The collapse of the Morsi government poses new challenges for Iran at a time when its reputation in the Middle East has been taking hits from all sides. Over the past two years, Tehran sought to create an alternative narrative for the Arab Spring as crystallized in Ayatollah Ali Khamenei's term "Islamic awakening." This narrative portrayed the unrest in Tunisia, Libya, Egypt, and Bahrain as an anti-Western movement inspired by Iran's 1979 revolution and aimed at establishing Iranian-style Islamic governments.
Developments in Syria, Bahrain, and Egypt have spoiled this narrative, however. Iran's reaction to protests in Bahrain disappointed Shiites throughout the region because it did not go beyond words, and because it helped the island's Sunni rulers depict the uprising as a sectarian conflict rather than a democratic movement. Meanwhile, Tehran's overt support to the Syrian government amid massive bloodshed has seriously damaged the Islamic Republic's image in the Muslim world.
In this context, the Muslim Brotherhood's failed government in Egypt is another significant blow to Tehran. Iran's leaders cut off diplomatic relations with Cairo after it signed the peace treaty with Israel in 1979, and subsequent Egyptian policies often ran counter to Tehran's designs. For example, Iran's longtime military and financial support for Hamas gave the regime influence in the Palestinian territories and beyond, but the Mubarak government's opposition to the group threatened this sway. Accordingly, Tehran tried to improve its relations with the Muslim Brotherhood and find common ground with Islamist groups inside and outside Egypt. The Brotherhood's post-Mubarak rise to power convinced Tehran that it could bridge its theological and political differences with the group, resume normal relations with Egypt, and strengthen its position in Gaza and, ultimately, the region.
The Brotherhood failed to meet Iran's expectations, however, opposing Tehran on Syria and then failing to hold its grip domestically. Now that the group's foes -- including military, secular, Muslim, and Christian authorities -- have mobilized the masses and ousted Morsi, Iran is in a very uncomfortable position: it is unlikely to find any allies among Egypt's political players in the near future. Moreover, the "Islamic awakening" narrative is losing substance and becoming irrelevant and unconvincing to both the Iranian people and pro-Tehran Muslims in other countries.
Going forward, the notion of rapprochement with Cairo will probably remain a distant dream for Iran, since all of Egypt's anti-Brotherhood forces have taken a tougher stance toward the Islamic Republic than did Morsi's government. Meanwhile, Iran's influence with the Palestinians will become even more tenuous, not only because Hamas's relationship with Tehran is worsening, but also because military rule in Cairo would make it very difficult for Iran to send support to Gaza via the Egyptian border. More broadly, many will interpret the Brotherhood's ouster as a failure of the type of political Islam that Tehran has long promoted.