Who’s Really Running Iran?

This episode of The Daily explores the shifting power dynamics within Iran following a dramatic escalation in U.S.-Iran relations, triggered by President Trump's abrupt cancellation of peace talks with Iran. Reporter Farnaz Fasehi reveals that Iran's Supreme Leader, Mujtaba Khamenei, is now incapacitated and in hiding after being severely injured in a U.S.-Israel airstrike, effectively ceding real power to a coalition of Revolutionary Guards generals. These military leaders, who have deep personal and historical ties to the new supreme leader, are now the de facto decision-makers, steering Iran’s war strategy, economy, and diplomacy. Despite Iran’s long-standing ideological stance, the generals are portrayed as more pragmatic—motivated by survival, economic recovery, and access to frozen assets—making them open to a major deal with the U.S., including lifting sanctions and inviting American investment. However, the negotiations remain stalled due to mutual face-saving demands, regional threats from Israel, and Iran’s newfound leverage over the Strait of Hormuz. The episode underscores a fundamental transformation in Iran’s governance: from a clerical theocracy to a military-dominated regime with a cleric at its head. Key takeaways include: Iran’s leadership has shifted from the Supreme Leader to a group of Revolutionary Guards generals due to the new leader’s injuries and isolation; the generals are more pragmatic and economically driven than ideologically motivated; Iran is open to U.S. investment and economic reconstruction as part of a peace deal; the Strait of Hormuz has become a strategic bargaining chip with potential for toll-based revenue; and both sides are locked in a high-stakes game of face-saving, making a breakthrough difficult. The episode concludes with the broader implication that while regime change hasn’t occurred, Iran’s internal power structure has undergone a quiet but profound transformation.