If cooperation, rather than war, were one day to govern West Asia, what would happen to the dollar, to gold, and to the stock index? In an essay in the American journal Foreign Affairs, titled "An Iranian Vision of the New Middle East," Iran's former foreign minister Mohammad Javad Zarif has tried to give a political answer to exactly that question. This Sahmino piece is not a translation or a reprint of that essay; it is a summary of Zarif's argument, alongside his critics, and above all a market-focused reading of the subject. The original essay is available on the Foreign Affairs website.
Let this be clear from the outset: this is a politically contentious subject. We take no political side; we report Zarif's argument as he framed it, then present the view of his critics so a balanced picture emerges. The human cost of the war now underway weighs on everything, and nowhere in this analysis do we call that conflict, or its market effects, an "opportunity."
What exactly does Zarif propose?
The core of Zarif's argument is simple: the model in which regional states outsource their security to outside powers, above all the United States, has failed. In his own words, "lasting stability cannot be imported into West Asia from the outside or imposed by force." His proposed solution is that the region's states, instead of leaning on outsiders, build integration among themselves, so that each country's strength reinforces the stability of the others.
He proposes that Iran, together with Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the UAE, and Yemen, and alongside the permanent members of the Security Council and possibly Egypt, Pakistan, and Türkiye, build a "regional security network" to guarantee non-aggression and freedom of navigation. On the nuclear file, he floats an "enrichment consortium" involving China, Russia, the United States, and the Persian Gulf neighbors, which would become the region's only fuel-enrichment center.
On the Strait of Hormuz his tone cuts both ways: on one hand he stresses that the war has made Iran see the waterway as an "existential security matter"; on the other he warns that a prolonged closure could accelerate global investment in routes that bypass Hormuz and thereby erode Iran's deterrent leverage, so Tehran should show restraint. The essay is written in a context where the Iran-US ceasefire understanding has collapsed over the interpretation of Hormuz rules, and where Donald Trump said on July 8, 2026, "I think it's over; I no longer want to deal with Iran." In other words, Zarif is writing in the middle of a renewed escalation, not in the calm after a peace.
Why is this, at its core, an economic argument?
What makes this essay matter for a financial site is that Zarif treats security as the means and economic development as the end. He speaks explicitly of an "integrated regional economic ecosystem," the idea of a "West Asia Development Fund" to finance reconstruction, and "seamless regional connectivity" (cross-border railways, energy pipelines, and sea routes).
This logic is familiar to Iran's economy. The main axis of Iran's effort to build non-oil hard-currency income through transit is the International North-South Transport Corridor (INSTC), roughly 7,200 km long, connecting Iran to Russia, India, and Central Asia. According to official Iranian estimates (which should be treated with caution), this route is about 30 percent cheaper and up to 40 percent shorter than the Suez Canal path, and the cargo volume moving through it grew about 19 percent in 2024 to nearly 26.9 million tons. But here lies an internal tension: much of this "integration" is possible only with sanctions relief and the return of foreign capital, the very thing that has not materialized for four decades.
The criticism: why many see this vision as unattainable
Zarif's plan has met a wave of criticism. A methodological note: part of that reaction is to his earlier peace plan (spring 2026), written within the same "new regional order" framework; because the core of the argument is identical in both, we cite those reactions with their own dates.
First, the Persian Gulf Arab states. Anwar Gargash, diplomatic adviser to the UAE's president, wrote that the plan ignores one of the fundamental flaws in Iran's strategy, namely the question of relations with its Persian Gulf Arab neighbors. Hamad bin Jassim Al Thani, Qatar's former prime minister, though calling parts of the plan "clever," warned that the war has led to the erosion of trust built up over years between Iran and its neighbors.
Second, Western analysts. Foreign Policy argued that Zarif's plan is in practice an attempt to convert battlefield losses into a limited Iran-US deal, and judged it unpromising against a backdrop of "collapsed trust." The breakdown of that same understanding over the interpretation of Hormuz rules is an example of just how hard building a durable security architecture is.
Third, domestic criticism. Tellingly, Zarif is under pressure from two directions. Some domestic critics argue that he is giving concessions from a "position of weakness" and underestimating levers such as the Strait of Hormuz and Iran's networked capabilities; they also recall that the US withdrawal from the JCPOA in 2018 shows a diplomatic deal does not necessarily reach a durable result. The sum of these criticisms carries one shared message: the logic of the vision may be sound, but its precondition, a minimum of trust among the actors, does not exist today.
