The Iran Standoff: Who's Really Winning the Decades-Long Showdown?

How China profits and American taxpayers lose while hawks and doves battle over Tehran's nuclear ambitions

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As war rhetoric with Iran becomes increasingly commonplace in Washington, I decided to examine what congressional leaders and national security experts actually think about this high-stakes issue. The recent House Foreign Affairs Committee hearing on "A Return to Maximum Pressure" revealed something fascinating about the Iran debate that rarely makes headlines: this isn't just hawks versus doves arguing over abstract foreign policy—it's about who ultimately benefits from this decades-long standoff. You can watch the hearing to see what you think.

And who's winning? Not who you might expect.

Looking beyond partisan talking points, it has become increasingly clear that the primary winners in this geopolitical chess match are not the United States or Iran, but rather China and the defense industry.

China gains tremendously by purchasing sanctioned Iranian oil at steep discounts (absorbing approximately 90% of Iran's exports), while simultaneously weakening the dollar's global position, strengthening strategic relationships with countries like Panama through port investments, and watching the U.S. divert resources toward Middle East operations instead of focusing on Indo-Pacific competition.

Meanwhile, the perpetual tension guarantees a steady stream of defense contracts for weapons systems, intelligence platforms, and military hardware—with American and Israeli defense contractors reaping the benefits regardless of which political party holds power.

The real losers? Ordinary citizens on both sides—Iranian people suffering under a repressive regime that diverts national resources toward nuclear ambitions and proxy conflicts, and American taxpayers whose dollars are increasingly directed away from critical domestic needs like infrastructure, education, housing, and healthcare toward an endless cycle of military deployments with questionable long-term benefits.

The Experts: Assessing Iran's Current Position

The House Foreign Affairs Committee hearing featured three distinguished experts with extensive backgrounds in national security, Middle East policy, and sanctions enforcement. Each witness brought unique expertise on Iran's threat posture and potential U.S. responses, providing committee members with a comprehensive overview of both Iran's current vulnerabilities and the challenges in effectively countering its activities.

Mr. Norman T. Roule
Non-resident Senior Advisor, Warfare, Irregular Threats, and Terrorism Program, The Center for Strategic and International Studies
Norman T. Roule, a former senior CIA official and current advisor at CSIS, testified that Iran uses its nuclear program and regional militias as twin pillars of power projection. He warned that Iran could produce enough 90% enriched uranium for a nuclear weapon in about one week, with existing 60% stockpiles sufficient for seven weapons. While highlighting Iran's vulnerability following Israeli strikes that exposed air defense weaknesses, Roule cautioned that the Quds Force remains intact and determined to rebuild its proxy network. He advocated for a comprehensive approach combining sanctions, diplomatic isolation, and credible military options.

Ms. Claire Jungman
Chief of Staff, United Against Nuclear Iran
Claire Jungman from United Against Nuclear Iran focused on Iran's oil sector as the primary funding source for its malign activities. She detailed how the IRGC controls half of Iran's oil exports, using a "ghost fleet" of over 500 vessels that employ deceptive tactics to circumvent sanctions. Approximately 90% of these exports go to Chinese "teapot refineries" at discounted prices. Jungman recommended targeting the entire ghost fleet simultaneously rather than individual vessels, sanctioning all entities in the maritime supply chain, and establishing a global maritime interdiction task force.

Ms. Dana Stroul
Director of Research and Shelly and Michael Kassen Senior Fellow, The Washington Institute for Near East Policy
Dana Stroul, former Deputy Assistant Secretary of Defense for the Middle East, characterized Iran's regime as "on its back foot" with all pillars of its security strategy more vulnerable than ever. She characterized 2025 as a decisive year following significant setbacks to Iran's regional influence, including proxy losses in Gaza and Lebanon, the fall of Assad in Syria, and successful demonstrations of regional air defense capabilities. Stroul advocated testing Iran's willingness to negotiate while maintaining military options, warning that cutting USAID programs undermines America's ability to support emerging leaders in countries seeking to resist Iranian influence.

