What’s new? Prospects of reviving the Iran nuclear deal have swung dramatically, from near certain in March to almost nil in July, then back in the direction of an agreement in August to yet another stalemate in September. Exchanges on a compromise text are still falling short of satisfying all the parties.

Why does it matter? Though the parties remain nominally committed to continuing diplomacy to restore the 2015 deal, an escalatory cycle looms should the talks meander aimlessly or end in failure. Contingency planning for a protracted stalemate or a no-deal scenario could help defuse tensions and manage the risk of a dangerous confrontation.

What should be done? A narrow pathway to a deal still exists. But if talks drag on or collapse, the best way forward may be for the sides to consider single-measure commitments, while respecting red lines to avert nuclear and regional escalation. Thus, they could buy themselves time to envision a more durable accord.

Since April 2021, parties to the 2015 Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal, have sought to revive the agreement abandoned by U.S. President Donald Trump. Negotiations between Iran and its interlocutors – the U.S., France, the UK, Russia, China and Germany, coordinated by the EU – made progress over eight rounds in Vienna. By March 2022, they had yielded a close to final text. Since then, things have backslid: Russia’s Ukraine war has shifted world powers’ focus and hampered cooperation; disagreements between Tehran and Washington on key issues are deadlocked. The EU is trying to find a compromise, but its top diplomat believes that the parties are diverging, making a quick deal seem unlikely. The U.S. midterm elections narrow space for progress. If the parties take no escalatory measures, they may be able to cross the finish line prior to or after the November vote. But the negotiations might drag on, or the gaps prove unbridgeable. If so, the parties will need to pivot to a stopgap combination of single-measure agreements and respect for red lines to manage the risk of armed confrontation.

The text hammered out as of March addressed almost all the substantive issues separating the parties. It laid out how Iran would roll back its nuclear program consistent with the JCPOA’s limits, gave an approximation of what sanctions relief the U.S. would provide and sketched out how to sequence the two sides’ commitments. In parallel, Iran and the International Atomic Energy Agency (IAEA) agreed on a framework for settling outstanding questions concerning Iran’s past activities at undeclared sites. But the IAEA investigation stalled and the sides have become mired in disputes over issues that they had thought resolved or close to it.

At the stalemate’s core stand Iran’s bottom-line demands that the others cannot or will not satisfy. To guard against a future U.S. administration reneging on the deal like Trump’s did, Iran seeks guarantees that the economic dividends afforded by the restored JCPOA will endure. The Biden White House has indicated it cannot meet such a demand, because the administration cannot legally bind successor presidents in the way that Iran wishes. Iran also wants the IAEA investigation into its past work terminated, insisting that it could become a never-ending, politically motivated inquest. But calling it off would run contrary to the agency’s mandate for nuclear accountability, and the U.S. and the three European parties (France, Germany and the UK, or the E3) oppose the idea of doing so.

Recent moves offered a glimmer of hope that the deal might be revived, but that now appears to be flickering. In early August, the EU tabled a compromise text after several days of deliberations with all sides. Since then, Iran and the U.S. have exchanged a series of counter-proposals, but prospects for reaching a consensus document are uncertain. With little sign of Iranian flexibility and growing reluctance among Democrats to engage in a polarising Iran debate in Congress ahead of midterm elections, an imminent breakthrough appears unlikely. What is certain, however, is that escalatory measures or unexpected events could scotch what may prove to be the last chance at salvaging the JCPOA.

While compromise and seeing the Vienna talks through to a successful conclusion remains in all parties’ best interest, the goal of restoring mutual compliance with the original deal may remain beyond reach, in which case an inexorable drift toward a post-JCPOA reality looms. In Tehran, sentiment is bullish about the country’s ability to weather the impact of sanctions and bearish about the value of U.S. commitments to sanctions relief, which many think will end up delivering ephemeral returns, even if they are significant in the near term. In Washington, the political liability of pursuing a contentious deal increases with growing pushback from the agreement’s opponents and Iran’s irreversible nuclear advancements, while the no-deal status quo has yet to become a top-tier foreign policy priority amid other crises. But with Iran’s program closer to weaponisation capability than it has ever been, and operating with increasing opacity, the situation could well escalate into a nuclear proliferation crisis unless the parties move on to a more stable course.

If efforts to restore the JCPOA drag on or, worse, fall apart, the default positions of both the U.S. and Iran are easy to imagine. It is likely that Washington will increasingly emphasise sanctions enforcement and expansion, perhaps with growing buy-in from European allies and buttressed by the threat of force, especially if there are signs – absent for the moment – of Iranian moves toward building a nuclear weapon. For its part, Tehran will almost certainly step up nuclear advances, as well as provocations aimed at the U.S. and its allies in the Middle East, either directly or through its own regional partners. As a result, what has been a tenuous equilibrium of “no deal, no crisis” could prove unsustainable.

