Iran Still Doesn’t Want an Escalation

By threatening to back away from the nuclear deal last week, Iran seemed to reverse its yearlong policy of strategic patience. So far, however, the country’s actions and announcements indicate that it will stay the course. But patience can easily run out.

On May 8, Tehran announced its decision to partially reduce its compliance with the terms of the 2015 nuclear deal (known as the Joint Comprehensive Plan of Action, or JCPOA). The move was a response—Iran’s first—to increasing U.S. pressure after the Trump administration decided to leave the agreement last year.

Until now, Iran had remained fully compliant with its obligations, as quarterly reports issued by the International Atomic Energy Agency confirm. It has also mainly refrained from escalating tensions in the region through its proxies or retaliating against U.S. provocations, such as Washington’s recent designation of Iran’s Islamic Revolutionary Guard Corps as a terrorist organization.

Tehran’s strategic patience was driven by the assumption that, although the status quo was less than ideal, the waiting game would serve Iran better than escalation. The country believed it could ride out the rest of U.S. President Donald Trump’s term in the hope that a new administration would reinstate the JCPOA or adopt a less aggressive posture. Holding back and staying in the agreement would also allow Iran to keep the moral high ground and international support.

But Iran’s calculations changed when, in late April, the United States revoked key sanctions waivers that had enabled Iran to continue selling some of its oil to China, India, Japan, South Korea, and Turkey despite the U.S. embargo. The loss of export revenue would further damage an already broken economy. And making things worse, on May 3, the United States also decided to tighten restrictions on Iran’s nuclear program, no longer allowing Tehran to store excess heavy water produced in Oman or swap enriched uranium for raw yellowcake with Russia.

With that, it became infinitely less appealing for Iran to stay in the deal. Iranian President Hassan Rouhani, who has invested tremendous political capital in the nuclear file since 2013, was left with nothing other than the moral high ground. Senior Iranian officials started to argue that Iran should not only withdraw from the JCPOA but also from the Nuclear Nonproliferation Treaty, of which Iran has been a signatory since 1968.

It is thus not surprising that Iran was finally pushed into action—or at least the appearance of it. After all, Iran has refrained from actually leaving the deal’s legal framework. Through a statement issued by the Supreme National Security Council (a key institution that brings together Iran’s main national security decision-makers), the country stressed that its steps are fully in line with Sections 26 and 36 of the JCPOA, based on which Iran is entitled to consider the U.S. withdrawal and reintroduction of nuclear-related sanctions as grounds to cease performing its commitments in whole or in part.

Meanwhile, the specific ways in which the country is going to roll back its cooperation—stockpiling surplus heavy water and low enriched uranium above the agreed limits without shipping them abroad—are very limited and entirely reversible. Based on preliminary assessments, Iran might even remain within the thresholds of the deal in the short run, further reducing the imminent nuclear threat posed.

Finally, although Tehran threatened to resume higher uranium enrichment and halt the Chinese-led effort to redesign its Arak heavy water nuclear reactor, it gave a 60-day window for finding a solution with the remaining signatories to the JCPOA. More specifically, Rouhani clarified that his ultimatum will be enforced only if the remaining signatories don’t make good on their promises to shield the country’s oil and banking sectors from U.S. sanctions.

By all appearances, then, Iran is still not interested in unraveling the JCPOA. It just wants to make clear that the status quo, in which the country endures maximum pressure without any tangible benefit in return, is no longer sustainable. Until the 60-day deadline, Iran is likely to test whether the waiting game is still worth playing and continue refraining from escalation.

Tensions in the region might still increase over the next few weeks, as demonstrated by Iran’s apparent “sabotage attack” of four commercial vessels off the coast of the United Arab Emirates, just outside the Strait of Hormuz. However, similar to what happened over the past year, escalation is unlikely to be a strategy proactively sought by Iran but rather the product of accidents or miscalculations.

Much of what happens after the July 7 deadline will depend on whether Tehran believes that incremental gains are still possible. And those depend on the ability of the remaining signatories to the JCPOA to offer concrete benefits, not just political ones, to Iran in exchange for continued constraint. It will not be easy, but Europe will need to make quick progress operationalizing INSTEX, the payment mechanism that France, Germany, and the United Kingdom developed to facilitate legitimate trade with Iran without incurring into U.S. sanctions. It will also have to find ways for Iran to sell its oil. Following Iran’s announcement, European capitals renewed their commitments to the preservation of the JCPOA and to get INSTEX up and running soon. It is less clear whether they’ll put any effort into addressing the oil sales issue.

It is harder to imagine a change of heart on the U.S. side, but at least some sections of the Iranian leadership are not without hope. Officials such as Foreign Minister Mohammad Javad Zarif have signaled their willingness to work with Trump. On April 24, just days after the oil waivers were revoked, Zarif offered to negotiate a prisoner exchange with the United States and stressed that the U.S. president, unlike others in his administration, seems keen to talk to Tehran. Trump himself recently opened up to the possibility of direct talks with Tehran to make “a fair deal.” Although he is unlikely to turn U.S. Iran policy on its head in less than two months, any signal that he’s willing to be constructive might induce Iran to stick with strategic patience a while longer.

Over the next few weeks, Iran will decide whether its existing strategy still serves its purpose or, instead, escalation in the region better matches its national security interests. With so much at stake, all the parties involved need to carefully assess the costs and potential consequences the latter path would have for Iran, the region, and, ultimately, the world.