What will happen to the US-Iran nuclear deal now?
Anaysis by Mikhail Shereshevsky

ANALYTICS  25 October 2022 - 13:00

The resumption of the nuclear deal with Iran and the talks the US is holding with the Iranians is a question that journalists, analysts, and the military have been discussing for a year and a half. Once there was optimism about the deal, the protracted negotiations became irritating, but the likelihood of their successful completion remained high. Despite the tedious endless wrangling, even a couple of weeks ago the world's leading newspapers were talking about the deal as a done deal. That has changed in recent days.

The Nuclear Deal or Joint Comprehensive Plan of Action (JCPOA; Persian: برنامه جامع اقدام مشترک) is an agreement between Iran and a group of states known as the 5+1, regarding Iran's nuclear program. The group consists of the US, Russia, the PRC, the UK, France - the five permanent members of the UN Security Council - as well as Germany. The gist of the deal, struck in 2015 under US President Barack Obama, was that Iran would give up its uranium enrichment programmes above the level needed for civilian power, a nuclear weapons project. In exchange, the US and other countries lifted the heaviest sanctions, allowing Iran to export oil (which after the deal accounted for 60 per cent of the state budget), buy various goods abroad and receive investment from international businesses. The Iranians estimated that they needed about $500 billion in investment to modernise their backward technology economy, and they were counting on getting the said funds.

Iran's economy grew by 12 per cent in 2016 and, although growth slowed seriously in 2017, the parties were optimistic. It was ended by the new US president, Donald Trump, who unilaterally pulled America out of the deal and slapped Iran with the kind of sanctions that have hit almost every sector of the economy. The Iranian economy has gone into negative territory. Trump's goal, in all likelihood, was to oust an Iranian regime hostile to the US and its ally, Israel, through a popular uprising. Iran has suffered terrible losses, prices have risen sharply, many have lost their jobs and GDP has fallen. But while there have been serious protests in the country since 2017, Trump's main goal - to remove the regime - has not been achieved.

In response, a year later Iran violated the deal (which it had been unilaterally complying with until then) and began to enrich uranium above the envisaged level, i.e., it was getting closer to building a nuclear weapon. At present Iran is not far from producing the required amount of nuclear weapons, and it would probably take about a year to integrate it with its missile systems and obtain full-fledged nuclear weapons.

In addition, the Iranians have made extensive use of their allies - the Yemeni Hussites and Iraqi Shiite militias - to launch missile attacks on US bases as well as the bases, industries, and infrastructure of US allies, most notably Saudi Arabia. In response, the US in January 2020 assassinated Qassem Soleimani, commander of the Quds Force, an elite Iranian force dedicated to overseas operations. The countries were then on the brink of war.

With the return of the Democrats to the White House, Joe Biden's administration is working hard to reopen the nuclear deal. This stance by Biden is due to several factors.

First, Trump's plan did not work. The Iranian regime managed to quell the protests, i.e. was more resilient than Trump and his advisers thought. The Biden administration decided that it would still have to deal and negotiate with the Iranian leadership.

Secondly, a nuclear Iran is unacceptable to Americans. Not that it would be a disaster, but nuclear proliferation could have unpredictable consequences, the world would become more chaotic, and the ability of the US to maintain its hegemony would diminish. For example, the Americans understand that it is possible to bomb a non-nuclear Iran, but it is much more difficult to do so with a nuclear Iran. Furthermore, there would be a confrontation between the two nuclear powers - Iran and its main rival, Israel - which would bring the Middle East to the brink of a nuclear war. Finally, Türkiye, which is competing with Iran for influence in the Middle East, would then also try to acquire nuclear weapons, which may in turn encourage countries competing with Türkiye and Iran - Saudi Arabia and the UAE - to make the same decisions.

Third, the US intends to deal with Russia and China. Their key documents (National Security Strategy and National Defence Strategy) identify Russia as an acute threat and the PRC as a multi-dimensional and strategic threat. Against such a backdrop, the Americans, who are involved in the acute conflict in Ukraine on the one hand, and who dream of neutralizing the influence of China - the new East Asian superpower - on the other hand, have a strong desire to reduce their resources and presence in the Middle East. And besides, the Middle East is no longer as valuable to the US as it was in the past because America has achieved energy autonomy thanks to the shale revolution. In short, the US would like to go back on the Iran nuclear deal and get it over with. They don't want to get involved in an armed conflict with that country, a conflict that remains a possibility in the face of US anti-Iran sanctions, as Iran is not going to sit back and watch the US destroy its economy. Iran regularly uses its proxies to launch missile attacks on US bases in Iraq and Syria, which could trigger a full-scale US-Iranian armed conflict at any moment.