If the Vienna talks do fail to produce agreement on restoring the JCPOA, it will thus be vital to keep diplomatic space open by considering alternative ways forward. Contingency planning should start now. Some options that may have been possible at an earlier stage now look moribund. It once seemed that the U.S. and Iran might set aside the JCPOA in pursuit of a more ambitious deal, a “more-for-more” arrangement, but prospects are hardly propitious now, given the mistrust and mismatched expectations on display in efforts to revive an agreement the sides had accepted as a baseline understanding. Nor does a “less-for-less” interim agreement that trades limited nuclear rollback for a discrete set of economic incentives seem particularly promising, because the maximum the U.S. is willing to concede in sanctions relief is likely to fall short of Iran’s minimum requirements.

Against this backdrop, modesty could well be key to the feasibility of any approach. One possibility is to focus on single-step reciprocal gestures (eg, a step on the nuclear front in exchange for lifting one sanction), though even that could prove a bridge too far. Another possibility is that progress on humanitarian issues, including an exchange of imprisoned U.S. and Iranian nationals, desirable in any case, might help create a better atmosphere for resuming nuclear discussions. Finally, whether or not the parties can reach agreement on any of the foregoing, they need to determine red lines and tripwires to prevent mounting tensions on the nuclear and regional fronts from building into an escalatory spiral. The sides can communicate these through European and regional intermediaries. While perhaps not sustainable over the long run, this course may at least buy time for the parties to engage in a fundamental rethinking of the extent to which the paradigms that informed two decades of nuclear diplomacy still hold true, and how they can be constructively revised to avoid a showdown that spells peril for all.

To understand how the JCPOA talks regressed from near success to the point of impasse in a matter of months, it is useful to review their short history. The negotiations aimed to return the U.S. to the deal and bring Iran back into full compliance with its provisions. They began in April 2021, continuing for six rounds until the Iranian presidential election that June. The talks paused during the post-election transition from the Hassan Rouhani to the Ebrahim Raisi government. Then, in the course of marathon eighth round of discussions in Vienna starting in December, they came within touching distance of the finish line in early March 2022.[1]

At that point, the global diplomatic crisis engendered by Russia’s invasion of Ukraine intruded. Whether the parties could have resolved their remaining disagreements if the invasion had not happened can only be a matter of conjecture. On 5 March, however, Moscow injected a demand for sweeping sanctions exemptions for its trade with Iran. It withdrew its objections to the draft text shortly afterward, but by then the European coordinators had already halted the discussions, citing “external factors”. The interruption stole the momentum: in-person negotiations involving all parties stopped for months, and in the interim, exchanges of proposals between the U.S. and Iran, and a brief round of EU-mediated indirect but face-to-face talks in Qatar at the end of June, made little progress. By the time negotiators reconvened in Vienna in early August, some of the gaps that the two sides had narrowed or thought they had closed had reappeared or even widened.[2] While their exchanges then and since have been substantive, lending the talks renewed impetus, they have as of yet failed to deliver a final understanding.

At the heart of the present stalemate in negotiations are three main contentious issues. The first is the IAEA investigation into past Iranian activities involving nuclear material at three undeclared sites.[3] During the Vienna talks, Iran has sought to have the long-running probe unconditionally closed by a predetermined deadline as part of a final agreement – a demand that the U.S. and E3 opposed.[4] Tehran’s concern seems to be that, by shedding light on outstanding questions about the past, the enquiry would validate the information’s primary source, namely its own archival material, which Israeli intelligence operatives smuggled out of Iran in 2018 and shared with the IAEA.[5] A senior Iranian official said, “This probe is a bottomless pit. If we don’t put an end to it at some point, 50 years from now they will still hold our feet to the fire over what happened before 2003”.[6]

Tehran thus has continued to make halting the investigation a precondition for returning to full JCPOA compliance.[7] But Western powers neither can nor wish to dictate how an independent UN agency should conduct its mandate of nuclear accountancy. Nor will they make a political commitment to press the agency to shelve a technical probe in advance of its outcome, which is dependent on the level of Iran’s cooperation with the agency.[8]

On 5 March, IAEA Director General Rafael Grossi said he had agreed to a timetable with the Atomic Energy Organization of Iran to address the IAEA’s concerns.[9] Yet further talks between the two agencies in April and May made little headway.[10] In June, Grossi told the IAEA Board of Governors that Iran had provided no “technically credible” explanations for its past activities, prompting the board to pass a censure resolution, put forward by the U.S. and E3, expressing “profound concern”.[11] Meanwhile, Tehran has pressed for ending the probe during both the indirect contacts with the U.S. in Qatar and the later negotiations. In August, the EU offered another compromise.[12] Its proposal would see the JCPOA stakeholders submit a resolution to the IAEA Board of Governors to close Iran’s safeguards file should Tehran adequately answer the agency’s queries. Iran would keep a veto over the deal’s implementation in case it dislikes the probe’s outcome.[13] Still, Tehran wants the world powers to commit that, no matter the IAEA’s findings, the inquiry will stop.[14]