A Web of Interconnected Issues

The hearing focused on several interconnected issues that form the foundation of Iran's malign activities and the challenges in countering them. Witnesses detailed how Iran's nuclear program, oil revenue streams, proxy relationships, and growing alliances with Russia and China all contribute to regional instability. Committee members explored the effectiveness of various countermeasures, from sanctions to military deterrence, while debating the legacy of past diplomatic initiatives like the JCPOA. Throughout the discussion, a clear picture emerged of Iran's vulnerabilities alongside its persistent ability to adapt to international pressure.

The AUMF Debate: Congress's Role in War Powers

A significant but often overlooked aspect of the hearing was the discussion around the Authorization for Use of Military Force (AUMF) and congressional war powers. Representative Warren Davidson raised pointed concerns about relying on the 2001 AUMF—originally passed for operations against al-Qaeda after 9/11—as potential justification for military action against Iran.

Davidson questioned whether the 2001 AUMF could legitimately cover groups like the Houthis or Hamas, noting: "I've tried for a long time, since 2016, to update the 2001 AUMF. It's been darn near impossible." He highlighted the contradiction faced by reform advocates—when attempting to work through the committee of jurisdiction, they're often blocked, but when trying through appropriations, they're told to go back to the committee.

The witnesses largely agreed with the need for congressional involvement. Norman Roule affirmed that "Congress needs to start now with a process to understand what role should be played, to develop specific authorities," emphasizing that lawmakers must reassert their constitutional role in decisions about potential military action against Iran or its proxies.

Dana Stroul offered perhaps the most nuanced perspective, recommending Congress begin the process to "conditionally authorize" military force against Iran's nuclear program if diplomacy fails. She emphasized the importance of the words "begin the process" and "conditionally," arguing that this would send a signal of bipartisan consensus that military options remain credible, while ensuring that such momentous decisions aren't left solely to executive discretion.

Representative Joaquin Castro drew parallels to the lead-up to the Iraq War, noting that similar arguments about strengthening the administration's negotiating hand through preemptive authorization were used in 2002—a decision many now consider one of America's most costly foreign policy mistakes. This tension between deterrence and restraint underscored the complexity of restoring congressional war powers in an era of expanding executive authority.

Ghost Ships and Panama: The Maritime Evasion Network

The most technical—yet perhaps most revealing—part of the hearing focused on Iran's sophisticated oil sanctions evasion network. This intricate system involves ghost ships, complicit flag registries, and small, independent Chinese “teapot” refineries that maintain Tehran's critical revenue stream. As Jungman testified, "This revenue is not going back to the people of Iran. It's going into the regime's pockets." And I thought, “Much like the oil revenues of most countries.”

Iran operates approximately 521 vessels in its "ghost fleet" of tankers that deliberately obscure their ownership, turn off tracking systems (known as AIS transponders), and frequently change their national registration or "flags" to evade detection and sanctions enforcement. These vessels employ numerous evasion tactics, including ship-to-ship transfers, repainting, using false documents, and "flag hopping" to avoid scrutiny while transporting sanctioned Iranian oil.

Ship "flagging" is a critical component of international maritime law where vessels register with a particular country (the "flag state"), which provides them legal protection and subjects them to that nation's regulatory oversight. The flag state is responsible for enforcing international maritime laws and standards on its registered vessels.

Panama's role emerged as particularly controversial. As the world's largest ship registry, Panama has been a preferred flag state for many of these Iranian ghost ships due to its large registry and the strategic importance of the Panama Canal for global maritime trade.

The Panama Maritime Authority previously flagged 47% (171) of these Iranian vessels but now flags only 17% (88) after sustained diplomatic pressure from the United States. Jungman highlighted how "naming and shaming" campaigns have proven effective in reducing Panama's facilitation of sanctions evasion. Iran has adapted by creating false registries in countries with limited maritime oversight capabilities, including Guyana, the Comoros, and Eswatini.

The witnesses also noted International Maritime Organization (IMO)—the United Nations specialized agency responsible for regulating shipping—has done "little to nothing" to address Iran's maritime sanctions evasion. Representative Bill Huizenga specifically questioned how Arsenio Dominguez from Panama could effectively lead the IMO while representing a nation that has enabled Iranian oil transportation.

