight reprieve in 2025, as the new president aims to alleviate some of the hardships Iranian citizens face (including crackdowns by military police). Despite this, Pezeshkian will face resistance from ultra-conservative members of Iran’s political system, which, coupled with the high likelihood of the return of Donald Trump to the presidency in the US, will derail a return to formal nuclear negotiations in 2025. Subsequently, Iran is unlikely to return as a viable market in 2025.

How will this impact Iran’s outlook?

  • Domestic policy: Pezeshkian’s aims to reduce internet censorship, opposition to using force to impose the compulsory hijab rule, as well as his previous criticism of Mahsa Amini’s death in police custody will help reduce the likelihood of protests. While his ability to pass any meaningful reform may remain limited, his reformist stance could address some of the general public’s grievances, leading to a more stable domestic environment in 2025.
  • Regional relations: Pezeshkian’s foreign policy priorities will become more evident once his cabinet is announced. Despite this, Iran’s regional ties and foreign policy direction are unlikely to be severely altered by his nomination. Regionally, Iran will maintain its stance on the war in Gaza, with ongoing proxy activity across Lebanon, Syria, and Yemen. Notably, relations with Saudi Arabia will continue to evolve against the backdrop of the March 2023 China-brokered deal, with the Saudi king and crown prince congratulating the new president on his nomination and “affirming his keenness on developing and deepening relations.”
  • Nuclear deal efforts: Pezeshkian has expressed his willingness to address Iran’s nuclear activity as well as potential sanctions removal. Despite this, the president will need the support of Iran’s supreme leader before addressing Tehran’s stance on relations with the West. Khamenei’s response to the president’s nomination, in which he urged the new president to continue Raisi’s policies, signals that he may face some resistance if he tries to soften Iran’s posture toward the US. Alongside this, the president will face resistance from Iran’s parliament, which remains dominated by ultra-conservatives who are highly critical of a potential nuclear deal. As per FrontierView’s base case, the return of Trump as president in the November US elections will likely derail any potential formal nuclear agreement for the foreseeable future. The continuation of informal, back-channel conversations with the US is likely in 2025. The president’s nomination of a foreign minister in August will be a key factor to monitor, as it will play a crucial role in shaping the direction of nuclear negotiations.

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