The second area of divergence is the scope of U.S. sanctions relief, centring around the Trump administration’s 2019 designation of Iran’s Islamic Revolutionary Guard Corps (IRGC) as a Foreign Terrorist Organization (FTO) – a decision the U.S. acknowledged at the time was “unprecedented” because it involved the listing of a state entity.[15] The Biden administration twice proposed to delist the IRGC on certain conditions: once in May 2021, in return for Iran agreeing to negotiate a follow-on “longer and stronger” agreement after the JCPOA’s restoration; and again in March 2022, in return for a mutual commitment by Iran and the U.S. not to target current or former officials amid Iranian efforts to avenge the U.S. killing of a senior Qods Force commander, General Qassem Soleimani, under the Trump administration.[16] Iran rejected the first offer out of hand, and although it appeared ready to accept the second, it backed out once talks halted in March.[17]

The terrorist designation issue then turned into a lightning rod in both Tehran and Washington, limiting both sides’ room for manoeuvre.[18] The U.S. and Iran appear to have moved on from clashing over the designation itself by agreeing to discuss it after restoring the JCPOA, when direct bilateral talks would be possible. Nevertheless, the U.S. has rejected Iranian counter-proposals that would not require full rescission of the designation, such as delisting IRGC-linked economic entities that are named as FTOs under separate U.S. sanctions authorities.[19]

The third and perhaps the most difficult issue relates to Iran’s concerns, which it has aired throughout the negotiations, about the longevity and reliability of U.S. sanctions relief. Reaching an agreement would facilitate for Tehran billions of dollars in additional oil revenue and access to tens of billions more in assets held abroad, but the possibility of a future U.S. withdrawal from the deal could render the benefits short-lived.[20] As an Iranian negotiator put it, “Without economic guarantees that outlast Biden’s presidency, no one will invest in Iran. So, we won’t get the majority of the deal’s dividends, compounded by the political risk of another U.S. withdrawal in 2025”.[21] Some in Iran also worry that the spectre of reimposed sanctions creates short-term uncertainty that is more harmful to the Iranian economy than the long-term predictability of living under U.S. sanctions to which the economy has adjusted. They fear that each time sanctions snap back, the economy experiences deeper shocks.[22]

Still, in worrying that the U.S. could again pull the rug out from under it, Iran’s anxieties are likely more political rather than financial. The leadership cannot help but note that the Biden administration itself, while underscoring its intention to follow through with sanctions relief agreed in a revived deal, acknowledges that a future president could choose to exit the agreement again.[23] Some in Tehran doubt that Washington will keep its word even for the duration of Biden’s presidency, especially if Republicans regain a majority in Congress and use their new leverage to throw a wrench into the deal’s implementation.[24] In such a scenario, Iran’s leaders could find themselves under fire domestically for having entered an agreement with the U.S., only for to it to end in grief again, exposing them to the same charges of naïveté they levied at the deal’s architects in the Rouhani administration.[25]

While the August negotiations made substantial progress on updating the technical text, the sides remain sharply divided on the IAEA safeguards investigation, and Iran continues to press the U.S. on the issue of guarantees to increase the cost for Washington of another exit from the deal. For now, the two sides are going back and forth with counter-proposals.[26]

The challenges to resuscitating the JCPOA were always stiff, as the sides had disparate endgames in mind. For Iran, which perceived itself as the aggrieved party, an important aim was to teach the U.S. a lesson that Washington cannot abandon agreements with Tehran at will and with no cost.[27] Hence its rejection of direct engagement with the U.S. and its insistence on guarantees to offset the impact, if not close off the possibility, of a future unilateral exit. In the same vein, even before Biden took office, Supreme Leader Ali Khamenei and parliament had put in place stringent – and unrealistic – criteria for the U.S. to return to the JCPOA, such as preconditioning Iran’s own restored compliance on the lifting of all sanctions and verification of their removal in practice.[28] Tehran considered the JCPOA’s full restoration the ceiling of what diplomacy could achieve given Washington’s proven unreliability as a negotiating partner; it thus rejected any discussion of a follow-on nuclear agreement, Iran’s missile program or its regional policies, and even ruled out the possibility of more limited quid pro quos.[29]

The Biden administration operated from a very different perspective. Overlooking the degree to which Trump’s policy had undermined the modicum of U.S.-Iran cooperation that the JCPOA had produced, it put the onus for returning to compliance on Iran; treated the JCPOA as a floor for what the negotiations could achieve by proclaiming a “longer and stronger” deal as its objective; and took precious few practical steps to create distance between its own policy and its predecessor’s, leading it to be perceived in Tehran as representing more continuity than change.[30] Moreover, it was, and still is, hesitant to pay the steep political price that a deal with Iran would entail.

