New momentum? The US, Iran, and the fate of the JCPOA

Even as international attention focuses on Western negotiations with Russia over European security, another key global issue is fast approaching crunch time. The fate of the Iranian nuclear deal, the 2015 Joint Comprehensive Plan of Action (JCPOA), hangs in the balance.

Modest progress in recent negotiations has provided some optimism that the gap between the parties may be narrowing for the first time since the inauguration of the hard-line Raisi administration last August. But a moment of decision looms large: the United States and Iran – the two key powers in the negotiations – need to quickly decide whether the deal merits the steps required to give them both what they want. With talks in Vienna now in their eighth round, there appears to be an international commitment to achieving a deal, possibly via an initial interim arrangement. But the parties will have to make hard compromises on key issues related to sequencing, economic guarantees, and the roll-back of Iran’s nuclear programme before time runs out.

The source of the new momentum in the talks appears to be less a full-hearted embrace of the value of the deal – let alone the belief that it can be a platform for subsequent talks on wider issues – than a sharpening realisation that there are no better options on the table. From a Western perspective, in particular, the collapse of talks would risk accelerating Iran’s move towards increased uranium enrichment, with recent discussions of alternative approaches – a Plan B – looking increasingly hollow.

A new deal would not be perfect, but would nonetheless provide important non-proliferation gains. For the P5+1 (the permanent members of the UN Security Council, plus Germany), a revived JCPOA would cement monitoring mechanisms and important safeguards against an Iranian rush towards the development of a nuclear weapon. To be sure, some will see this as sub-optimal, believing that stricter measures are needed given Iran’s nuclear advances since 2015 (including in irreversible research and development capabilities). The agreement’s sunset clauses, which will see some restrictions on Iran’s programme lifted in 2025 and 2030, are also fast coming into view. Moreover, some leaders in Europe and the Middle East are concerned that a weak new deal would provide the US with a regional exit strategy, leaving them vulnerable on other fronts.

But the gains of a revived JCPOA still offer a far better outlook than the alternatives. Western governments are indicating that Iran will come under renewed pressure if the negotiations collapse, with the snap-back of UN sanctions one mooted option. But this would essentially involve a return to former US president Donald Trump’s failed ‘maximum pressure’ pressure campaign against the country. This strategy only accelerated Iran’s nuclear programme, pushing its uranium enrichment levels from 3.67 per cent under the JCPOA to more than 60 per cent today – dangerously close to the 90 per cent needed for weapons-grade uranium. Iran’s breakout time – the period needed to produce enough weapons-grade enriched uranium for a nuclear bomb – is now estimated at just one month (though the country would then face other obstacles turning this into a usable weapon).

The past four years have taken the sting out of the threat of wider sanctions, with Tehran learning to live with intense US measures. Moreover, unlike in the pre-JCPOA era, it does not seem that China would entirely play along – even if the country appears committed to preventing Iran from securing a nuclear weapon. China is already working around US sanctions by buying Iranian oil – reportedly up to 20 million barrels of it per month, largely via Malaysia and the United Arab Emirates. This provides Tehran with critical revenues to work around US pressure (while also positioning Beijing as the key international actor with leverage over Tehran).

Ultimately, intensified US economic pressure is likely to result in the same outcome as it did under Trump: an acceleration of Iran’s nuclear programme spurred by Tehran’s desire to regain leverage over Washington. Iran could move towards the enrichment of weapons-grade uranium – although it remains unclear whether it would take this final step. The Biden administration would then come under growing pressure to counter Iran’s advances with military force, even though it is becoming increasingly clear that the space for a military response is extremely limited – in terms of not just significant operational constraints but also the risk that it would push Iran to build its nuclear programme back better. At this stage, military action would likely do little more than delay Iran’s nuclear programme for two or three years, while almost certainly provoking Iranian retaliation. Even Israel, long the JCPOA’s harshest critic, seems to be slowly acknowledging this reality, with more Israeli leaders coming out in support of a new deal.

Military action could have devastating repercussions across the Middle East, potentially thrusting the US and Israel into conflict with Iran in a range of theatres, including Lebanon and Iraq. In doing so, the US would also disrupt the much-needed rapprochement between Iran and Arab Gulf states that has developed in the past 18 months. A revived JCPOA would provide space for the continuation of this regional diplomacy, but it would be placed under considerable pressure if nuclear negotiations collapsed. Countries such as the UAE, wary of perceived US disengagement and of being caught in the crossfire of a regional conflict, would want to hedge their bets and would be unlikely to fully embrace a new maximum pressure campaign. But Washington would press them hard to cut political and economic ties with Tehran, obstructing diplomatic efforts to stabilise the region. At worse, an attack on Iran could pull Arab Gulf states directly into a regional war.

These complicating realities may eventually force the US and European countries to accept Iran as a threshold or nuclear state, and to adopt an accompanying policy of containment. This outcome could well prompt other Middle Eastern states to develop their own nuclear programmes.

If the alternatives appear bad for the West, they may seem less so for Iran. The country has learnt to live with sanctions and is experiencing renewed economic growth, while its hard-line elites appear intent on using the confrontation with the US to help maintain their grip on power. Moreover, Tehran has misgivings about the benefits of fully re-entering the JCPOA – doubting that the agreement will deliver the promised economic benefits given that it failed to do so after 2015. This concern, which is exacerbated by the risk that a new US president could once again upend the deal in 2025, is behind Iran’s strong demand for guarantees.

These dynamics have led some to conclude that Iran does not want a new deal and is dragging the negotiations out to buy time to advance its nuclear programme. But the Iranian government, facing constraints of its own, still appears to value some benefits of a deal. This could explain why it appears to have taken a more constructive approach in recent weeks. As my colleague Esfandyar Batmanghelidj argues in a series of pieces for the European Council on Foreign Relations, the Raisi government needs to respond to the Iranian public’s support for a new agreement and the repeal of sanctions, while also appearing to strike a better deal than its reformist predecessor. The latter aim may have spurred the government’s decision to delay the negotiations and take a more confrontational approach than its predecessor. Even if the status quo is manageable and the impact of sanctions relief is uncertain, a new agreement would still provide Iran with a range of considerable automatic benefits, likely including oil revenue of at least $20 billion in the first year.

The Iranian government could also frame a new deal in a manner that resonated with its ideological posturing: not as a bridge to wider negotiations with the West but as a one-off transactional agreement to Iran’s benefit. On this point, it seems clear that a new deal would not be a platform for Western-Iranian negotiations on wider issues such as Iran’s regional activities, as some had hoped for from the 2015 agreement (and which the Biden administration initially wanted to pursue as part of a “longer, stronger but also broader deal”).

Against this backdrop, the United States and Iran may slowly be converging on a shared commitment to completing a new deal. This does not mean that it will be easy to reconcile their differences over how to bring Iran’s nuclear programme back in line with JCPOA provisions and provide Tehran with the necessary guarantees. Neither will draw back from its core positions. The negotiations still face the very real prospect of failure. But one can only hope that there is now enough momentum to secure the Plan A option represented by a return to the JCPOA.