Chinese "teapot refineries" have become the primary destination for Iranian oil, receiving about 90% of Iran's exports. While the Trump administration recently sanctioned the King refinery under SHIP Act authorities, witnesses agreed that targeting individual refineries has minimal impact, as Iran simply redirects oil to other facilities. Committee members expressed frustration that China benefits from discounted Iranian oil while other countries pay market prices.

Iran's Axis of Alliances and Proxy Relationships

A significant portion of the hearing focused on Iran's complex web of relationships, both with major powers and proxy groups. Witnesses emphasized how these relationships form the backbone of Iran's strategy to project power while evading international pressure, creating what Dana Stroul described as an "emerging axis that is working to challenge the current international global order."

The testimony highlighted both Iran's growing reliance on China and Russia for economic and diplomatic protection, as well as the significant but recently diminished influence Tehran exercises through its proxy network, with particular attention to the Islamic Revolutionary Guard Corps (IRGC) as the operational center coordinating these relationships.

On alliances with China and Russia: China has emerged as Iran's economic lifeline, while Russia provides military cooperation. China purchases approximately 90% of Iran's oil exports, which provides crucial revenue that sustains the regime despite international sanctions. Both countries provide diplomatic cover for Iran at the UN Security Council, with Russia consistently blocking investigations into Iran's support for proxies like the Houthis. These relationships were characterized during the hearing as an "axis of upheaval" actively working to challenge the U.S.-led international order. The testimony highlighted growing concern about military technology exchanges between these countries, with Iran providing drones to Russia for use in Ukraine while receiving more sophisticated defense technology in return.

On relationships with regional actors: The hearing highlighted significant shifts in Iran's regional position. Israeli operations have degraded Iran's relationship with Hamas in Gaza, while Lebanon has seen Iran lose considerable influence following the decimation of Hezbollah's leadership. The fall of the Assad regime in Syria represents a major strategic blow to Iran, as it has lost its only state ally that permitted the use of Syrian territory for destabilizing activities.

On Iran's IRGC relationships with proxies:

The Islamic Revolutionary Guard Corps (IRGC) stands at the center of Iran's proxy strategy, controlling up to half of Iran's oil exports and using these revenues to finance its operations. Despite setbacks to its proxy network, the IRGC's Quds Force—similar to a mashup of the CIA and Joint Special Operations Command—remains largely intact and well-resourced. The Quds Force maintains training camps in Iran for multinational terrorists, described as "Train the Trainer" facilities designed to spread Iranian influence through proxy forces.

The Quds Force engages in extraterritorial operations, supporting non-state actors in various countries such as Hezbollah, Hamas, Palestinian Islamic Jihad, the Houthi movement, and Shia militias in Iraq, Syria, and Afghanistan. In Iraq, Iran maintains a significant militia presence that continues to threaten stability. It is responsible for providing arms, funding, and paramilitary training to these extremist groups.

Representative Cory Mills questioned witnesses about the Biden administration's February 2021 decision to revoke the Houthis' terrorism designations. The delisting was justified on humanitarian grounds, with concerns about disrupting aid delivery to Yemen's population. However, witnesses testified that following delisting, the Houthis escalated attacks, disrupting approximately 12% of global trade through the Red Sea. The Biden administration eventually redesignated the Houthis as Specially Designated Global Terrorists (SDGTs) in January 2024 after persistent attacks. Witnesses emphasized that recent Trump administration airstrikes against Houthi targets represented the most significant military action taken against the group.

Hamas received substantial funding, weapons, and training from a complex web of organizations, including both Israel and the IRGC, before launching the October 7 attacks against Israel. Meanwhile, Hezbollah—once Iran's most powerful proxy—has been severely weakened by Israeli operations that eliminated much of its leadership. The Houthis continue to receive IRGC support for their attacks on shipping in the Red Sea, with witnesses warning that the sophistication and lethality of these weapons would likely increase if Iran reestablishes its logistics connections with Yemen. The experts emphasized the Quds Force's maintenance of training camps in Iran for multinational terrorists, describing them as "Train the Trainer" facilities designed to spread Iranian influence through proxy forces.

The USAID Debate: Soft Power vs. Military Options

One of the more unexpected controversies centered on the Trump administration's elimination of USAID programs in the Middle East. Dana Stroul argued that cutting these programs represents a self-defeating move that undermines America's ability to capitalize on Iran's weakened regional position.