Against this backdrop, the negotiations were destined to struggle. When the U.S. put its opening offer on the table, which approached its bottom line on the extent of sanctions relief, Iran’s response was to pocket these terms in anticipation of additional concessions, while rarely countering with other concrete ideas.[31] Besides these problems, the negotiations were hobbled by the procedural inefficiency of being, at Iran’s insistence, indirect: in Vienna, U.S. negotiators were located in one hotel and the Iranian emissaries in another, with European intermediaries shuttling back and forth carrying messages and conveying positions.[32]

The talks faced similar pathologies on substance. As a senior European official put it, “The debate in Tehran and Washington has been anything but rational”.[33] The irrationality has only become more evident as the parties settled into a stalemate after the March suspension of negotiations. In particular, the discussion surrounding Iran’s demand that the U.S. rescind the IRGC’s FTO designation, for now seemingly sidestepped, and its insistence on long-term guarantees of the deal’s viability showcase the disconnect between the perceived and practical significance of the issues on the table.

The political headache posed by lifting the FTO designation far outweighed its real implications. Its lifting would have limited benefits for Iran given the other sets of U.S. sanctions on the IRGC.[34] Although the designation added another layer of sanctions and stigma to an already sanctioned and stigmatised group, it proved largely ineffective in taming the IRGC, which according to U.S. officials has posed an even more worrying threat to U.S. interests in the Middle East since being named an FTO.[35] With or without the FTO rescission, the IRGC would remain one of the most sanctioned entities in the world, radioactive for most multinational businesses.[36] Yet notwithstanding its modest practical significance, the FTO designation assumed an outsized role in the U.S. domestic debate, in which it became a political symbol of toughness on Iran. The idea of rescission faced opposition on both sides of the aisle, underscoring the extent to which it could be a political liability for Biden’s Democratic party in November’s midterm elections.

As for long-term guarantees, these ran up against issues of impracticability. No U.S. administration has the power to bind the hands of a future administration under U.S. law. Nor could U.S. negotiators offer any assurance that Biden or his Democratic party will retain power in the 2024 elections. Given that opposition to the JCPOA is undimmed within the Republican party (and indeed among many Democrats) despite the abject failure of the Trump administration’s “maximum pressure” campaign, another U.S. withdrawal remains a distinct possibility.[37] Still, rejecting a deal now turns future uncertainties around the agreement into a self-fulfilling prophecy in the present. “Predicating the future on a could-be [ie, what the next U.S. president will do] is the definition of insanity”, observed a senior European official.[38]

The limited diplomatic space to strike a deal shrank further in a political environment that became more polarised, as details of a possible agreement trickled out from sources on both sides.[39] One such leak in March hinted that the U.S. was considering lifting the FTO designation to meet Iran’s demand. Israel’s Prime Minister Naftali Bennett and Foreign Minister Yair Lapid promptly issued a joint statement, saying they “found it hard to believe that the IRGC’s designation will be removed in exchange for a promise not to harm Americans. … We believe the U.S. will not abandon its closest allies in exchange for empty promises from terrorists”.[40] After several weeks of high-level discussions between Israeli and U.S. officials, and fierce criticism from influential members of Congress and others opposed to the JCPOA, Biden ruled out an FTO delisting.[41]

The war in Ukraine also adversely affected the negotiations in two ways. First, the crisis put the Iran issue on the back burner among Western powers, which shifted their focus to shoring up Ukraine’s defences in the face of Russia’s assault.[42] Between March and early August, there were no discussions about the deal involving all parties. Secondly, Russia’s invasion empowered the JCPOA’s opponents in Tehran, who concluded they had room to press for advantage in the talks; they argued that Moscow would now join Iran in sanctions busting and that international buyers facing tight supplies and high prices would want Iranian oil.[43]

As the deadlock continued into mid-year, both sides seemed increasingly resigned to the possibility that they would fail to reach a deal. On the economic front, and notwithstanding acute challenges in terms of inflation and unemployment, Iranian leaders appear to view the status quo as not only tolerable but trending in their favour.[44] Moreover, with tentative steps toward regional de-escalation under way – for example, through bilateral Iranian-Saudi talks – they seem to have concluded that discord with the West and détente in the region can go hand in hand.[45]

On the U.S. side, officials view Iran’s posture since March as, most charitably, reflecting a system that has no clear bottom line on its own priorities, divided between those approaching the negotiations as gambit to secure the best terms and those merely seeking to prolong the process and avoid the diplomatic and economic consequences of its collapse. U.S. Special Envoy for Iran Robert Malley described a session of indirect talks with Iran in Doha as “more than a little bit of a wasted occasion”, mainly for that reason.[46] Reflecting the frustration that had built up before the EU reconvened the parties in Vienna, another U.S. official contended, “There’s no proposal on which the Iranians have said yes [since March]. If their system doesn’t have a consensus on returning to the deal, the specifics don’t seem to be the core issue”.[47]

Such doubts as to Iran’s actual endgame in turn harden Washington’s attitude in opposition to offering concessions out of concern that Iran could pocket these, too, while still refusing to close the deal.[48] While the August talks yielded substantial progress, the to-and-fro since, with Iran sending comments on the EU text, the U.S. responding with its own counter-proposals and Tehran in turn dispatching a reply assessed in Washington as “moving backwards”, underscores the challenge of resolving the remaining issues.[49]

Though the diplomatic track remains open for now, the months of deadlock preceding the latest discussions in Vienna have also hinted that a shift to an escalatory approach may have begun, without fanfare, with both sides and other key players – Israel in particular – signalling a willingness to raise the stakes rather than cede the ground needed to conclude a deal.

