A Tipping Point In Tehran?

This might be the end of the regime

“The newly installed statue of Iranian President Ebrahim Raisi toppled in Ardabil, northwest Iran, just days after its unveiling.” Source

No one can impose change on Iran from outside and no one should try. As I wrote earlier this week, the world must let the bazaaris, the urban retail business community that has always been the center of gravity in Persian domestic politics, decide whether this time is the right time. They will know when it is time, and Iran has always gone their way, historically. It appears that they think it is time, now. Protests have spread to more than fifty cities across the Islamic Republic and security forces seem to be overwhelmed.

The triggering events was reportedly sudden instability in the rial, which appears to have turned volatile on 23 December 2025. Five days earlier, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) had imposed sanctions on 29 vessels and their respective management companies as part of Iran’s “shadow fleet”. Iran uses deceptive practices to avoid US sanctions and sell petroleum products, mostly to China, using this fleet. Executive Order 13902 was supposed to be part of a “maximum pressure” campaign by the Trump administration, which already devastated Iran’s nuclear ambitions in 2024.

Source: Xe.com

American operations in Venezuela further disrupt the smuggling networks that the Islamic Revolutionary Guards Corps (IRGC) uses to circumvent sanctions. Put simply, the shadow banking system that has buffered Ayatollah Khamenei and the IRGC from the effect of sanctions experienced a sudden disruption of cash flows, creating a run on the rial. This absolutely hits the merchant class right where it hurts. Iranians were patient all year with rolling blackouts and no water pressure in the upper floors of buildings. After Israeli F-35s and American B-2s crushed the IRGC and its nuclear ambitions, the bazaar stayed quiescent. It was the rial that made them call for the son of Pahlavi to return.

I said at the end of July that I don’t see the monarchy returning to Tehran. The exception to that observation would be that Pahlavi serves as placeholder for something to come after him. Iranians would have to figure out what that new form of republic will be, as a full constitutional restoration of the absolute monarch still seems unlikely, to me. The key new development changing my mind is the bazaar protesters chanting for his return. This is a sudden reappearance of old loyalties, like the Russian tricolor reappearing spontaneously in the streets of Moscow after the 1991 coup. I use that example to underline that even if the regime falls, the ultimate result might not be something better, from an American perspective.

The key impediment to successful revolution remains the IRGC. Some commentators — informed ones, I make no aspersions — are convinced this is not The Big One, yet, because the regular armed forces, or Artesh, remain in their barracks and have not moved against the IRGC. I disagree with this argument because Artesh also sat out the 1979 Revolution, indeed this was the primary impetus behind the creation of the IRGC, as the clerics did not trust their army. IRGC is a parallel force, better-funded than the regular armed forces, at least in normal times, which have ended.

These are new times, and so far, Artesh is sitting out the uprisings while the IRGC gets hit hardest by the sudden reduction of shadow fleet oil revenue. I lack a crystal ball to see into the future, but I have been alive long enough to have conscious memory of the Revolution, and these events are beginning to feel familiar. History may be rhyming. Unless the regime figures out a way to stop the currency fluctuations, this is not going to stop. The crowds will keep growing and the protests will get louder. Perhaps Khamenei can find refuge in Paris, like Khomeini did.