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Iran Challenges Remaining Partners to Save Nuclear Deal
Iran Challenges Remaining Partners to Save Nuclear Deal
U.S. Maximum Pressure Meets Iranian Maximum Pressure
U.S. Maximum Pressure Meets Iranian Maximum Pressure
A man passes a mural painted on the wall of the former U.S. Embassy in Tehran, Iran, on 9 May 2018. US President Donald Trump announced a 'withdrawal' from the Iran nuclear deal on 9 May 2018. Fatemeh Bahrami / Anadolu Agenc

Iran Challenges Remaining Partners to Save Nuclear Deal

Responding to the Trump administration’s “maximum pressure”, Iran has announced it will no longer respect all the limits placed on its nuclear research activities by its 2015 deal with world powers. With Washington having renounced the deal, the remaining signatories should hasten to save it.

One year ago today, President Donald Trump announced that he was withdrawing the U.S. from the 2015 Joint Comprehensive Plan of Action (JCPOA). Until now, Iran, as repeatedly confirmed by the International Atomic Energy Agency (IAEA), has abided by the restrictions placed by the nuclear agreement on its proliferation activities, despite rapidly declining returns. That status quo was increasingly untenable; Iran’s decision today is the predictable and unwelcome result. As Crisis Group has long argued, the burden now falls on the JCPOA’s remaining signatories to cooperate with one another on finding ways to provide Iran with a meaningful economic incentive that in turn could allow Tehran to come back into full compliance with the JCPOA and avoid a much more dangerous escalation.

In a statement issued on 8 May by the Supreme National Security Council (SNSC), which sets the country’s major domestic and foreign policies, Iran announced that it would no longer “commit itself to respecting the limits on the keeping of enriched uranium and heavy water reserves at the current stage”. It went on to present a 60-day ultimatum to the deal’s remaining participants (Russia, China, France, Germany and the UK) to ensure that the economic normalisation envisioned under the JCPOA’s terms, increasingly curtailed in the face of a withering unilateral U.S. sanctions campaign, is addressed. Should the two months pass without a breakthrough by the P4+1, the SNSC warned, “Iran will suspend compliance with the uranium enrichment limits and measures to modernise the Arak Heavy Water Reactor”. In remarks to the Iranian cabinet, President Hassan Rouhani asserted that “we are announcing the reduction of our commitments, not withdrawal from it”.

Iran has opted for minimum retaliatory measures in response to U.S. maximum pressure. This suggests that Tehran hopes to keep the deal alive until the outcome of the U.S. presidential election.

The response from Iran’s JCPOA interlocutors has thus far been cautious and concerned. Russian Foreign Minister Sergey Lavrov, who has been hosting his Iranian counterpart Javad Zarif in Moscow, put the blame for the looming crisis on Washington, citing “the U.S.’s irresponsible behaviour”. The Chinese government, too, suggested that “the U.S. has further aggravated the tension on the Iranian nuclear issue”, while urging that cooler heads prevail. The latter sentiment is also clear in the statements of European parties, but not without an accompanying warning. “There are no sanctions today from Europe because Iran has so far always respected the commitments it has taken”, France’s defence minister explained. “If these commitments were not respected, naturally this question would be asked”. 

There are several lessons from today’s developments:

  1. Iran has opted for minimum retaliatory measures in response to U.S. maximum pressure. This suggests that Tehran hopes to keep the deal alive until the outcome of the U.S. presidential election becomes clear in November 2020. The framing of these measures as in line with the JCPOA’s paragraphs 26 and 36 proves that Iran is trying to remain within the deal’s framework. In essence, Iran is signalling its desire to maintain its strategic patience policy, but coupling that gesture with a warning that its patience is wearing very thin, especially given rising domestic criticism of the Rouhani administration’s restraint.
     
  2. The two measures announced today pose different proliferation risks. Heavy water overproduction would not in the short run enhance Iran’s capabilities to dash for nuclear weapons, if it decided to do so. A new IAEA report is expected later this month, but according to the last one Tehran had 124.8 metric tonnes of heavy water back in February. If Iran continues producing at the same average pace as before (two tonnes per month), it would not reach the threshold before 7 July. As to the low enriched uranium (LEU) threshold, Iran had 163.8kg of uranium enriched to 3.67 per cent. Tehran has the capacity to produce around 100kg of LEU per month. If it does so, it will surpass the limit before the 60-day deadline, and thus start shortening its breakout timeline (the time needed to enrich enough uranium for a single nuclear weapon) from one year to less than that. But Tehran remains in control of how fast it desires to escalate. The good news is that because Iran is still implementing the Additional Protocol to the Nonproliferation Treaty, the IAEA can monitor all of these activities closely.
     
  3. Washington is no position to complain about these Iranian violations, because it committed the original sin by unilaterally withdrawing from the deal last year. Moreover, by revoking waivers for countries to purchase excess production of Iran’s heavy water and LEU last week, the Trump administration had rendered compliance with these commitments nearly impossible for Tehran. So by choosing these two measures as its first response, Iran is making clear where the blame lies.
     