Tehran’s all-or-nothing approach toward the IAEA of late is one reason to be sober about the prospects of a breakthrough. Despite the agency’s repeated statements of concern about the lack of cooperation with its investigations in the run-up to its June Board of Governors meeting, which made a U.S./E3 decision to introduce a censure vote all but unavoidable, Iran was not fully forthcoming and reacted to the resolution (which merely exhorted Iran to follow through on commitments it had itself made in March) in a disproportionate manner.[50] Tehran promptly increased its nuclear activity and dismantled one third of IAEA’s monitoring equipment after the vote. It continues to expand its enrichment capabilities.[51] A comment by Ali Shamkhani, the secretary of Iran’s Supreme National Security Council, sums up the dominant line of thinking in the national security establishment: “[T]he only way to defend the country’s rights against bullying, whether in #JCPOA or @iaeaorg is reciprocity”.[52]

For its part, in the absence of a breakthrough and against the backdrop of Iran’s nuclear advancements, the Biden administration has sharpened the coercive tools it has been using in an attempt to get Tehran to compromise. Since March, it has regularly unveiled new sanctions targeting Iran’s ballistic missile program, as well as its oil and petrochemical trade.[53] Biden has also stated a U.S. willingness to take military action against Iran’s nuclear program as a last resort, and in the meantime to “continue to increase diplomatic and economic pressure until Iran is ready to return to compliance”.[54] The U.S. has also stepped up efforts to increase coordination with regional allies to stop missile and drone threats, as well as in maritime security.[55] In response to Iran’s provision of Unmanned Aerial Vehicles to Russia, Washington on 8 September announced sanctions against Iranian persons and companies engaged in the development and transfer of drones, and the following day designated Iran’s intelligence minister, and ministry, citing “cyber-enabled activities against the United State and its allies”.[56]

Israel, though not a party to the deal, has strong views about it and its capacity to shape regional dynamics; in recent months, Israel appears to have escalated its campaign of covert operations in Iran and has been calling for a more explicit threat of force as the only way to convince Iran to make diplomatic concessions.[57] Notwithstanding internal disagreements over the merits or demerits of restoring the JCPOA, the Israeli government’s stated view of what would constitute a satisfactory accord remains more sweeping than a mere compliance-for-compliance exchange.[58] As a senior Israel official put it, “We want an acceptable framework of agreement, not the JCPOA, which gave Iran’s nuclear program legitimacy and merely limited its scale. We still think a deal is possible, but the way to reach it is to create a crisis. Deterrence can also quickly produce effects. Iran needs to feel that the regime is in danger”.[59]

Gradual escalation over the past few months has created in both Tehran and Washington the belief that the “no deal, no crisis” status quo is sustainable, but the reality is that both sides are operating on a knife edge.[60] As both have used so much leverage already – with the “maximum pressure” campaign, on Washington’s part, and Tehran’s “maximum resistance” response – there may be little space left for measures that would not provoke a major escalation. Because of advances in Iran’s nuclear program, its breakout time, which is the amount of time needed for Iran to enrich enough fissile material to weapons-grade level for one nuclear weapon, now stands at a mere four days and is shrinking.[61] (When it was being observed, the deal had extended the time from four to over twelve months.)

In parallel, given limits on its monitoring of Iranian facilities, the IAEA’s “continuity of knowledge” about what has and is happening at those sites, which is essential for its ability to account for all nuclear material and equipment in Iran, is increasingly imperilled.[62] “If there is an agreement, it is going to be very difficult for me to reconstruct the puzzle of this whole period of forced blindness”, Grossi has indicated. “It is not impossible, but it is going to require a very complex task and perhaps some specific agreements”.[63]

The combination of continued nuclear development and limited visibility is such that in theory Iran could, for the first time since the crisis over its nuclear program began in 2003, break out and divert fissile material to an unmonitored facility where it could manufacture a weapon without the IAEA’s knowledge. That said, neither the IAEA nor any U.S. or allied intelligence service has publicly said Iran is trying to build a bomb.[64]

Should the U.S. or its European allies conclude that negotiations have run their course, they may avail themselves of the JCPOA’s snapback mechanism, under which parties to the agreement may reimpose UN sanctions. It would likely be France or the UK, both of which are permanent members of the UN Security Council who remain party to the deal, that takes this action. The two countries might also jointly snap back pre-2015 UN sanctions enacted under Chapter VII of the UN Charter, which in the eyes of some countries would turn Iran once more into a pariah state.[65] The mechanism is designed to bypass blocking efforts by other JCPOA participants, but it seems fair to assume that Russia and perhaps China, if opposed, would do what they can to make the process contentious and portray it as illegitimate.

