West in a quandary over Iran nuclear deal

For months, the West has been hardening its rhetoric against Iran as the Islamic republic has cracked down on protesters and sold drones to Moscow that Russian forces have used in the war against Ukraine.

The US, UK and EU this week imposed new sanctions on dozens of Iranian officials and entities in their latest attempt to increase the pressure on Tehran. The UK is also reviewing whether to proscribe the Islamic Revolutionary Guard Corp as a terrorist organisation, while the European Parliament has called for the blacklisting of the most powerful wing of the republic’s state security forces.

Yet even as relations touch new lows, US and European officials are keeping the door open to diplomacy to save what is left of the moribund 2015 nuclear deal Tehran signed with world powers.

That is not because they are optimistic about a breakthrough – there have been no nuclear talks since Iran rejected a draft proposal to revive the deal agreed by the accord’s other signatories in August. Instead, it is a reflection of the dilemma western powers face as they consider their limited options to stop Iran from expanding its aggressive nuclear programme.

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On the one hand, they fear that pulling the plug on the nuclear diplomacy would hand Iran a propaganda victory by enabling it to blame the West for the collapse. They are also wary of triggering a broader crisis by ending all avenues of diplomacy with Tehran, diplomats and analysts say.

On the other hand, western countries do not want to engage with Iran while it sells drones to Moscow and uses repression to crush civil unrest at home, including executing demonstrators. They also worry that there are no credible alternatives to the accord, known by its acronym JCPOA, that can prevent Iran from acquiring the capacity to develop nuclear weapons.

“We know that [Iran] are following a steady path of progression on their nuclear programme,” said a senior US official. “It’s one that’s extremely concerning and that we still believe is far better tackled through diplomacy than any of the alternatives.”

Other options include seeking a more limited deal, military action, or a return to former US president Donald Trump’s “maximum pressure” strategy against Iran that increased tensions across the region.

Trump sparked the nuclear stand-off with Iran by unilaterally withdrawing from the accord in 2018 and imposing waves of sanctions on the republic. Tehran responded by aggressively expanding its nuclear programme. It is now enriching uranium at 60 per cent purity – its highest level and close to weapons grade. It has also been accused of attacking tankers and oil infrastructure in Saudi Arabia.

President Joe Biden pledged to rejoin the deal and lift many sanctions if Tehran returned to compliance with the accord. But more than a year of EU-brokered indirect talks between Washington and Tehran failed to secure an agreement, with each side blaming the other for the deadlock.

The US official described the accord as now in “the deep freeze”. Analysts say both the US and Iran are sticking with a “no deal, no crisis” status quo in which neither crosses red lines that would lead to an escalation.

“The Iranians are not pushing for a deal. They understand even if there’s an agreement that provides sanctions relief, it’s going to be minimal, so it’s become even harder for anyone to stick their neck out for a deal,” said Ellie Geranmayeh, an analyst at the European Council on Foreign Relations. “It’s the same for the US. Biden doesn’t want a crisis with Iran, nor does he want a deal, so everyone is just hoping this situation can simmer along.”

But analysts say such an approach is unsustainable and risks a miscalculation by one party that triggers an escalation. Diplomats and analysts say one option could be to seek an interim agreement that keeps a lid on Iran’s nuclear activity in return for limited sanctions relief.

“There’s now interest in what type of other deal could be done,” said a western official. “If we do nothing, Iran gets closer and closer to 90 per cent purity uranium enrichment and there’s the real risk of misunderstanding and escalation.”

Ali Vaez, Iran project director at the Crisis Group think-tank, said there was “no other option available, because support for the JCPOA, even among Democrats, is now questionable”. But he added: “Even a limited deal is hard to imagine in the current circumstances.”

That would become less likely should the UK, one of three European signatories to the accord, or the EU push ahead with the designation of the Revolutionary Guards. Iranian officials have said the country would respond, while analysts say it would risk a severing of diplomatic ties.

“The European Parliament shot itself in the foot,” Iran’s foreign minister Hossein Amirabdollahian said on Sunday, adding the parliament in Tehran would put European armies on its own terrorist list.

EU foreign policy chief Josep Borrell said this week that the bloc could not formally designate the Revolutionary Guards until a national government’s judiciary ruled that the force was a terrorist group. But officials said that could come after a political decision to move ahead on designating the organisation, which would require the backing of France and Germany, the other European signatories to the accord.

“No one wants the JCPOA to die like this,” said a senior EU official, warning that it would be difficult for the nuclear talks to survive a designation. “What we’re left with at that point is a return to ‘maximum pressure’,” the official added. “And we know how well that worked last time.”

– Copyright The Financial Times Limited 2023