But I believe that the theory of Iranian strength is wrong. Iran is in an extremely weak position, and is poised to get weaker, even with the U.S. deal.
Here are four reasons I think Iran is weak.
Reason 1: Unwinnable Proxy Wars
Iran is now involved in three major proxy wars: the Assad regime's war against the Syrian rebels, the Iraqi government's war against ISIS, and the Houthis' war against the Saudi-backed Yemeni government.
Proxy wars take lots of money and effort. The Iranian public has no real reason to bear these costs, except perhaps in the case of Iraq, and will probably get progressively dissatisfied as they go on. But they will go on, because there is little chance that Iran can actually win any of these three wars. The Houthis are too small in number, and too close to Saudi Arabia, to ever control Yemen. The Iraqi government shows essentially zero ability to pacify the Sunni western areas of the country. And Assad is probably doomed.
None of these three unwinnable proxy wars is equivalent to a Vietnam or an Afghanistan, because only a few Iranian troops are actually fighting. But supporting proxies costs money, and Iran does not have a lot of money to spare. In addition, the loss of Assad will rob Iran of its most powerful regional ally, and the Syrian rebels (or ISIS) may then move on to pressuring Iran's other powerful ally, Hezbollah.
In other words, the military situation looks very bad for Iran.
Reason 2: Many Rivals, No Allies
Iran is surrounded by rivals. There are the openly hostile Saudis to the southwest. There are the Sunni Turks to the northwest, a traditional rival that is now working to overthrow Iran's ally Assad. To the east looms the giant unstable Sunni country Pakistan. And western Iraq and eastern Syria are filled with Sunni Arabs who have very unfavorable opinions of Iran.
Basically, Iran is surrounded:
Reason 3: Poor Economic Outlook
Iran has a sclerotic and oil-cursed economy. Thanks to the U.S. shale revolution, oil prices - currently pretty low - are not forecast to rise much, since every time they rise, U.S. shale production will surge and force them back down. In the longer-term future - two or three decades from now - electric vehicles will start becoming prevalent, driving down the demand for oil.
In other words, Iran's economy is kind of screwed, unless it can wean itself off oil. But in the best of worlds, that takes time and effort, and Iran is not living in anywhere close to the best of worlds - its economy is dominated and choked by the mafia-like Revolutionary Guard.
Perhaps this is one reason why Iranian military spending is so low:
Reason 4: Declining Demographics
Here, via Index Mundi, is a chart of Iran's Total Fertility Rate:
Meanwhile, Iraq's TFR is listed at 3.41, Pakistan's at 2.86, Syria's at 2.68, and Saudi Arabia's at 2.17. In other words, all of Iran's enemies and threats have populations that are growing faster than Iran's.
So Iran is out of friends, out of money, out of young men, and out of options in its numerous proxy wars. This is not a strong, ascendant regional power. This is a weak, threatened, isolated country living on borrowed time. Seen in this light, Obama's offer of rapprochement looks less like the capitulation its opponents allege - and more like a lifeline.