Snapback, in turn, could lead to a worrying response on Iran’s part. Tehran has threatened before that such a step might prompt it to withdraw from the Nuclear Non-Proliferation Treaty (NPT), which obligates non-nuclear-weapon state parties not to acquire nuclear weapons.[66] Such action – even in the absence of concrete evidence of steps toward weaponisation – in turn might convince Israel and/or the U.S. to strike Iran’s nuclear facilities in order to pre-empt any further move toward building a bomb.[67] That Iranian leaders seem broadly dismissive of the threat of military confrontation is even more troubling as it suggests too high a risk of miscalculation or misjudgement.[68]

Developments beyond the realm of the nuclear negotiations could also quickly lead to escalation. A former senior Iranian official suggested that “it [will only] take another assassination of an Iranian nuclear scientist or sabotage of an Iranian nuclear facility for Iran to enrich to 90 per cent or kick out the UN inspectors”.[69] Frictions between Israel and Iran are growing, with reports of near-misses in Iranian-ordered operations against Israeli nationals abroad an indicator of the escalatory dynamic between the two states.[70] More broadly, in the Middle East, what a senior U.S. commander described in July as a “period of stasis” in the U.S.-Iranian standoff could quickly unravel in places where Washington, Tehran and their respective allies have crossed swords in past years. Recent flare-ups between U.S. and Iran-backed forces in Syria, as well as a spate of naval encounters, offer potent reminders of the fluid and combustible regional picture.[71]

When the EU reconvened the JCPOA stakeholders in early August for deliberations about a compromise, it gave the deal what could be a last lease on life, though neither side came to Vienna burdened by excessive optimism.[72] At the talks’ conclusion, High Representative Josep Borrell noted: “What can be negotiated has been negotiated, and it’s now in a final text. However, behind every technical issue and every paragraph lies a political decision that needs to be taken in the capitals”.[73] Still, whatever glimmer of progress emerged from the days of discussions is tempered by the reality that the political decisions to which Borrell referred, notably as they relate to Iran’s willingness to soften its position on the IAEA investigation and U.S. guarantees, remain far from certain to converge on common ground.[74] Any commitment sought by Tehran that subverts the IAEA’s technical mandate is unlikely to fly for the reasons noted above. With respect to guarantees, there is little the Biden administration can offer: it simply cannot make commitments that extend beyond its time in office. More negotiations will not change these facts.[75]

Timing is also a consideration. Whatever measure of momentum has been reinjected into the negotiations may prove short-lived if the parties do not seize it quickly. Each passing day makes the technical text crafted in Vienna more challenging to carry out, particularly with the IAEA’s monitoring so severely hampered. Sands in the political hourglass also work against a resolution. The Biden administration may be increasingly reluctant to proceed with an agreement that will prompt heated congressional debate as November’s midterm elections loom.[76] At the same time, if midterm elections place Republicans hostile to the deal in charge of one or both houses of Congress, Iran may worry that the legislators’ harassment will derail the deal’s implementation, and decide to spare itself the hassle.[77] The leadership in Tehran may prefer to wait and see who the next U.S. president will be in 2025. Iran also has its own presidential election coming up in 2025, which is likely to create further delays.

Although there is still a chance for the Vienna process to generate a successful outcome by year’s end, there is also reason to fear that the current framework may soon be acknowledged as no longer fit for purpose, with the gaps over safeguards, sanctions and guarantees too wide to bridge, and the distrust between the U.S. and Iran too deep to overcome. As such, it is time for the parties to seriously consider alternatives that could help prevent a dangerous escalatory spiral.

In a post-JCPOA era, the parties should try to manage tensions within the framework of a broadly scoped new deal, a narrower new arrangement or a series of one-off agreements on specific issues. They could also seek to build confidence by resolving longstanding humanitarian issues. The range of options includes:

• More-for-more. Given that both the U.S. and Iran seek gains that the other side regards as exceeding JCPOA parameters, they could discuss these demands as part of an arrangement that widens the scope of negotiations. The Biden administration’s desire for a “longer and stronger” deal that strengthens non-proliferation provisions, including by extending nuclear restrictions that under the JCPOA phase out over time (“sunsets”), and more rigorous monitoring is matched by Iran’s wish for a deal that entails more extensive, verifiable and sustainable economic dividends. Even in the current negotiations, Iran asked for relief from U.S. primary sanctions, which apply to U.S. persons and entities.[78] The JCPOA did not touch upon these, except in a few minor areas, and present negotiations likewise grapple mainly with secondary sanctions.[79] As Crisis Group has suggested in the past, a follow-on agreement to a revived JCPOA or one that is negotiated in the absence of restoration should include both more stringent conditions for withdrawal, enshrined in an exit clause (which the JCPOA lacks), and higher costs for the party that violates the deal.[80] 
  
  Yet shifting to a more substantial set of discussions over a more-for-more arrangement is difficult to envision when talks about reviving the existing baseline understanding (that is, the JCPOA itself) have been so fraught. Iran’s refusal to negotiate directly with the U.S. and the increasingly tense relations between Russia and the West add layers of complexity. Even if accepted in principle by both sides, what is likely to be a prolonged and difficult dialogue would still need to first address immediate non-proliferation concerns, with the entire process remaining at the mercy of regional escalation.
   