  4. The bigger concern is the 60-day deadline, which raises risks of an escalatory spiral. This agreement's erosion could well pick up pace in the next few months as Washington doubles down on its sanctions and Iran digs in. If Iran restarts work on the Arak heavy water reactor or increases the volume or level of its uranium enrichment in July, it will compel the Europeans to trigger the snapback of the UN sanctions, which will be the kiss of death for the JCPOA.
     
  5. With Iran insisting that they step up their efforts to salvage the deal, and threatening otherwise to withdraw, the ball is now in the court of the deal’s remaining signatories. Europe has done a lot to establish a banking channel, but this step is only one of many to which Brussels committed, and it is not yet operational. The reality is that Russia and China have not done much, either, and the latter seems to have given in to U.S. pressures by reducing its oil imports from Iran. Now is the time for Russia, China, France, Germany and the UK to intensify their cooperation with one another and implement steps that could provide Iran with a meaningful economic incentive that in turn would allow Tehran to come back into full compliance with the JCPOA. For instance, China could continue to buy oil from Iran or Russia could engage in oil swaps with Tehran (with the latter providing some of Russia’s energy needs in the south in return for the former exporting the same amount of oil on Iran’s behalf) and inject the proceeds as credit into the European special banking channel that would allow Iran to import goods from Europe.

The Trump administration’s continuous tightening of the economic squeeze and repeated calls on Europe to exit the agreement always carried the risk of provoking an Iranian response. The administration’s self-proclaimed goals were to change Iran’s behaviour and get a better deal. As should have been clear from the outset, those stated aims were always wholly unrealistic. But they were not the real objectives. For at least some senior U.S. officials, escalation with Iran is and always has been the name of the game. That is precisely what the remaining parties to the deal should strive to avoid.

President Hassan Rouhani visits the exhibition of nuclear technology on April 9, 2019. Office of the Iranian President.

U.S. Maximum Pressure Meets Iranian Maximum Pressure

Eighteen months after Washington quit the 2015 Iran nuclear agreement, Tehran is proceeding with staggered steps away from its own compliance. The deal is unravelling against the backdrop of high regional tensions. A de-escalation along the lines developed by France provides an off-ramp.

The U.S. and Iran: Maximum Pressure, Maximum Peril

Crisis Group's hand-illustrated video draws out the story of rising tensions between Iran and the U.S. and sketches in a way to break the cycle of sanctions and reactions. CRISISGROUP

Iran announced on 5 November that it is moving ahead with incremental breaches of the 2015 Joint Comprehensive Plan of Action (JCPOA). According to President Hassan Rouhani, as of 6 November, Tehran will start “injecting [uranium hexafluoride] gas into the centrifuges in Fordow”, a bunkered enrichment facility that under the deal is meant to be converted “into a nuclear, physics and technology centre”. 

This move is the latest in a series of staggered steps toward downgrading Tehran’s adherence to the nuclear agreement. The process began in May 2019, when the Rouhani administration set a 60-day rolling ultimatum for the agreement’s remaining parties (France, Germany, the UK, Russia and China) to deliver the deal’s expected economic dividends in the face of unilateral U.S. sanctions. It followed through on 7 July with a breach of the JCPOA’s quantitative cap of 300kg on low-enriched uranium and pushed past the quantitative limit of 3.67 per cent enrichment levels. Then, on 6 September, Iran started lifting limitations on nuclear research and development, including the activation of advanced centrifuges. These individual steps have been carefully calibrated to add urgency to diplomatic efforts without sparking an immediate non-proliferation emergency, with Tehran stressing at each stage that its measures are rescindable if the JCPOA’s core bargain – nuclear limits for economic normalisation – is fulfilled. “We are aware of their concerns vis-à-vis Fordow”, Rouhani acknowledged, “but whenever they fulfil their obligations, this step can be reversed”. 

These individual steps have been carefully calibrated to add urgency to diplomatic efforts without sparking an immediate non-proliferation emergency.

On the eve of the U.S. oil sanctions snapback in November 2018, Secretary of State Mike Pompeo was asked if Iran might restart its nuclear program. He responded, “we’re confident that the Iranians will not make that decision”. At the time, Tehran had opted for strategic patience in the hope that its nuclear compliance would encourage the rest of the world to continue trading with Iran in defiance of U.S. sanctions. When that assumption proved wrong, and especially after the U.S. in April 2019 revoked the sanction waivers that had previously allowed eight countries to import Iranian oil, the Iranian leadership started pushing back. 

A senior Iranian official told Crisis Group that “we are in a full-fledged economic war. Even during the oil-for-food program, Iraq, which had invaded another country [Kuwait], was allowed to export its oil. The U.S. can’t strangle us and expect us to do nothing”. As the government in Tehran sees it, responding on the nuclear front serves three objectives: pushing the JCPOA participants, particularly the Europeans, to step up what have thus far been faltering efforts toward relieving the burden of U.S. sanctions; signalling to Washington that the cost of its sanctions will continue to rise unless it provides Tehran with some economic relief; and satisfying public opinion at home. As such, the Trump administration, which was concerned about the sunsets on Iran’s nuclear restrictions, has in practice moved forward the deadline for testing advanced centrifuges from 2026 and resumption of enrichment activities at Fordow from 2031 to 2019.