Fourthly, the US, as Russian Iran expert Vladimir Sazhin aptly put it, would like to lift sanctions on Iran in exchange for its abandonment of nuclear weapons in order to "flood the market with Iranian oil" and reduce the cost of oil, which has risen rapidly as a result of events in Ukraine. By doing so, the Americans could reassure their European partners, who had abandoned Russian energy supplies.

In principle, Iran understood all these considerations. The Iranians were happy with the deal. Both President Ebrahim Raisi and the country's Supreme Leader, Ayatollah Ali Khamenei, spoke about it. However, the Iranians put forward a number of conditions, in particular, they demanded the cancellation of sanctions against the IRGC (Islamic Revolutionary Guard Corps), a paramilitary structure declared "terrorist" by the Americans. The fact is that the IRGC owns a large part of Iran's economy. Without removing the IRGC from the list of terrorist organizations, international investments into Iran will hardly be possible. That issue became a stumbling block. Moreover, the Iranians realised that under the next US president, if a Republican becomes president, the deal would likely be cancelled - Republicans are sharply critical of it. So the maximum benefits Iran had hoped for if the deal was renewed would be a couple of years of free trade in oil and the ability to import some goods and technology. Not much, but it would allow the country to improve its ailing economy.

However, literally in recent weeks or even days, things have changed. Two factors are influencing the change. First, the new protests in Iran. Some are already calling them a "revolution". While there is still a long way to go before the regime is toppled, the riots are more serious and longer-lasting than any that have taken place in Iran since 2017. They could not be suppressed within a month. These protests have so far taken place under human rights and liberal slogans. They oppose the Islamic republic's regime, demanding the end of the dictatorship and the restoration of women's rights, including the right to determine what clothes to wear. The riots erupted after the killing of a 22-year-old girl, Mahsa Amini, who was beaten to death for "improperly" wearing a hijab by the vice squad. The protesters' main slogan is "Woman, life, freedom!"

So what happens? Suppose the US agrees with Iran to reopen the nuclear deal. Then a flood of money from rising oil exports would pour into the Iranian regime. That will give the regime more leverage to quell protests. So the White House, led by the Democratic Party, which constantly talks about human rights and the need to respect them around the world, would help the Iranian dictatorship to beat up and maim women protesters in the streets? Such an image is not necessary for the Biden administration, especially on the eve of the mid-term congressional elections due in November.

Secondly, the issue of Iranian arms sales to Russia is still being discussed in the United States. National security official John Kirby said that Iran is currently engaged in direct combat operations in Ukraine. This includes providing weapons to Russia. The US has accused Tehran of providing drones to Moscow. Iran denies involvement, but that no longer plays a role.

It is fundamentally important for the US to ensure Ukraine's success on the battlefield, and this is not only important in the context of confrontation with Russia. It is important for the Americans to show China (using Ukraine as an example) that its attempts to intervene militarily in Taiwan will be firmly opposed. The conflict in Ukraine and the creation of conditions for the success of the AFU are of key international importance for Washington. And here Iran is acting as Russia's enabler. In the new environment, a nuclear deal designed to pump money and modern technology into Iran (in exchange for its abandonment of nuclear weapons) would be a way to help Iran develop and produce new weapons and supply them to Russia, which threatens Washington's central objectives. Would the US agree to a nuclear deal in such a situation?

The Biden administration is a team of people, many of whom have held key positions since the Obama era. They are not just Biden himself, but Tony Blinken, head of the State Department, Jake Sullivan, national security secretary, William Burns, director of the CIA, and a number of others. One of them, Robert Malley, oversees the Iranian direction, being the US special envoy to Iran. It was he who became the architect of the US policy of returning to the nuclear deal.

Malley is behind the informal loosening of US enforcement of anti-Iranian sanctions. The Iranians, according to figures published by the Wall Street Journal (WSJ) and the Jerusalem Institute for Strategy and Security, have been able to increase their oil exports to 1.2 million barrels per day (China is the main buyer) and expand other export-import operations. Gholamreza Mesbahi-Moghaddam, an Iranian politician close to Supreme Leader Ali Khamenei, stated last January that secret import-export operations amount to $80 billion a year. The International Monetary Fund estimates it will rise to $150 billion in 2022, including sales abroad prohibited by sanctions. All because Malley and Biden are looking the other way on these violations. Obviously, they want to show Iran that they are cooperative and at the same time, to throw additional amounts of oil on the market. However, it is estimated that the nuclear deal would allow Iran to improve those numbers by increasing its oil exports to 2, if not 3, million barrels per day.

But here's the question. Will the US go for the nuclear deal today? Does it contradict their interests in light of two developments - the uprising in Iran and the help Iran is giving to Russia? Malley is considered a fanatical supporter of the nuclear deal. But pressure is mounting on him and the entire Biden administration to roll back negotiations with Iran and increase anti-Iranian sanctions.

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