By Eric Vandenbroeck and co-workers

The Iran Gamble

After over two years of trying and failing to restore the 2015 Iran nuclear deal, the Biden administration appears to have concluded that the agreement is beyond resuscitation. In March 2022 and again in September of last year, Tehran balked at restoring the pact, the Joint Comprehensive Plan of Action, and instead made new demands it likely knew Western governments could not meet. Since then, Iran has brutally suppressed antigovernment protests at home and provided military aid to Russia, sapping all remaining enthusiasm for restoring the JCPOA in Western capitals. “It is dead,” U.S. President Joe Biden declared in November.

While the negotiations floundered, Iran’s nuclear program advanced in unprecedented and, in some cases, irreversible ways. Since U.S. President Donald Trump withdrew from the agreement in 2018, especially over the past two years, Iran has reached important nuclear milestones. It has stockpiled hundreds of pounds of highly enriched uranium and installed thousands of advanced centrifuges. Iran could produce its first bomb’s worth of weapons-grade uranium in weeks and material for subsequent bombs shortly after that.

Iran has paid almost no price for these nuclear advances in recent months. On the contrary, its geopolitical position has improved. It has bolstered ties with China and Russia while normalizing relations with some of its neighbors, including its regional rival Saudi Arabia. It is easy to see why Supreme Leader Ali Khamenei might believe he can have his nuclear cake and eat it, too.

If the Biden administration has given up on Plan A—reviving the JCPOA—it has also shied away from pivoting to the Plan B proposed by many analysts and Israeli officials: heaping economic, political, and military pressure on Tehran. Instead, it has opted for Plan C to prevent the worst outcomes of the nuclear standoff with Iran while retaining the possibility of resolving it in the future. Washington seeks to prevent an Iranian bomb, avoid the risky escalation that could come with heightened pressure, and kick the can on a diplomatic solution in the hopes that conditions for a new deal to replace the JCPOA become more favorable over time.

But even if it is successful, Plan C would come with costs. It would allow Iran to develop its nuclear program steadily while shaking off its economic and political isolation. And instead of laying the groundwork for a deal that reverses Tehran’s nuclear program, this strategy risks cementing Iran’s status as a nuclear threshold state. As a result, the United States and other interested countries better redouble their efforts to prevent Iran from taking key steps toward a nuclear weapon and complicate Tehran’s efforts to forge new economic lifelines and normalize its nuclear status. This approach offers the best chance of averting the worst-case scenarios of a nuclear-armed Iran or a war in the Middle East while preserving the potential for some diplomatic agreement.

 

The Limits Of Plan C

The Biden administration’s embrace of Plan C reflects its desire to avoid provoking a crisis that would distract from other priorities. It also reflects that the preferred option—a deal that reverses Iran’s nuclear advances and imposes strict limits and transparency measures on its program—will remain elusive and costly for the foreseeable future. In other words, Plan C acknowledges that although the status quo is not good, the alternatives could be far worse.

Even before war erupted in Europe, the Biden administration intended to shift attention away from the Middle East and toward competition with China and Russia. A major showdown with Iran, U.S. officials reasoned, would absorb bandwidth and divert resources away from more critical issues. And within the Middle East, the administration has other objectives that may have a better chance of success, such as brokering a normalization deal between Israel and Saudi Arabia.

As a result, “de-escalation” has been the watchword of U.S. policy toward Iran. In practice, this has translated into lax enforcement of U.S. oil sanctions on Iran and restrained responses to attacks on U.S. forces in Syria and Iraq by Iranian proxies. The United States also agreed to forgo censuring Tehran at a March meeting of the International Atomic Energy Agency’s Board of Governors after Iran was revealed to have briefly produced 84 percent enriched material—just shy of the typical 90 percent level for weapons-grade uranium but still high enough to be used in a bomb if produced in sufficient quantities. In addition, Iran has been allowed to access some of its frozen funds in Iraq indirectly. At the same time, Tehran has permitted a small but insufficient increase in international monitoring of its program.