The other side of the coin of Iran’s nuclear brinksmanship is a volatile regional environment. A series of incidents also transpiring since early May, particularly around the Gulf, dramatically raised tensions in the months that followed: on 12 May, four oil tankers outside the Emirati port of Fujairah were damaged by limpet mines; on 14 May, Huthi drones hit two pipeline segments along the major Saudi east-west oil pipeline; a rocket landed near the U.S. embassy in Iraq on 19 May; a suicide attack in Kabul on 31 May, claimed by the Taliban but blamed by the U.S. on Iran, wounded four U.S. servicemen; on 13 June, two tankers were attacked and damaged in the Gulf of Oman; on 20 June, Iran downed a U.S. drone; on 18 July, the U.S. claimed to down an Iranian drone; on 17 August, up to ten Huthi drones caused limited damage to a gas plant at Aramco’s Shaybah facility; and on 14 September, Aramco’s Abqaiq-Khurais facilities were significantly damaged in cruise missile and drone strikes from as-yet undisclosed points of origin but in what the U.S., Saudi Arabia and the E3 contend was an Iranian operation.

Iran’s deteriorating economic situation has increased tensions in the region. Reuters, Bloomberg, World Bank, Statistical Centre of Iran

Iran’s responses on the nuclear and regional fronts call into question the core premises of the U.S. “maximum pressure” campaign. While the Trump administration’s approach has, without doubt, managed to inflict significant harm on Iran’s economy, Tehran has broken the binary outcome of concession or collapse by instead adopting what it touts as “maximum resistance”. As a result, judged by whether those Iranian activities that the U.S. views with concern have decreased in the face of significant financial duress, there can be little doubt that the strategy has fallen short, delivering impact without effect and rather than blunting Iran’s capabilities only sharpening its willingness to step up its provocations. 

The leadership in Tehran seems convinced that nuclear non-compliance and regional escalation have been more fruitful for them than compliance and restraint during the first year of the Trump administration’s maximum pressure policy. They can point to the uptick in efforts to mediate between Iran and the U.S., notably those led by French President Emmanuel Macron; the decision by some regional rivals, like the UAE, to de-escalate bilaterally; and the absence of direct military retaliation by the U.S. and its allies. Domestic politics, too, could increasingly play a role as Iran prepares for parliamentary elections in February 2020 and a presidential election in 2021: hardliners may welcome increasing tensions with the West as a means of further discrediting the Rouhani camp, which advocated for engagement with the West, while Rouhani’s administration could resort to more brazen escalations in a bid to secure relief from sanctions as a means of boosting its political standing prior to these crucial polls. 

But for Iran to push ahead on either the regional or nuclear fronts, or both, is likely to prove a dangerous gamble. A significant incident involving U.S. forces or U.S. allies could result in retaliation by Washington, which has twice already (after the drone downing and Abqaiq attack) come close to the brink of a military clash with Iran. Iran and Israel are also on a knife-edge, with Israel far less reluctant to take military action. The breaches of the JCPOA could also threaten the deal’s core non-proliferation objectives to such an extent that the Europeans find themselves with little choice but to trigger the deal’s dispute resolution mechanism. That process could result, within the 65-day timeframe defined in the deal, in the snapback of all the UN sanctions on Iran, which could in turn push Iran to withdraw not just from the JCPOA, but also from the Non-Proliferation Treaty (NPT). With mutual consent, however, the adjudication process could be extended indefinitely. 

But for Iran to push ahead on either the regional or nuclear fronts, or both, is likely to prove a dangerous gamble.

A ceasefire deal that would freeze tensions and allow both sides to take a step back from the brink remains the best way out of a dangerous spiral downward. This would require Iran’s leadership to accept the reality that despite President Donald Trump’s interest in a wider agreement Washington is unlikely to revert to its pre-JCPOA withdrawal sanctions posture, and the U.S. to acknowledge that Tehran is unlikely to agree to the kind of high-level summit Trump is seeking with his Iranian counterpart without an assured return. Marrow-deep mistrust is hard to overcome, even when mediators are involved. Referring to Macron’s efforts to arrange a meeting between his Iranian and U.S. counterparts on the sidelines of the UN General Assembly meeting in September, Iran’s Supreme Leader Ali Khamenei noted, “The French president, who says a meeting will end all the problems between Tehran and America, is either naive or complicit with America”. 

A narrower version of France’s initiative, by which Iran would return to full JCPOA compliance and refrain from direct or indirect regional provocations in return for the E3 providing (and, importantly, the U.S. facilitating) a financial reprieve in the form of an increase in Iran’s oil exports offers the best available off-ramp. President Rouhani has talked about reverting to the 1 January 2017 status quo. A more realistic milestone is 1 January 2019, when Iran was able to export about a million barrels of its oil while it was still in full compliance with the JCPOA. At the same time, rumours are circulating about a prisoner swap between the U.S. and Iran. Such an exchange would be an important gesture and a means of opening a sorely needed communication channel.

Contributors

Project Director, Iran
AliVaez
Analyst, Iran