Shadow Government

There Is Still Time for Diplomacy With Iran

The risk of war has risen. But a diplomatic solution remains likely.

Iranian demonstrators carry a portrait of Iranian Ayatollah Ali Khamenei and an effigy of U.S. President Donald Trump at a rally in Tehran on May 10.
Iranian demonstrators carry a portrait of Iranian Ayatollah Ali Khamenei and an effigy of U.S. President Donald Trump at a rally in Tehran on May 10. Stringer/AFP/Getty Images

Iranian President Hassan Rouhani announced this week that Iran would stop complying with certain elements of the 2015 nuclear agreement. The announcement, a year after President Donald Trump pulled the United States out of the multiparty pact, was not a surprise. And it did not cause an immediate crisis, but rather set off a slow-motion march that could eventually end in war. There is no question that the situation just got much more dangerous—but there is still time and opportunity for diplomacy.

For the past year, the Iranian strategy had been to stay in the nuclear deal, try to isolate the United States politically, avoid a military confrontation, and try to win economic benefits from China, Europe, and Russia. The European parties to the deal have explicitly tried to deliver economic benefits to Iran. Their companies will not deliver on that commitment, however, because it would mean violating U.S. sanctions and risking loss of access to the U.S. banking system.

This week, the Trump administration imposed new sanctions on Iran’s metals industries and prepared to move more military assets to the region. Last month, it dramatically ramped up pressure by pressing importers of Iranian oil to halt all purchases, about 1 million barrels of oil—dealing a major blow to Iran’s economy. Shortly before that, the U.S. government announced a high-profile designation of Iran’s Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organization. In response to these actions, the Iranians have signaled that they will begin taking steps outside of the nuclear deal.

These are grave developments that signal the potential for reckless destabilization in a volatile region on the part of well-armed and deeply entrenched U.S. adversaries.

The good news is that the Iranians are playing it slow. Rouhani announced that Iran would begin stockpiling low enriched uranium and heavy water above the limits stipulated in the nuclear deal. He did not indicate that Iran would begin spinning more centrifuges, enriching to higher levels, or restart construction on a heavy water reactor. Most importantly, he did not say that Iran would reduce its compliance with inspections.

For now, this is rhetoric and saber rattling. If Iran pursues these steps it will be months before it has enough enriched uranium for even one nuclear weapon—let alone an arsenal. In other words, Iran is not on the verge of a nuclear weapon that will threaten the United States, Israel, Saudi Arabia, or the rest of the region in the immediate future.

Rouhani also said that if in 60 days the remaining parties to the nuclear deal do not find a way to meet their obligations under the agreement, Iran will take further steps to restart its nuclear program. Iran wants its oil buyers to stand up to U.S. sanctions and keep a lifeline of hard currency flowing to the isolated nation.

What Iran appears to be doing is continuing the strategy it has pursued for the past year while trying to project greater resolve for the purposes of national pride, domestic politics, and future negotiating leverage.

China, Europe, and Russia will do all they can to dissuade Iran from building out its nuclear program and encourage a return to the nuclear deal. This will include stern words for Iran about the need to abide by its nuclear obligations and the threat that Europe will join the United States in reimposing major sanctions if it does not.

In addition, China, Europe, and Russia are likely to try to offer inducements in the form of economic benefits to encourage Iran to continue adhering to the deal. Europeans may try to accelerate development of the British-French-German nonbank financial vehicle to facilitate humanitarian payments between Iran and European firms. This promises little actual international financial flow, but it’s an important symbolic source of European support for Iran and the nuclear deal.

China will likely protest the oil sanctions and seek dispensation to continue to purchase Iranian oil. Other nations outside of the nuclear deal, but significant to Iran’s revenue streams, will also protest the sanctions and plead for leniency. India and Turkey are scrambling for strategies to replace Iranian oil but don’t want to break up with this important supplier.

Ultimately, Iran is likely to be disappointed by the meager economic flows that China, Europe, and other nations outside of the deal can supply. No significant international company or bank will risk violating powerful U.S. sanctions and the extraordinary financial and reputation costs that go along with that. What’s more, Iran is a difficult environment in which to operate for foreign companies, and opaque, sanctions-toxic IRGC business structures litter its economy. Iran will have to make do with business ties to relatively small foreign traders, firms, and financial institutions far from U.S. jurisdiction that can manage to operate even if they are hit by U.S. sanctions.