• Less-for-less (interim deal). Another option would be to shift talks to a more limited interim agreement focused on the most proliferation-sensitive activities Iran is undertaking (eg, seeking to reduce the level of uranium enrichment), along with the restoration of IAEA monitoring and verification, in return for relief from U.S. sanctions on oil exports and/or the release of frozen assets. Such an approach would have the benefits of capping the growing nuclear crisis and giving the U.S. and Iran the capacity to present to domestic critics that they have conceded little, while bypassing the thorny questions of sanctions relief guarantees or sunsets on nuclear limitations.
  
  There is precedent. Iran and world powers reached an interim agreement in November 2013 that opened breathing space for negotiating the comprehensive accord concluded in July 2015.[81] But at the time, the U.S. and Iran negotiated the understanding for the most part through a secret bilateral channel in Oman, and both sides had the political will to freeze the escalatory dynamics. These ingredients are now in short supply, especially in Tehran: indeed, both sides contemplated an interim deal in February-March 2021 before Iran dismissed the idea in favour of pursuing full JCPOA restoration; it was broached again in December, but Iran did not accept.[82] The flip side to having conceded less is also having delivered, on the U.S. side, fewer nuclear restrictions than the JCPOA, and on the Iranian side, only partial sanctions relief.
  
  Many diplomats observing the negotiations do not believe a less-for-less deal is realistic under present circumstances. One senior European official said it would be “impossible”, citing the likely complications of finding a mutually acceptable set of commensurate quid pro quos.[83] The West would likely demand that Iran freeze enrichment beyond 5 per cent, blend down its stockpile of uranium enriched to 60 per cent, refrain from producing and installing additional advanced centrifuges, halt uranium metallurgy work and restore the IAEA’s enhanced monitoring.[84] Yet for Iran, these are key sources of leverage that it will want to have to strengthen its hand in negotiations. It is unlikely to give them away for anything short of a price that would in all likelihood be prohibitive for Washington, not least because any resulting deal would be notified to Congress.[85]
  
  
• Single-measure deal. If the less-for-less option comprises multiple measures in one package, its most modest version would be a single-measure exchange that helps manage tensions and keeps the diplomatic path open. For example, Iran could dilute its existing uranium stockpile enriched at 60 per cent, which is near weapons-grade, in return for the U.S. partly unfreezing Iran’s assets abroad; or Iran could restore the IAEA’s enhanced access as devised in the JCPOA in return for the U.S. lifting restrictions on Iran’s oil exports.
  
  Pursuit of this option entails some of the same difficulties as an interim deal, namely lack of face-to-face contacts, mismatched expectations and domestic political pushback; it will be a challenge convincing Iran to roll back what it sees as its key nuclear leverage for limited financial returns. Conceivably, however, its scope would not reach the threshold of the 2015 Iran Nuclear Agreement Review Act, which requires U.S. congressional review of any new deal with Iran.[86] If successful, the parties could then pursue a series of similar single-measure deals that would eventually bring them to the outcome that a direct attempt at an interim agreement might have produced.
  
  
• Humanitarian deal. There are four U.S.-Iranian dual nationals detained in Iran, while more than a dozen Iranians are in U.S. jails on various charges.[87] The terms of a four-for-four prisoner swap are almost complete – it reportedly also includes Iran receiving some access to its frozen assets in South Korea – but deadlock in the JCPOA talks has hindered the parties in carrying it out.[88] Iran and the U.S. could revive this understanding and wrap it into any of the abovementioned options. Should they fail with respect to those options, they should consider making the swap anyway given humanitarian exigencies, and because securing at least this one understanding could usher in an atmosphere more conducive to talks on political matters.

The political clock in Washington, set against Tehran’s insistence on further litigating terms in the draft agreement, raises the odds against the parties striking a final bargain. If diplomatic efforts drag on or – worse – hit a dead end, and the alternative courses laid out above fail to gather steam, the parties could enter an escalatory spiral that risks triggering a military confrontation. As such, both sides should at least start considering steps to mitigate the potential for escalation, as even the prolongation of an uneasy status quo is preferable to a dangerous cycle of one-upmanship. Both sides would need to make a concerted effort to respect red lines and avoid certain tripwires. In the absence of direct contacts between Iran and the U.S., it would fall to European and/or regional intermediaries to broker an informal understanding about where the tripwires lie.

The first concerns uranium enrichment and nuclear transparency. Assessments that Iran appears not to have moved toward building a nuclear weapon offer little comfort when considering how advanced and opaque Iran’s nuclear activities are at present. Western powers would almost certainly view Iran’s stepping up enrichment to 90 per cent, undertaking weaponisation-related activities or further hampering what remains in terms of international oversight of nuclear facilities under Iran’s safeguards agreement as tripwires that would increase the possibility of a forcible overt or stepped-up covert response by the U.S. and/or Israel.[89] In return for Iran not crossing these thresholds, the West could commit not to snap back UN sanctions – itself a risky step that, as noted, could push Iran to exit the NPT.