What does it mean for the dollar, gold, and stocks?
Regardless of whether Zarif's plan is ever realized, what effect does movement toward "regional cooperation" versus "continued war" have on Iran's markets? First we should see the starting point (live updates are available on Sahmino's prices page):
| Indicator | Value | Date |
|---|
| Free-market dollar | about 189,980 tomans (up ~1.2% on the day) | July 21, 2026 |
| Exchange Center dollar (remittance) | about 150,900 tomans | July 21, 2026 |
| Emami coin | about 183.5 million tomans | July 21, 2026 |
| Melted (spot) gold | about 78.5 million tomans per mesghal | July 20, 2026 |
| TEDPIX (Tehran index) | about 4,887,000 points (up ~1.5% on the day) | July 21, 2026 |
| Point-to-point inflation (Khordad) | 83.1% (Central Bank) / 88.6% (Statistics Center) | Khordad 1405 |
After a record of nearly 194,500 tomans on Saturday, July 18, the free-market dollar is now trading around 190,000 tomans, and its gap with the Exchange Center rate has widened to roughly 39,000 tomans. The key point is that much of the nominal rise in these assets reflects the collapse in the national currency's value, not real growth.
Scenario one: de-escalation and a move toward regional cooperation
The experience of these very months showed how global markets react to de-escalation: following the late-June ceasefire and the promise to reopen Hormuz, Brent crude, which at the peak of the crisis had passed 118 dollars, fell to about 70 to 73 dollars by early July, and Asian and European equities jumped. For Iran, the de-escalation path works mostly through the channel of expectations and the exchange rate: lower war risk and the prospect of sanctions relief can drain speculative demand for the dollar and gold and part of the coin premium. In that case safe-haven assets may retreat in the short term, while shares of firms tied to stability and a restored supply chain could draw interest. But an important caveat: the value of many large listed companies is tied to the dollar and global commodity prices, so a sharp, sudden drop in the dollar can be bad news for export-oriented stocks in the short term, even if it is positive for the economy as a whole. This is the same divergence we examined earlier in the analysis "Iran 2026 in the Mirror of The Economist."
Scenario two: continued or intensified war
The other side of the coin is bitter. The collapse of the understanding in July and Trump's remark that "it's over" pushed risk back up. The International Monetary Fund, in its World Economic Outlook (April 2026), projected that Iran's economy would contract about 6.1 percent in 2026 and that inflation would reach nearly 68.9 percent. In this scenario, pressure on the rial continues, imported inflation intensifies, and domestic safe-haven assets (gold, coin, and hard currency), despite violent daily swings, keep their function as an inflation shield. The bourse in this case typically rises in nominal terms alongside the dollar, but its real return (adjusted for inflation and the dollar) can be negative.
This analysis is not buy or sell advice. The aim is simply to show that the fate of Iran's markets is tied less to any "vision" on paper than to the real path of tension or de-escalation, and specifically to the state of sanctions and the Strait of Hormuz. For a framework on balancing gold, currency, stocks, and fixed income under inflationary conditions, our explainer "Money, Inflation, and Purchasing Power" offers a useful starting point.
What to watch
- The state of the Strait of Hormuz and shipping war-risk premiums: a genuinely open waterway and a falling war-risk premium are the first sign of real de-escalation.
- The fate of sanctions and oil waivers: any sign of extending or lifting oil-export exemptions bears directly on the government's hard-currency income and the dollar rate.
- Iran's oil-export trend and the Brent price: a return of export volumes to pre-war levels is the precondition for any economic recovery.
- The gap between the free-market dollar and the Exchange Center rate: the divergence of the two is a thermometer of inflation expectations.
- The events calendar: negotiations, regional summits, and currency decisions can be followed on Sahmino's calendar.
Conclusion
Zarif's vision is an ambitious idea: a West Asia that builds its own security and prosperity through integration rather than importing them from outside. For Iran's economy the logic is appealing, because the key to non-oil growth (transit, energy, and regional investment) hinges precisely on stability. But critics, from Arab capitals to inside Iran, point to one shared weakness: this vision has a precondition, trust and sanctions relief, that is absent today. Until those preconditions are met, Iran's markets will keep rising and falling to the rhythm of war and peace and the state of Hormuz, not to a roadmap that is still on paper. The practical message for the Iranian investor is clear: make decisions based on realized data (rates, inflation, exports), not on political scenarios that are still unproven.
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