Iran’s Nuclear Deescalation: Motives and Regional Implications

After a long period of tensions over its nuclear program, Iran recently moved to renew cooperation with the International Atomic Energy Agency (IAEA). This shift was probably aimed at averting further international pressure against Iran, and in particular the danger of an Israeli military strike against its nuclear infrastructure. With Tehran seemingly seeking to avoid escalation and restoration of the previous nuclear deal being unlikely, the US and its allies will likely also refrain from more aggressive moves and accept the status quo. Furthermore, this will facilitate the process of reconciliation between Iran and its Arab Gulf rivals, benefiting China’s interests in the region.

On 4 March 2023, IAEA chief Rafael Grossi, during a visit to Tehran, announced a new agreement with Iranian authorities regarding the country’s controversial nuclear program. According to the joint statement between Iran and the IAEA, the two sides agreed to increase inspections at the Fordow fuel enrichment facility, a critical part of Iran’s nuclear infrastructure, and reinstall monitoring equipment that Iran had removed in 2022.

This apparent breakthrough came after years of escalating nuclear tensions between Iran and the West. Since former US President Donald Trump withdrew from the 2015 Joint Comprehensive Plan of Action (JCPOA) agreement in 2018 and reimposed sanctions against Iran, Tehran had been gradually escalating its violations of the deal, enriching uranium above the agreed 3,67% limit and increasing its enriched uranium stockpiles. Although President Joe Biden’s administration joined European Union (EU)-mediated negotiations on rejoining the pact in 2021, they stalled in September 2022, while Iran further intensified its enrichment activity to 60% in November of that year. Last February, IAEA inspectors discovered uranium particles enriched up to 83,7%, near weapons-grade 90%. A quarterly meeting of the IAEA’s 35-member Board of Governors last month was expected to censure Iran for its advances and refusal to cooperate with the agency. Considering these developments, why did Iran decide to renew cooperation with the IAEA?

First, the timing was important. As a result of Grossi’s visit, the IAEA’s Board of Governors finally refrained from approving a resolution censuring Iran. A particularly important dispute concerned an IAEA investigation into the presence of uranium traces at three previously undeclared locations in Iran. During Grossi’s visit, Tehran also pledged to provide information on that issue, despite previously demanding the shutdown of the investigation. Iran thus managed to avoid another escalation of tensions and a potential referral to the United Nations (UN) Security Council that could have resulted in the reimposition of UN sanctions, lifted in 2016 as part of the JCPOA (separate from unilateral US sanctions imposed since 2018).

Second, another important factor probably was Iran’s concern about potential US or, in particular, Israeli military action. Israel considers Iran’s nuclear program to be a major threat and Israeli Prime Minister Benjamin Netanyahu has repeatedly threatened direct military strikes against Iran in order to prevent it from acquiring a nuclear weapon. According to recent reports, Israeli officials warned the US and European governments that such a strike against Iran could be triggered if Tehran enriches uranium above 60%. The US has also made clear that “every option is on the table” to prevent Iranian acquisition of nuclear weapons. Considering Israel’s existential fears over Iranian nuclear activities and Tel Aviv’s and Washington’s willingness to strike against Iran’s interests in Syria and elsewhere in the region, Iranian leaders most likely take these threats very seriously.

With the threat of military escalation looming, Iran’s rapprochement with the IAEA almost certainly averted this risk in the short term. It also provided some reassurance to the international community that Iran is not actively seeking to develop nuclear weapons, limiting support for any potential attacks by its enemies, particularly Israel. At the same time, “freezing” the status quo, at least temporarily, benefits Iran, as it provides important leverage. As of mid-February 2023, the country has reportedly amassed 87 kg enriched to 60%. This can be rapidly enriched to weapons-grade 90% and its quantity is enough for developing “several” nuclear weapons if Iran decides to do so, as Grossi had estimated last January. This enables Iran to threaten its Western adversaries with a ratcheting up of its nuclear program if they make further aggressive moves against it, while being far enough from weaponization to calm fears and discourage them from supporting an Israeli strike.

The US and its European allies, despite their dissatisfaction with Iran’s nuclear progress, are likely to accept this new reality. Despite early expectations, hopes for restoring the JCPOA have dimmed. Due to the much more advanced stage of the Iranian nuclear program compared to 2015, Iran’s military support for Russia’s invasion of Ukraine, its violent suppression of the anti-regime protests that erupted last September, and the new rounds of Western sanctions triggered by these policies, the US president is unlikely to risk political capital in order to rejoin the deal. At the same time, Washington is also unlikely to support military action against Iran, which would risk embroiling it in a new major conflict in the Middle East, divert attention and resources away from confronting Russia and China, and disrupt oil production and transportation in the Gulf, further destabilizing global energy markets. Although Iran’s uranium stockpile is significant, the US intelligence community estimates that Tehran would need one year to actually produce a functioning nuclear weapon with it. In a February interview, CIA chief William Burns said that the US does not believe that Iranian leaders have yet made a decision to do so.

Notably, recent reports indicated that the US has explored the idea of providing partial sanctions relief to Iran in exchange for Tehran halting its enrichment at 60%, although the Iranians have apparently rejected it so far. Still, these moves demonstrate that, with the restoration of the JCPOA being an unlikely prospect and its unwillingness to respond militarily, the US is willing to accept the reality of Iran being a nuclear-threshold state, as long as Tehran does not start actively pursuing nuclear weapons and allows IAEA inspections for verification purposes. Without Washington’s backing, Israel is unlikely to attempt a military strike against Iran on its own and will likely also adjust itself to the current situation, although it will almost certainly continue its policy of containing Iranian influence throughout the Middle East. After all, its aforementioned warnings show that Tel Aviv does not view Iran’s current uranium enrichment levels as an imminent threat, as long as Tehran doesn’t go beyond that.

Third, Iran’s moves to deescalate nuclear tensions are taking place within the context of its wider shift toward reconciling with its regional adversaries and its policy of building close ties to China. Last month, Iran agreed to reestablish diplomatic relations with Saudi Arabia, and it is also improving relations with other Arab Gulf rivals, such as the UAE. China, which mediated the agreement between Tehran and Riyadh, has a vital stake in stabilizing the Gulf region and ensuring the stable flow of energy supplies from the region. As Arab Gulf states also felt severely threatened by Iran’s advancing nuclear program, the latest Iran-IAEA deal assuages these concerns and facilitates their rapprochement with Tehran. This serves Chinese interests as well, since it makes it easier for Beijing to maintain close relations with both Iran and its Arab partners and solidify its influence in the Gulf.

In conclusion, the agreement between Iran and the IAEA will help calm concerns about Iran’s nuclear activities and reduces the risk of military conflict in the region. A lot of difficulties lay ahead, as the IAEA has said that the monitoring gap of the past two years makes verifying the peaceful nature of these activities more complicated. But it was clearly demonstrated that Tehran seeks to avoid escalation, at least for now. The US and European countries share this stance. The deal will also make it easier for Arab states to move ahead with their reconciliation drive with Iran, indicating an overall desire to better manage regional rivalries.