Another potential tripwire concerns covert operations against Iranian nuclear sites and scientists, which in the past have hardly disrupted or delayed its activities, and often also prompted Iranian countermoves.[90] Israel has reportedly been mounting more such attacks, under its expanded “Octopus doctrine” of targeting Iranian individuals and facilities involved in nuclear and non-nuclear activity rather than Iran’s regional proxies and partners.[91] The U.S. may be unable to stop Israeli covert action against Iran’s nuclear program, but given the risk such attacks entail for Washington, it should strongly counsel against such measures. Gulf Arab governments with open lines of contact to both the Iranian and Israeli governments could also take a quiet but more proactive role in urging greater restraint.[92]

Reciprocally, Iran should refrain from attacks on U.S. and allied interests. Any U.S. or Israeli fatalities in the region or beyond would risk enflaming tensions. U.S. assessments that Iran still entertains the idea of targeting current or former officials to avenge Soleimani’s killing are also cause for serious concern. This course would be a recipe for U.S. retaliation.[93] It would set off a dangerous new cycle of confrontation if Tehran were to pursue it. To help manage regional tensions, Washington should encourage the tentative steps being taken toward diplomatic engagement between its Gulf Arab allies and Tehran, even as it pursues greater defensive cooperation and intelligence sharing among them and with Israel. It may not be able to defuse the possibility of a regional escalation, but it can at least work to ringfence the fallout.

Steering clear of these red lines and tripwires could thwart an escalatory dynamic for some length of time but would – at best – result in a crisis deferred, not resolved. Neither the conceptual framework nor the methods used in the past can be assumed to apply in present circumstances. Nearly twenty years after the standoff over Iran’s nuclear program began, the core of the bargain for which Crisis Group advocated from the onset to resolve the crisis seems increasingly untenable. On one hand, Iran is now practically a threshold nuclear weapon state and temporary restrictions on its capabilities are unlikely to alleviate its adversaries’ concerns. On the other hand, the West has repeatedly proven incapable of providing effective and sustainable economic incentives to Tehran.[94]

Washington and its allies may believe that, if the JCPOA process is definitively over, they will always be able to look to additional economic pressure or the use of force to protect their interests. But the belief that economic pressure will produce a better outcome is a chimera when Iran holds that the only thing more dangerous than suffering from sanctions is surrendering to them.[95] Moreover, while there may be a military option for setting back Iran’s nuclear program through airstrikes or covert attacks, there is no military solution to the crisis, as an attack is likely to set Iran dashing toward a nuclear weapon, the ultimate deterrent. Iran’s retaliation would probably also involve threats to U.S. assets and interests in the Middle East, risking a protracted military quagmire that the U.S., weary of entanglements in the region, almost certainly wishes to avoid.

The parties to the JCPOA have spent more than four of the six years since the agreement came into effect just keeping it alive. President Trump’s unilateral withdrawal in 2018, followed by a “maximum pressure” campaign of economic and political pressure, threatened to kill it. But with Trump’s departure from office in January 2021, a return to health became possible. For the past seventeen months, Iran, the deal’s other remaining signatories and the Biden administration have worked to revive the deal. Washington and its partners operated on the premise that it was still the best available framework for keeping the Iranian nuclear program in check and under strict international oversight. Tehran was motivated by the promise of large economic dividends. Neither side had a better alternative.

The effort to restore the deal has been an arduous and in many ways peculiar exercise. The parties needed to arrive at not a new accord but a pathway to adapting and re-entering an existing one. Gruelling deliberations bookended long periods of hiatus. There was no direct engagement between the two main protagonists, who seemingly had the same objective but had vastly diverging – perhaps irreconcilable – views of what mutual compliance with the JCPOA entailed in practice. 

In the ornate meeting rooms of Vienna’s Coburg Palace, where the parties worked out the draft text of a renewed JCPOA over the past few months, they inscribed the phrase “nothing is agreed until everything is agreed” on the front page. That has turned out to be the story of the restoration effort, in which many things were agreed, but alas, not everything may end up settled. Thus far, Iran and the U.S. have failed to find common ground on key issues that could very well sink the deal. They might yet have time to bridge the remaining gaps. It falls to both of them to salvage something from what could soon be reduced to nothing. An agreement is still possible, but it requires affirmative political will and recognition of the fact that all alternatives are worse than a deal that, while imperfect, still satisfies most of the parties’ needs.

If they fail to return to compliance with the accord, however, they will face yet more choices about whether – and how – to prevent their four-decade rivalry from degenerating into deeper acrimony. A wise option would be single-measure quid pro quos combined with tacit acknowledgement of each other’s red lines to avert nuclear and regional escalation until the time is ripe for a durable diplomatic settlement.

Tehran/Washington/Brussels, 12 September 2022