Stroul emphasized that "Syrian people will remember seeing the USAID stamp on emergency food assistance, clean water, and baby formula," creating goodwill that demonstrates American commitment. She warned that removing "this precious element of American power" limits the U.S. ability to support populations that might otherwise fall under Iranian influence.

Democratic View on USAID: Democrats maintained that diplomatic pressure and soft power, alongside sanctions, were essential components of a comprehensive Iran strategy. They criticized cutting foreign assistance programs as shortsighted and counterproductive, ultimately benefiting America's adversaries. Representative Brad Sherman specifically criticized the elimination of democracy and civil society programs that supported grassroots political movements and independent media within Iran. Democrats argued that these programs represented a relatively small investment with significant strategic returns, particularly at a moment when Iran's regional influence is vulnerable.

Republican View on USAID: Republican members generally supported the administration's cuts to foreign assistance programs, framing them as necessary fiscal discipline. They argued that USAID programs had not demonstrably prevented Iran from expanding its influence in the past and suggested that military deterrence and sanctions enforcement were more effective tools. Representative Scott Perry expressed skepticism about the effectiveness of democracy promotion programs, suggesting they had failed to produce meaningful change in Iranian behavior over decades. Some Republicans did acknowledge the potential value of targeted assistance but emphasized that such programs should be more narrowly focused on direct U.S. security interests rather than broader stabilization efforts.

Bipartisan agreement on USAID: While the partisan divide was stark on this issue, committee members from both parties expressed concern that in the absence of these programs, Iran would find it easier to rebuild its influence networks. However, the hearing did not cover the blowback from U.S.-backed regime changes in Libya, Iraq, and Syria that led to destabilization, prolonged conflict, and humanitarian crises, despite initial goals of democratization or humanitarian intervention.

The JCPOA: Dueling Narratives on a Contentious Deal

The Joint Comprehensive Plan of Action (JCPOA) emerged as one of the most contentious topics throughout the hearing. Republicans and Democrats presented starkly different interpretations of its impact and legacy.

The JCPOA was finalized between Iran and the P5+1 countries, along with the European Union in 2015. It imposed limits on Iran's nuclear program, capping uranium enrichment at 3.67% purity, reducing uranium stockpiles from 10,000 kg to 300 kg, cutting operational centrifuges from over 19,000 to about 6,100, and modifying key facilities. In exchange, Iran received sanctions relief affecting oil exports, banking, and trade. The agreement included IAEA inspections and real-time surveillance, though it contained sunset clauses with restrictions beginning to expire after 10-15 years.

Under the Obama administration (2013-2017), the JCPOA was presented as a diplomatic breakthrough preventing Iran from obtaining nuclear weapons while bringing it back into the international community. President Obama defended the deal against significant domestic opposition, arguing it was the most effective path to contain Iran's nuclear ambitions without military conflict. Critics noted the deal didn't address Iran's ballistic missile program or support for terrorist organizations. Norman Roule testified that Iran maintained that "any actions related to Quds Force behavior would threaten hardliner support for the deal," effectively using the agreement to shield its regional aggression.

Then the Trump administration (2017-2021) unilaterally withdrew from the JCPOA in 2018, reimposing and expanding sanctions through the "maximum pressure" campaign. Testimony from the hearing confirmed that during this period, Iran responded by increasing its missile capacity, expanding uranium stockpiles, and enhancing centrifuge capabilities—ultimately accelerating rather than halting its nuclear advancements. Though sanctions imposed significant economic pressure on Iran, they failed to prevent the regime from gradually expanding its nuclear activities after U.S. withdrawal, putting Iran in a stronger nuclear position than before.

The Biden administration (2021-2024) attempted to revive the nuclear deal through negotiations but faced criticism for lax enforcement of oil sanctions, which allowed Iran to significantly increase its exports, particularly to China. During this period, Iran's currency (the rial) gained value against the dollar, its nuclear program advanced to near-weapons grade enrichment levels, and the regime reportedly generated over $100 billion in oil revenue—resources that funded its military, nuclear programs, and proxy groups throughout the region. This enforcement gap created conditions that Iran exploited to strengthen its position while evading the intended impact of sanctions.