Still, since Iran does not want a major escalation, one could see a scenario in which it extends its 60-day deadline. This is especially likely if China, Europe, and Russia enter more intricate negotiations with Iran to try to deliver greater economic benefits.

But if it takes longer than 60 days, looking months into the future, it is hard to imagine a scenario in which Iran does not wind up unhappy with what it gets. Eventually, it is likely to respond by slowly but surely building up its nuclear program. It will install more centrifuges, increase its production capacity, and move to a more enriched form of uranium that will bring it meaningfully closer to a nuclear weapon. But it will try to leave open the option for negotiation and try to avoid steps that unify the world against Iran.

Indeed, what the Iranians might still be doing is buying time until after the 2020 elections in the United States. A new U.S. president may offer Iran a viable opportunity to reenter negotiations. If Trump is reelected, Iran may eventually choose to pursue the approach North Korea took: dramatically escalate its rhetoric and provocations. After building leverage, Iran could eventually agree to a summit with Trump to deescalate tensions and win concessions. However, these types of tactics always increase the risk of miscalculation and war.

For now, though, conflict does not appear imminent.

First, Trump is not interested in another war in the region. He has consistently railed against U.S. military investment in the Middle East, and his instinct has been toward withdrawing U.S. troops from the region. The administration’s stated position is that it wants to apply greater pressure on Iran to return to the negotiating table for a comprehensive deal on nuclear and other issues tied to Tehran’s regional behavior.

The Israelis will raise the alarm as Iran rebuilds its nuclear program. Israeli Prime Minister Benjamin Netanyahu may start talking about the possibility of military action. However, he spent three years from 2009 to 2012 threatening military action against Iran’s nuclear program but ultimately chose not to pursue it because the risks were too high. Netanyahu would likely be pleased to see a U.S. attack on Iran, but he would prefer not to take on that fight on his own. Similarly, Trump would support an Israeli strike on Iran’s nuclear program, but he seeks to avoid a scenario that would drag the United States into another quagmire.

Another indication that no conflict is imminent: At the end of the day, the Iranians have no appetite for a conventional military confrontation with the United States. While Iran pushes the envelope in the region through its support for violent surrogates and proxies in Iraq, Lebanon, Syria, Yemen, and elsewhere, it also wishes to avoid a major conflict with the United States that it knows would end badly for itself.

But no one should feel complacent about the situation. The risk of conflict, particularly driven by unintended escalation, has certainly increased. There are hard-liners on all sides who believe a direct military conflict is inevitable. U.S. National Security Advisor John Bolton has a long track record of supporting regime change in Iran and may support military action. His statement earlier this week tying a long-planned carrier deployment to the Middle East to Iranian behavior and threatening “unrelenting force” was unnecessarily provocative. Any U.S. administration with intelligence regarding potential attacks on American interests would respond, seeking to deter Iran. But Bolton’s escalatory statement was over the top and, according to a number of military and intelligence officials, an “overreaction” given the nature of the intelligence.

On Iran’s side, the Quds Force continues to arm and train Lebanese Hezbollah militants, Shiite militia groups in Iraq and Syria, and the Houthis in Yemen. The irresponsible tactics of the IRGC Navy around the Strait of Hormuz could certainly lead to a dangerous incident that in this environment could spin out of control.

The bottom line is that the current environment is highly combustible. The Trump administration’s policies have resulted in an Iranian nuclear program that is less constrained. These policies have separated Washington from its allies and generated a major test to the U.S. sanctions architecture that will demonstrate cracks and breed small-scale but reliably ongoing cheating. A war is not imminent, and the most likely outcome is still a diplomatic solution. But the fact alone that none of the main actors involved want war does not mean they can avoid it.

Ilan Goldenberg is the director of the Middle East Security Program at the Center for a New American Security. Previously, he served as chief of staff to the special envoy for Israeli-Palestinian negotiations, supporting Secretary of State John Kerry’s initiative to conduct peace negotiations between Israelis and Palestinians. Twitter: @ilangoldenberg

Elizabeth Rosenberg is a senior fellow and director of the Energy, Economics, and Security Program at the Center for a New American Security. From 2009 to 2013, she served as a senior advisor at the U.S. Department of the Treasury, helping senior officials develop, implement, and enforce financial and energy sanctions. Twitter: @Energy_Liz

Trending Now Sponsored Links by Taboola

By Taboola

More from Foreign Policy

By Taboola