On Monday, a top security adviser to Supreme Leader Ayatollah Ali Khamenei reported that last month American officials had twice approached him in Kabul with offers to renew nuclear talks. The adviser, Ali Shamkhani, denied their request and while US officials have expressed optimism that sanctions will eventually compel Iran to reengage, Tehran has given no indication that it intends to do so.
In late November, Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, threatened that Iran may resume uranium enrichment to 20 percent purity—far above that needed to fuel civilian power plants—unless the European Union ensured the preservation of Iran’s ability to export oil and access international financial systems. Iran’s diplomats and officials have issued such threats routinely since the Trump administration withdrew from the Joint Comprehensive Plan of Action (JCPOA) nuclear deal. But a review of the strategic drivers behind Iran’s decision making regarding Western engagement shows that Tehran is unlikely to withdraw from the JCPOA unless doing so will produce the diplomatic leverage needed to protect Iran's regional successes or forestall pressure that could threaten the long-term stability of the Islamic Republic. Even so, the United States and Europe must remain vigilant.
Despite initial concerns that Tehran would respond to new sanctions by expanding its nuclear program, multiple reports by the International Atomic Energy Agency show that Iran has continued to execute its JCPOA obligations. This is no surprise. Adherence to the deal means that Iran can continue to pressure the European Union to develop workarounds to US sanctions. The recent decision by France and Germany to cosponsor a special payment vehicle to finance trade deals is unlikely to either cover oil sales or protect companies from sanction actions by Washington. However, Iran’s foreign minister will likely point to the decision as evidence that diplomatic engagement can produce sufficient economic benefits to justify a continuation of this strategy.
Tehran probably also believes that adherence to the deal will cause European leaders to think twice before joining the United States in sanctioning Iran for its terrorist activity and prolifically supplying its militia proxies with advanced missile technology, despite the fact that these activities pose a lethal threat to European nationals in the region. Finally, after the Israeli seizure of Iran’s secret cache of weaponization documentation, Tehran’s security leadership may well wonder which element of its program can be kept secret, including any planned expansion.
At the same time, Iran’s domestic political environment has made negotiations with Washington less likely than ever. As recently as August 2018, Iran’s hard-line supreme leader announced that he “prohibits” talks with the United States. Although he and other Iranian officials use the US departure from the nuclear deal as an excuse for this decision, Khamenei continues to see engagement with the United States as the catalyst for a cultural contagion that will infect and undermine the Islamic Republic at a time when it faces unprecedented demographic, ecological, economic, and financial challenges. These pressures themselves likely cause the supreme leader to believe that Iran’s revolutionary society is too fragile to withstand sustained interaction with the United States.
In addition, the supreme leader’s health reportedly continues to decline, and he is almost certainly increasingly focused on the question of choosing a successor. He has ensured the succession machinery is led by hard-line acolytes who can be entrusted with the task of choosing a successor who will protect the revolutionary cultural and political ideals he and his predecessor, the late Ayatollah Ruhollah Khomeini, have championed since the 1979 revolution. Most of the contenders already oppose engagement with the United States, and even Rouhani likely understands that any outreach would doom his hope of replacing Khamenei. Iran’s presidential elections will take place in 2021, at which time potential candidates will face the same political considerations.
Moreover, it is reasonable to believe that Iran’s politically powerful Revolutionary Guard Corps will be loath to abandon—given the treasure and blood involved—ventures that allow Iran a larger voice in the domestic affairs of Arab states and an unprecedented ability to position the front lines of confrontation at the very borders of Israel and its Gulf neighbors. Any Iranian political leader who argues for negotiations with the United States will need to overcome Guard suspicion that Iran’s regional and missile gains will be sacrificed in any new deal. It takes little imagination to believe that the Guard will claim that economic benefits alone would not be worth this potential sacrifice, especially given that the economic benefits of the JCPOA did little to stabilize Iran.
Iran has placed a strong face on its ability to withstand sanctions, but most of President Hassan Rouhani’s most important economic achievements are gone, and further erosion will be hard to avoid. Iranian oil exports dropped from 2.5 million bpd in April 2018 to around 1 million bpd in November. Over a hundred foreign companies have abandoned Iran’s relatively unprofitable market. Also, a number of Iran’s banks have lost their access to the important SWIFT financial message system. Inflation has reached 35 percent, with steep price increases being seen in such staples as meat, fish, fresh fruit, dried fruit, and dairy products. The International Monetary Fund judges that inflation will continue and that Iran’s economy will enter recession, likely contracting by 3.6 percent in 2019.
Turbulence in Iran’s domestic political environment seems here to stay. Strikes over unpaid wages persist, although the widespread unrest seen earlier this year has abated but cannot be stifled. Should Iran endure an unexpected economic or political crisis, sanctions will function as an accelerant to the forces of instability. Thus, Tehran’s leaders are unlikely to risk the additional economic and political turbulence that a withdrawal from the deal will spark, absent evidence that doing so will bring Tehran economic advantages beyond those found in engagement with Europe.
Thus, if negotiations are unlikely, it would be judicious to consider under what conditions Iran might expand its nuclear activities. Fundamentally, Tehran is likely to initiate such activity when its senior-most leadership believes the bite of sanctions will lead to unmanageable political instability or once the moment arrives when Iran believes that engaging in such activity would allow it to squeeze more relief from Brussels. Initially, Tehran may well believe that symbolic technical expansion, combined with threatening rhetoric, will be sufficient to spur the European Union to provide additional economic relief. Even here, Iran needs to be careful that its exit from the deal doesn’t somehow unite the United States and Europe against Tehran.
But this scenario involves no change in the existing diplomatic landscape. Europe’s flaccid attitude toward Iran’s failed terrorist operations, recent missile test, and use of the Houthis to launch missiles against Saudi Arabia could dramatically change if an Iranian-sponsored terrorist attack or missile attack were to result in European casualties. In that eventuality, Europe may feel compelled to respond with sanctions. Tehran, likely to claim that the imposition of such sanctions is a violation of the nuclear deal, will then undertake some nuclear program expansion in order to test European resolve.
In coming months, the tone of Iran’s rhetoric will sharpen as the impact of the recently imposed sanctions is felt and Europe fails to develop meaningful workarounds. However, it is likely that even Iran cannot yet decide when exactly it should expand its nuclear program to bring more pressure. The timing of this decision will depend on a stew of factors including domestic turmoil, the supreme leader’s health, and Tehran’s sense of Europe’s posture toward Iran’s behavior in the region.
Despite this uncertainty, it would be wrong to believe that Iran’s departure from the nuclear deal will remain an unlikely possibility. Indeed, as domestic discontent grows within Iran and as Tehran’s regional activities continue, the expansion of Iran’s civilian nuclear program becomes more attractive to Iranian leaders both as a method of defense and a domestic rallying point. For Washington, the best brake on Iran’s actions will continue to be its ability to show that any expansion of Iran’s nuclear program will serve to strengthen and not fragment multilateral diplomatic and economic pressure against Tehran.