An interesting tangent to JCPOA enforcement arose when Representative Cory Mills questioned witnesses about the consequences of the Biden administration's February 2021 decision to revoke the Houthis' Foreign Terrorist Organization (FTO) and Specially Designated Global Terrorist (SDGT) designations. The delisting was originally justified on humanitarian grounds, with concerns that the designation would disrupt aid delivery in Yemen where 80% of the population relied on humanitarian assistance amid famine conditions. The testimony highlighted that following delisting, the Houthis actually escalated their attacks, disrupting approximately 12% of global trade through the Red Sea and directly threatening U.S. forces and commercial shipping. Witnesses confirmed that the Biden administration eventually redesignated the Houthis as SDGTs in January 2024 after persistent attacks, and emphasized that the recent Trump administration air campaign against Houthi targets represented the most significant military action taken against the group, targeting both their weapons capabilities and leadership structure.

The Rob Malley Controversy: Representative Chris Smith raised concerns about Robert Malley, the former U.S. Special Envoy for Iran during the Biden administration who was suspended in 2023 and under FBI investigation. Smith questioned whether Malley's policy positions, which some critics viewed as too favorable toward Tehran, might have influenced U.S. policy in ways that benefited Iran. He pointed to the State Department Inspector General's report that found the State Department had not followed its own security clearance guidelines in Malley's case.

The question focused on what damage might have been done to U.S. interests and how this might have affected Iran's perceptions of American policy. Norman Roule declined to speculate on the investigation, deferring to the FBI. Dana Stroul noted the importance of having a strong, independent Inspector General at the State Department and an FBI allowed to conduct credible investigations. The Malley investigation was characterized by committee members as adding to concerns about whether the previous administration's approach to Iran had been sufficiently rigorous, though details about the nature of the investigation remained limited during the discussion. Several Republican members suggested that having someone sympathetic to Tehran in such a strategic position might have undermined maximum pressure efforts.

An Odd Detour: Cryptocurrency

During the hearing, Claire Jungman mentioned several alternative methods Iran uses to generate and move illicit funds beyond oil sales. Jungman emphasized that these methods are harder to track but deeply dangerous, as they provide additional revenue streams for the Iranian regime to fund its activities:

• Crypto mining and laundering

• Shadow banking networks

• Dollar smuggling from Iraq

• Barter trade with Russia and Syria

She estimated that Iran has generated over $100 billion in oil revenue since 2021, with additional billions coming from these alternative financial channels.

When questioned by Representative Brad Sherman about the threat cryptocurrency poses to U.S. sanctions power, Jungman acknowledged that while crypto currently represents a relatively small portion of Iran's illicit financing compared to oil revenues ($8 billion vs. $50+ billion), it could offer Iran a way to "quietly move funds across borders" without the same level of scrutiny as traditional banking.

Rep. Warren Davidson then noted that crypto transactions are easier to trace because they occur on a public blockchain. Davidson suggested that while on-and-off ramps for crypto remain challenging, the transactions themselves are more transparent because they are recorded on a public blockchain, making them potentially easier to follow compared to traditional financial transactions.

Committee members expressed concern that crypto enthusiasts are actively working to undermine the U.S. dollar's status as the world's reserve currency, which has historically given the United States powerful leverage in enforcing sanctions. Though witnesses agreed that cryptocurrency remains secondary to oil as a revenue source, they emphasized the need for proactive measures to prevent this alternative financial channel from becoming a major sanctions vulnerability.

Political Perspectives on Iran Policy

The hearing revealed stark partisan differences in approaches to Iran policy, though members of both parties acknowledged the threat posed by the regime's nuclear program and support for terrorism. The political divide centered primarily on disagreements over the efficacy of the JCPOA, the appropriate balance between diplomatic engagement and military deterrence, and the value of foreign assistance programs in countering Iranian influence. While Republicans advocated for maximum pressure and expressed greater willingness to consider military options, Democrats emphasized multilateral diplomacy and warned against rushing toward armed conflict. These divergent perspectives reflected broader foreign policy philosophies that have characterized U.S. debates on Iran for over a decade.

