U.S. sanctions pressure on Iran, coupled with the European Union's inability to guarantee economic concessions to keep the Islamic republic in the Joint Comprehensive Plan of Action, have compelled Tehran to resume activities it had promised to refrain from under the nuclear deal. Iran's recent announcements are the most provocative moves it has made thus far, but Tehran has room to escalate its response, meaning that the prospect of a confrontation between Iran and the United States over the nuclear issue remains high.
Iran has resumed the nuclear activities it previously agreed to suspend as a part of the Joint Comprehensive Plan of Action (JCPOA) — the agreement it entered into in 2015 with the United States and Germany, France, the United Kingdom, China and Russia — and Tehran has left room for further action. On July 7, Iran announced that it would no longer cap uranium enrichment levels at 3.67 percent. The next day, its atomic energy agency announced that it was enriching uranium to 4.5 percent. Iran also announced that in another 60 days it would implement a third phase of reducing its commitments to the nuclear deal in response to increased U.S. sanctions pressure.
As expected, the international response to Iran's latest course of action has been negative. The remaining parties in the JCPOA broadly condemned the decision. Discussions between Iran and France over the nuclear program are expected to start July 9. Nevertheless, even as Iran and the European Union exhaust diplomatic options, the prospects of de-escalation over the nuclear issue are limited given the limits of the European Union's ability to provide an alternative to U.S. sanctions
Iran's Conditions for Talks and Staying In the JCPOA
Iran, having failed to achieve a dialogue over its nuclear program, has apparently calculated that escalation may be the best way to get what it wants. Tehran has reportedly demanded the ability to export 1.5 million barrels of crude oil a day — about the level it was exporting before the May 2019 U.S. decision not to renew waivers for Iran's oil customers — in exchange for remaining wholly committed to the JCPOA. Iran's oil exports are now below 500,000 bpd.
But the European Union has no influence over the U.S. financial sanctions that have proved so effective at deterring Iranian oil customers. And now, Tehran's official position is that it will only talk to the United States if Washington removes the JCPOA-related sanctions that it implemented last year. That has been a political nonstarter in Washington, meaning that the prospect of negotiations between Washington and Tehran remains bleak. Nevertheless, Iran could use the Europeans to deliver a message to Washington, that Tehran would consider halting its nuclear provocations or other escalatory actions in exchange for even a partial U.S. sanctions rollback — through more oil purchase waivers.
For now, Iran has refrained from resuming some of the most aggressive activities that have been prohibited under the JCPOA.
Next Steps for the European Union
At this point, the European powers have yet to decide whether to trigger the JCPOA's dispute settlement process, which takes about 45 days. At the end of that period, U.N. sanctions could snap back on Iran automatically without Russia or China being able to veto them. French officials have said that the option is not on the table at the moment, but if Iran continues on a course of escalation, it is certainly an option that the United States, which has abandoned the agreement, will push the Europeans to use. European foreign ministers are scheduled to meet in Brussels on July 15 to discuss the Iran issue — and potentially coordinate a response.
Next Steps for Tehran
Iran has said that it will continue to reduce its adherence to the agreement every 60 days. That deliberate pace demonstrates that the country is trying to proceed carefully to avoid triggering a European push for snapback U.N. sanctions too quickly. Signs that Iran will continue to push the limits of the JCPOA include boosting uranium enrichment to 20 percent, using more efficient and advanced centrifuges to enrich uranium more quickly, and changing the design of the Arak heavy water reactor to its original design, which could facilitate the production of weapons-grade uranium.
If Iran makes more provocative moves, it will increase the likelihood that the United States – or perhaps an ally, such as Israel – would consider a military strike on an Iranian nuclear site to set back its program and lengthen the timeline for the Islamic Republic to build a credible weapon. Thus far, the United States has vowed to respond to Iran's latest acknowledgments with additional unilateral sanctions. Washington has called for an emergency meeting of the International Atomic Energy Agency, scheduled for July 10. The United States will use the forum to push for more international sanctions on Iran – including U.N. snapback sanctions. For now, Iran has refrained from resuming some of the most aggressive activities that have been prohibited under the JCPOA, but that could well change depending on increased U.S. pressure.