On Sunday 7 July, Tehran officially declared its intention to scale back on the limitations of the Iran nuclear deal for a second time by breaching the 3,7% enrichment threshold established in the agreement. The new enrichment level of 5%, however, is still far from one that would indicate non-civilian use.
The Iranian authorities, moreover, signalled their intention to continue to gradually reduce the compliance to the deal at a 60-day rate, unless a feasible solution is reached to safeguard Iran against the crippling US sanctions and guarantee the survival of the agreement itself. This represents the first radical escalation since Washington’s withdrawal from the agreement on 8 May 2018 and, although deliberately minimal, it drew international condemnation, both from the deal’s signatories and regional stakeholders such as Saudi Arabia and Israel.
Although still far from the 90% enrichment levels that would be necessary to weaponise the uranium, Iran is showing its intention to retaliate to the recent increase in sanctions imposed by the US, which virtually eliminated its oil revenue completely by slashing the waiver for some countries to import oil, steel or copper from Tehran. All sides have repeatedly declared a willingness to talk and negotiate, but the bilateral rhetoric between the US and Iran is only showing signs of escalation, while the recurring talks in Vienna with the remaining members of the deal suggest little chance of a permanent solution
The International Atomic Energy Agency (IAEA), global nuclear watchdog, had officially deemed Iran compliant with the agreement, which it remained for one full year after the American withdrawal. In an attempt to save the deal in the absence of one of its biggest stakeholders, the EU promised Tehran a solution to make up for the large losses in revenue that the US imposed sanctions were producing, which caused a rise in inflation and drove away the international investments that Iran had managed to regain.
However, the imposition of even more stringent sanctions and the hostile diplomacy from President Trump, who declared Iran’s Revolutionary Guard Corps (IRGC) a terrorist group and accused Iran of conducting a covert campaign against the Arab oil exports, fundamentally frustrated any attempt by the EU to make compliance to the deal seem less one-sided for Tehran. The main motivators for Iran’s participation to the deal were, in fact, a desire to establish itself as a source of stability in the region and escape the mounting UN and internationally imposed sanctions that were damaging key sectors, crippling its economy and, by extension, weakening the self-preservation of its leadership.
The recent decision by Washington to create an oil embargo against Iran fundamentally undermined the EU’s effort to keep the deal intact, by making it impossible to match the same levels of revenue that Iran could achieve through the oil trade, which is likely to ultimately cause the agreement to cease. This damages the future multilateral efforts towards effective counterproliferation: by depicting both the EU and the US as unreliable stakeholders, whose commitment can vary depending on the current administration, President Trump showed the inherent reversibility of any commitment towards the lifting of sanctions, which has a very different time-frame compared to the development of nuclear weaponry.
In the past two years, Iran has seen a significant level of unrest and insurgency at a domestic level, culminating with the wave of economic protests that broke out in December 2017 and that continued through the following year, slowly turning economic grievances into a criticism of Tehran’s theocratic regime.
The support for the regime’s foreign endeavours, such as the nuclear deal and the war in Syria is eroding as the population grows frustrated with the economic stagnation. At the same time, hardliners in Tehran’s political and military establishment are gaining power as their accusations of an attempt by Washington to cause a regime change are reinforced by Trump’s “extreme pressure” policy. Iran’s leadership finds itself faced with a conundrum where finding a solution to the American’s oil embargo is paramount, but where an absence of retaliation to Washington’s hostility would be viewed as an international show of weakness. The decision to gradually reduce its compliance to the deal is fundamentally driven by a desire not to antagonize the EU, Russia and China, and face economic and political isolation, whilst also signalling the urgent need to find a solution feasible for all participants.