The Biden administration may believe it can avoid the worst-case scenario—an Iranian nuclear weapon—just by staying the course. Even if Iran keeps expanding its uranium stockpile, Washington hopes that a combination of large-scale drills with Israel, Israeli threats to use military force against Iran, repeated U.S. statements that it will not allow Iran to acquire a weapon, and warnings by Europe that enriching uranium to 90 percent would trigger the reimposition of UN sanctions will deter Tehran from producing bomb-grade material. That it would probably take Iran between one and two years to build a deliverable nuclear weapon—a lengthy effort that would risk international detection—may be a further disincentive for Tehran to attempt a nuclear breakout. A deal may be less urgent if Iran can be deterred by other means.

The political costs of a renewed deal have also increased. The JCPOA was never popular in the U.S. Congress, but the Biden administration was initially willing to take a hit to revive the agreement. Circumstances have changed, however. It is difficult for the administration to ask Congress to support a nuclear deal that would inevitably enrich Moscow’s top military supplier. The memory of Tehran’s violent response to mass protests last year is still fresh, and Iran continues to commit human rights abuses, including executions of demonstrators. With the 2024 U.S. elections on the horizon, the Biden administration is probably loath to wage a fight in Congress, particularly for a deal that would almost certainly contain fewer restrictions on Iranian nuclear activity than the original JCPOA.

But embedded in Plan C is the hope that the prospects for diplomacy may ripen over time. Domestic conditions in Iran may worsen because of sanctions and economic mismanagement. The regime will continue to struggle to meet Iranians’ basic social, political, and financial needs, virtually guaranteeing the recurrence of significant protests. Combining these factors could eventually persuade the regime to seek a deal. And a potential end to Russia’s war in Ukraine could weaken opposition in the United States to diplomacy with Iran.

 

Catastrophic Success

Plan C could still go wrong. Iran could begin accumulating weapons-grade uranium because it believes the United States will not respond to such a provocation or is angered by an Israeli assassination or covert attack. That, in turn, could trigger an escalatory cycle that leads to a U.S. or Israeli military attack on Iran’s nuclear sites.

But success—defined as no Iranian bomb, no escalation, and the prospect for diplomacy at some point in the future—will bring its challenges. Time will not necessarily work in the United States' favor. While Washington waits, Iran will advance its nuclear program, strengthen its relations with China and Russia, exploit weakened sanctions pressure, and become less isolated from the rest of the world. In the past, Iran has been willing to curb its nuclear activities when it believed the risks of continuing them were too high, and it had a credible diplomatic off-ramp. But such conditions are unlikely to materialize anytime soon. Indeed, Iran may believe that its nuclear brinkmanship is finally paying off.

In the coming months, Iran will continue to improve its already advanced nuclear program by expanding its stockpile of enriched uranium, enhancing its centrifuge manufacturing capabilities, and better insulating its facilities from military strikes. Tehran will also continue to gain valuable knowledge by operating larger numbers of advanced centrifuges. These steps will make it more difficult for the international community to curtail Iran’s nuclear program. Nuclear material can be eliminated, but nuclear knowledge cannot.

In theory, by advancing its nuclear program, Tehran will have more chips to play in future negotiations. But Iranian leaders may be reluctant to trade away any progress toward a bomb. Since Iran halted its bomb-making program in 2003, its ultimate nuclear goal has probably been to become a “threshold” or “virtual” nuclear state––a country that can quickly build nuclear weapons if needed. For Tehran, that is not just a technical benchmark but a political one: it would force the world to accept Iran’s de facto nuclear status and thereby reduce international pressure on the regime. Believing they are on the path to achieving this goal, Iranian leaders may see little reason to unwind their nuclear program, especially given their concerns that sanctions relief from the United States is unreliable and hinges on the occupant of the White House.

