At the moment, writes Yair Albeck, Washington is caught in a dilemma in its relations with the Islamic Republic:

Tehran is stringing out the nuclear negotiations endlessly with the expectation that President Joe Biden will not admit that the talks have failed. After such an admission, the public would likely pressure the administration to stop offering Iran stealth economic relief through the lax enforcement of sanctions. Rigorous enforcement would, the White House fears, remove Iranian oil from the market and contribute to the global energy crisis that Russia’s war against Ukraine sparked. Meanwhile, Iran is benefitting doubly—strategically and economically—from the war, selling missiles and drones to Russia and oil to China. Given this advantageous situation, Tehran wants negotiations to continue.

But, Albeck argues, there is a way out of this “conundrum,” thanks in part to the ongoing protests against the Iranian government:

The world is witnessing the convulsions of a regime facing its own mortality. The regime’s vulnerability offers the Biden administration an opportunity to gain leverage in the nuclear negotiations. There is a path forward that can squeeze Iran economically without disrupting the already tight oil market. To that end, the U.S. needs to target foreign entities outside Iran that enable the country to circumvent sanctions, rather than companies inside Iran.

To revitalize its deterrence, the United States should target the financial institutions that help Tehran and the individuals who work in them. Iran uses American allies such as the United Arab Emirates and Turkey. . . . In other words, Iran can easily exploit financial institutions in these countries to evade sanctions due to a lack of regulation and loose standards.

Disrupting Iranian activity in the financial centers will not disrupt the global oil market. While Iran’s revenues from sales will be frozen, Tehran will not take its oil off the market because it fears losing market share. And as it knows from experience, it will have access to its revenues at some future date when it finally reaches an agreement with the United States.

For more than a year, the Iran-backed Houthis have been launching drones and missiles at ships traversing the Red Sea, as well as at Israeli territory, in support of Hamas. This development has drastically curtailed shipping through the Suez Canal and the Bab al-Mandeb Strait, driving up trade prices. This week, the Trump administration began an extensive bombing campaign against the Houthis in an effort to reopen that crucial waterway. Burcu Ozcelik highlights another benefit of this action:

The administration has a broader geopolitical agenda—one that includes countering China’s economic leverage, particularly Beijing’s reliance on Iranian oil. By targeting the Houthis, the United States is not only safeguarding vital shipping lanes but also exerting pressure on the Iran-China energy nexus, a key component of Beijing’s strategic posture in the region.

China was the primary destination for up to 90 percent of Iran’s oil exports in 2024, underscoring the deepening economic ties between Beijing and Tehran despite U.S. sanctions. By helping fill Iranian coffers, China aids Iran’s Islamic Revolutionary Guard Corps in financing proxies like the Houthis. Since October of last year, notable U.S. Treasury announcements have revealed covert links between China and the Houthis.

Striking the Houthis could trigger broader repercussions—not least by disrupting the flow of Iranian oil to China. While difficult to confirm, it is conceivable and has been reported, that the Houthis may have received financial or other forms of compensation from China (such as Chinese-made military components) in exchange for allowing freedom of passage for China-affiliated vessels in the Red Sea.