Victoria Coates, Vice President for National Security and Foreign Policy at the Heritage Foundation’s Davis Institute and a former Trump Administration Deputy National Security Advisor, recently appeared on CNBC to argue that Iran has run out of leverage at the negotiating table, and the “only path for survival” is nuclear concessions.
Why Coates Believes Iran Has Lost Its Leverage
Coates described Iran as a “completely disorganized regime in disarray” with weak command and control. Within that framing, she argued that any acceptable deal would need to include unfettered inspections. She pointed to the role of the IAEA, citing comments from Director Rafael Grossi, in downgrading or removing highly enriched uranium, potentially with third countries serving as custodians.
Coates also addressed reports of friction between Washington and Israel, characterizing them as normal sovereign-interest divergence rather than a substantive split.
The Events Driving the Current Negotiations
According to the reporting in the segment, the U.N. paused ship evacuations near the Strait of Hormuz after a container ship was hit off Oman, and a U.S. official confirmed Iran was behind the attack. Negotiations are unfolding inside a 60-day window in Geneva, with roughly two million barrels sitting in Saudi tankers waiting to transit the Strait. A joint GCC-plus-U.S. statement called for free passage through the Strait.
The U.S. Energy Information Administration reported that the de facto closure of the Strait of Hormuz tightened global oil supplies, with the Brent crude oil spot price averaging $117/b in April and reaching $138/b on April 7. Brent has since pulled back sharply in late July, trading at $76.49 per barrel, while WTI sat at $78.94 per barrel on June 22, 2026, down $21.41 from the prior month.
Why Oil Revenue Is No Longer Enough for Iran
For investors, one of the most consequential portions of the segment was Coates’s claim that Iran’s energy economy offers no escape hatch. Even continued oil sales to China, she said, will not rescue the regime with oil prices “around $70 a barrel,” because nobody wants to sign a long-term contract with an unreliable producer operating under sanctions and military pressure.
The supply data reinforces the structural squeeze she described. The EIA noted it now forecasts Iran will have to reduce production in part due to the U.S. blockade, which has curtailed Iran’s ability to export oil. The agency flagged Iranian shut-ins of 130,000 b/d in May 2026 and 230,000 b/d forecast for June 2026, against a baseline February production level of 3,390 thousand b/d.
What to Watch
The next 60 days could determine the future of Iran’s nuclear program and the direction of global energy markets. Negotiations in Geneva, the pace of IAEA inspections, and whether commercial shipping can move freely through the Strait of Hormuz will all influence how much geopolitical risk remains priced into oil.
Brent crude’s swing from more than $138 per barrel in April to roughly $76 by late June illustrates how quickly that risk premium can disappear as supply concerns ease. Any breakthrough or breakdown in negotiations could have significant implications for oil prices, shipping markets, and energy stocks through the remainder of 2026.
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