 

Friends In High Places

Shifting geopolitical winds may also harden Iran’s opposition to a deal. Although China and Russia will likely continue to oppose an Iranian nuclear weapon, both are increasingly running interference for Iran in international forums, and their cooperation with Iran weakens a sanctions regime that might otherwise convince Tehran to cut a nuclear deal. The days of China and Russia working with the other permanent members of the UN Security Council and Germany to contain Iran, as they did to negotiate the 2015 nuclear deal, are likely over for now.

Russia’s invasion of Ukraine has also played to Iran’s advantage, making Moscow more reliant on Tehran’s military capability. In exchange for hundreds of Iranian drones and shiploads of ammunition, Russia has provided Iran with political support, cash, and Western technology captured on the Ukrainian battlefield. It also considers transferring advanced weaponry, such as fighter jets and missile technology, to Iran. That Russia will remain isolated from the West for the foreseeable future only increases Tehran’s leverage with Moscow.

Iran and Russia will continue to compete in global commodity markets, but their economic ties will likely deepen. As the United States seeks to crack down on Russian sanctions-evasion networks, Moscow is working to bolster other trade routes and financial relations, including with Iran, that bypass U.S. restrictions.

Iran is also expanding ties with China, it's core economic lifeline. So far this year, China has imported about one million barrels per day of Iranian crude oil and condensate (a very light liquid hydrocarbon), accounting for about 80 percent of total exports. U.S. sanctions prohibit this trade, but Washington has not enforced them, and energy volumes have risen significantly over the past two years. The longer Washington refrains from acting, the more established and resilient this trade will become.

Beijing and Moscow have delivered less economic support to Tehran than it would probably like, and commercial and political constraints could undermine cooperation down the road. Moreover, these relationships cannot fully replace the benefits Iran would accrue from the sanctions relief that a comprehensive nuclear deal would provide, nor can they free Iran from its economic malaise in the near term. But as long as Iran believes that China and Russia will deliver more than the United States and Europe can, it will likely stay the course.

 

Normalization Without Denuclearization

Dynamics in Iran’s immediate neighborhood also play to Tehran’s advantage. Over the last year, Iran has normalized ties with Kuwait, Saudi Arabia, and the United Arab Emirates, lowering regional tensions. Tehran’s deal with Saudi Arabia, brokered by China in March, could reduce missile threats to Saudi cities and bolster the chances of resolving the conflict in Yemen, assuming Iran abides by the deal.

Although the United States shares the goal of regional de-escalation, the detente in the Persian Gulf complicates Washington’s traditional model for nuclear diplomacy. The Biden administration and the Gulf countries have tried to frame a nuclear deal as a prerequisite to unlocking more significant political and economic ties—an equation undermined by the recent normalization deals. For instance, the United Arab Emirates seeks to increase trade with Iran and, according to one Emirati official, surpasses China as Iran’s top trade partner. Saudi Finance Minister Mohammed al-Jadaan said shortly after the normalization deal was announced there were “a lot of opportunities for Saudi investments in Iran.” Iran’s Minister of Economic Affairs and Finance, Ehsan Khandouzi, visited Riyadh to discuss expanding economic links in May. Although U.S. sanctions will continue to impede economic flows, Gulf states may be more willing to test Washington’s limits over time.

Iran will probably also feel the wind at its back in October when UN restrictions on its ballistic missile program and related sanctions are scheduled to expire. These include a provision, which Iran currently violates, banning it from shipping drones to Russia. If Western governments allow these provisions to expire without a plan to replace them, they will risk sending Iranian leaders the message that their approach is working.

For their part, Western policymakers will likely still see a deal as too politically costly, at least into next year. In addition to supporting Russia’s war efforts and repressing its citizens, Iran has rounded up and detained many dual nationals, especially Europeans. Even if Tehran takes steps to temporarily ease some of these tensions—for example, by releasing American prisoners—it will be hard-pressed to alleviate all of them. Within Iran, parliamentary elections in February 2024 and presidential elections in mid-2025 will likely create additional turmoil and raise the costs of political compromise for hardline Iranian officials. The death of Khamenei, the 84-year-old supreme leader, would kick off a potentially volatile transition period, during which Iran would probably shelve any attempts at nuclear diplomacy.