Republican Point of View

Republicans strongly championed returning to President Trump's "maximum pressure" strategy while criticizing the Biden administration for lax sanctions enforcement. They emphasized the need for uncompromising military deterrence, with Representative Brian Mast delivering a stark message that President Trump would either work with Iran to peacefully end its nuclear program or "destroy your nuclear weapons and ballistic missile program."

Many Republican members expressed skepticism about diplomatic solutions. Representative Scott Perry described Iran as a "cancer" that cannot be negotiated with and advocated for direct military action against nuclear facilities if necessary. They praised recent sanctions designations while pushing for more comprehensive enforcement across Iran's entire oil supply chain.

Democratic Point of View

Democrats acknowledged the Iranian threat while emphasizing that Trump's withdrawal from the JCPOA had accelerated Iran's nuclear advances. Representative Gregory Meeks noted that under the JCPOA, Iran was at least a year away from having material for a nuclear weapon, whereas now it is "only weeks away from having enough uranium for many bombs."

Democrats consistently advocated for maintaining diplomatic options alongside pressure tactics and stressed the importance of working through multilateral coalitions rather than unilateral action. They criticized Trump administration officials for mishandling sensitive information in Signal chats and warned against rushing toward military conflict without exhausting diplomatic avenues. Representatives Brad Sherman and Joaquin Castro expressed concern about parallels to pre-Iraq War rhetoric and questioned whether military strikes could effectively eliminate Iran's nuclear knowledge.

Recommendations from Experts

The experts offered a range of recommendations—from diplomatic to hawkish—for strengthening U.S. policy. Listen for these as the debate on Iran heats up:

On congressional oversight:

• Reform the outdated 2001 AUMF that has been stretched far beyond its original intent

• Restore Congress's constitutional role in authorizing military force

• Develop a transparent process for evaluating when force against Iran might be necessary

• Ensure robust debate and regular briefings from the intelligence community on Iran's activities

On sanctions enforcement:

• Target Iran's entire ghost fleet simultaneously rather than vessel-by-vessel and establish a global maritime "no dock list."

• Expand pressure across the maritime supply chain, including classification societies, flag registries, insurers, captains, and port authorities that facilitate Iranian oil shipments.

• Create an international task force modeled on Russian sanctions coordination to enable real-time intelligence sharing on Iranian oil smuggling networks.

• Increase maritime interdiction operations and utilize AI tools to identify suspicious tanker behavior in real-time.

• Implement coordinated sanctions against multiple Chinese teapot refineries simultaneously rather than targeting them individually.

• Sanction mining operations within Iran.

• Enforce secondary sanctions against any entity worldwide that transacts with the IRGC or its proxies.

• Utilize the Mahsa Act to impose targeted sanctions on Iranian officials responsible for human rights abuses.

On nuclear containment:

• Initiate steps to trigger the "snapback" mechanism in UN Security Council Resolution 2231 to address Iran's expanded nuclear program.

• Test Tehran's willingness to reach a diplomatic agreement while maintaining credible military options.

• Ensure any new agreement permanently blocks Iran from obtaining nuclear weapons rather than merely delaying capability through sunset clauses.

• Prevent Iran from acquiring dual-use technologies that could advance its nuclear or missile programs by working with law enforcement globally.

• Begin the congressional process to conditionally authorize military force if diplomatic efforts fail.

• Maintain a robust U.S. military posture in the region, strengthen regional air and missile defense, and reinforce America's commitments to allies.

• Clearly communicate how sanctions relief would be structured if Iran dismantles its nuclear program.

On regional security:

• Target the Quds Force's logistics, training, and transportation systems to prevent reconstruction of proxy networks.

• Continue military operations against Houthi targets while seeking ways to support the Yemeni people and working with Saudi Arabia and the UAE on a political process.

• Share intelligence with regional partners to enhance their ability to counter Iranian threats independently.

• Prioritize operational integration of partner air defenses across the region and accelerate foreign military sales to allies.

The hearing ultimately revealed that while there's bipartisan agreement on the threat posed by Iran, profound differences remain on how to address it—differences that continue to create strategic opportunities for countries like China to benefit from the ongoing standoff.

What seems increasingly clear is that the current approach has produced a situation where the primary beneficiaries are not the American or Iranian people, but rather global powers seeking to challenge U.S. influence and defense contractors profiting from perpetual confrontation.