But there may be a silver lining to this otherwise dim outlook: Tehran’s improved geopolitical position could reinforce its decision not to weaponize its nuclear program—at least for now. To be sure, some within Iran may lobby for crossing the nuclear threshold. But Iran’s nuclear program has always been a means to an end—security, status, independence, and international influence—not an end in and of itself. If it is accruing these benefits, Tehran may conclude that going all the way to a bomb is not necessary and would place those gains at risk.

 

Preventing The Worst

How long can the new status quo last? One inflection point will come in October 2025, when the 2015 nuclear deal’s “snapback” mechanism expires, and the UN Security Council removes Iran’s nuclear program from its agenda. (The Security Council resolution that endorsed the JCPOA remains in effect even though the deal is defunct, and the sunsets on UN restrictions will continue on autopilot unless Western powers trigger the snapback provisions.) The United States and its allies must decide whether reimposing UN sanctions on Iran is worth the risk of Iran producing weapons-grade uranium and leaving the Nuclear Nonproliferation Treaty, which Tehran has threatened to do in response. For its part, Iran will have to decide whether to carry out those threats and accept the risks of disrupting an otherwise favorable environment, including by inviting a potential military strike on its nuclear facilities. It is, therefore, possible that, as the 2025 deadline looms, these risks will concentrate minds in Washington and Tehran on finding a political solution.

Yet the United States need not wait until then to start mitigating the risks of a blowup. Even within the limits of Plan C, Washington could take steps to try to slow Iran’s nuclear progress and its burgeoning relationship with China and Russia.

First, the United States could increase its efforts to deter Iran from further advancing its nuclear program—whether by reaching higher levels of enrichment, diverting nuclear material, resuming weaponization work, or leaving the Nuclear Nonproliferation Treaty. To that end, the Biden administration could organize a joint statement with a diverse set of countries—such as Brazil, India, Japan, South Korea, Turkey, Saudi Arabia, and the United Arab Emirates—to express concern about Iran’s nuclear provocations and the damage that further escalations, such as 90 percent enrichment, would incur. Washington could also encourage these and other countries, including China, to send that message to Iran directly.

Taking a page from its Ukraine playbook, the United States could work with other countries to agree on tough consequences for specific Iranian nuclear steps and make them clear to Iran in advance. If Tehran’s strategy rests partly on developing new global partnerships to normalize its nuclear trajectory, then Washington could seek to deny it that objective.

Second, the United States could try complicating Iran’s outreach to China and Russia, eroding the benefits of Tehran’s pivot east. Washington could ramp up the enforcement of sanctions on Iranian oil exports by raising pressure on intermediary states. It could also work with Azerbaijan, Kazakhstan, and Turkmenistan to expose Iranian-Russian links and complicate sanctions-evasion routes.

Finally, even if the chances of a deal seemed slim, Washington could not give up on diplomacy altogether. For example, it could explore how Iranian-Saudi diplomacy could open the door for regional nuclear constraints—potentially providing some limits on future nuclear activities and assurances against weapons production—while remaining realistic about what such arrangements can achieve. There is little reason to believe that, given the enormous gap between Iranian and Gulf nuclear capabilities, Tehran would be motivated to curtail its enrichment program meaningfully. That tensions between Iran and Saudi Arabia are decreasing precisely when Iran’s nuclear program is reaching new heights probably reinforces Tehran’s belief that it can both move closer to the bomb and have better ties with its neighbors (or worse, that Iran’s nuclear expansion motivated Saudi Arabia to mend fences). Nevertheless, Gulf countries may be able to agree on enhanced transparency measures and stronger nuclear safeguards, commitments not to reprocess nuclear fuel or produce weapons-grade uranium, and perhaps even mechanisms for peaceful nuclear cooperation.

These measures would be a far cry from the stringent limits in the JCPOA, and the United States would still have to contend with Iran as a virtual nuclear state. But in the absence of any real chance of a comprehensive nuclear deal, they may be the best the Biden administration can hope for.

 

For updates click hompage here