Uncompromising rhetoric from Washington and Tehran might disguise a readiness to restart talks soon, writes Nader Itayim
The Trump administration's announcement this month of the formal return to "maximum pressure" against Iran has evoked a strong reaction from Tehran, with Iran's top decision maker seemingly ruling out the possibility of talks with the US. But while prospects for de-escalation might seem bleak, economic and political realities on the ground may present an opportunity too big to ignore.
In the weeks and months since Donald Trump's election win, the messaging out of Tehran had been as clear as one could hope — Iran needs sanctions relief, and is willing to engage in negotiations, not just with the Europeans, but also the incoming US administration, to make that happen. The initial signs out of Washington, too, were positive, with Trump saying on more than one occasion that he wanted a deal with Iran. Iranian officials, including foreign minister Abbas Araghchi, acknowledged Trump's overtures, saying that while it would be difficult, an agreement with the US was "achievable".
But the situation took a turn for the worse last week after Trump ordered his administration to crank up sanctions against Tehran as part of a return to the more hawkish approach he adopted during his first term. His administration followed that up just days later with a new round of sanctions on several crude tankers and shipping firms linked to Iran's oil trade.
Unsurprisingly, the mood quickly soured in Tehran, prompting Iran's supreme leader, Ayatollah Ali Khamenei, to all but rule out negotiations with the Trump administration. "Negotiating with a government like [that] is not wise, intelligent or honourable," he said. A government spokesperson swiftly echoed the supreme leader's position: "You cannot issue a maximum-pressure directive with a smile and then say, ‘I want to negotiate with you'."
As Iran's ultimate decision maker, Khamenei's word is tantamount to law, which, on the surface, does not bode well for the prospect of a restart of talks. But despite the escalating rhetoric from both sides, Iran watchers still discern a realistic and viable pathway to a diplomatic solution in the not-too-distant future. Iran and the US are "engaged in a push-and-pull dynamic, where one party appears eager to negotiate and resolve the dispute through political and diplomatic means, while the other either retreats or raises its demands", says Arman Mahmoudian, a research fellow at the Global and National Security Institute. "I expect these roles to alternate between Iran and the US."
Something has to give
But this phase is only temporary, Mahmoudian argues, as the status quo — where Iran maintains its current level of uranium enrichment, while the US limits its pressure to sanctions and verbal statements — is not sustainable.
Rafael Grossi, the director-general of UN nuclear watchdog the IAEA, said in November that Iran is not only producing 60pc-enriched uranium, which is much closer to the weapons-grade 90pc than in the past, it is doing so at a much faster rate, "which means they will have the amounts necessary, if they so choose, to have a nuclear device in a much faster way".
The two sides will soon "reach a crossroads, where they must choose between pursuing a political and diplomatic resolution, or seeking their desired outcomes through conflict and escalation", Mahmoudian says. Although it is impossible to say which path the sides will take, the realities on the ground in the US, and especially in Iran, suggest that the path of diplomacy is still the more likely.
"Despite what Khamenei has said, there are conditions under which Iran would feel compelled to negotiate," argues Farzan Sabet, a managing researcher at the Geneva Graduate Institute. The country is probably "at its weakest or most vulnerable" since the latter stages of the Iran-Iraq war in the 1980s, Sabet says. This is "in part because of the destruction or weakening of its ‘Axis of Resistance' network in the Levant, the demonstrated limited effectiveness of its medium-range ballistic missile capacity to strike Israel, and its degraded air defences, [but also] the woes of its domestic economy".
While Iran has overseen a partial recovery — despite the US sanctions — in its oil exports, the impact has largely failed to trickle down into its economy. The rial plunged to a record low this week in response to Trump's call for "maximum pressure", while inflation and unemployment rates remain high. "The extent to which the Iranian economy deteriorates in the coming months" will no doubt factor into the supreme leader's calculus, Sabet says.
Nuclear first
On the other hand, in Trump Tehran has a counterpart that favours low-cost, high-reward strategies. This could benefit Iran's leadership, whose foremost goal now is to secure some economic relief in the form of a lifting or an easing of sanctions. "Trump's approach to conflict resolution typically involves minimising costs while maximising gains," Mahmoudian says, adding that this "often materialises through negotiations, even if those negotiations are contentious".
Tehran has a deep mistrust of Washington — and in particular of Trump, who took the decision to pull the US out of 2015's Joint Comprehensive Plan of Action (JCPOA) nuclear deal and reimpose sanctions. But Trump's seemingly more measured stance on Iran this time around could improve the chances for alignment. In 2018, Trump called the JCPOA "the worst deal ever" because it only focused on Iran's nuclear ambitions while ignoring other areas of contention, such as its missile programme and support for regional proxies. But this time, he has singled out Iran's potential possession of a nuclear weapon as his only red line.
At this stage, "I expect any agreement between Iran and the US to be primarily centred around nuclear issues", Mahmoudian says. "It may address aspects of Iran's ballistic and aerospace activities, but only in relation to its nuclear programme", for example missile capabilities linked to the development of nuclear warheads. Broader discussions could come into play if and when an agreement is reached on the nuclear issue, he says.
Sabet concurs, saying Tehran's preference "would probably be something similar to the JCPOA", under which it was given some sanctions relief in exchange for partially dialling back its nuclear activities. But he concedes that Iran "might be forced to include other areas, which it is very reluctant to do".
With Trump only just taking office, one might be forgiven for thinking there is still plenty of time for the two sides to decide their next steps. But the looming expiry in October of the JCPOA's snapback mechanism — which would return all the wider international sanctions that were lifted on Iran in the JCPOA — means there should be more urgency for both sides. "The European powers can signal to Iran that if it is unwilling to curb its nuclear programme, they may trigger the snapback sanctions, which would have a significant psychological impact on Iran's already fragile economy," Mahmoudian says.
Iran has previously warned that triggering the snapback could result in its withdrawal from the Non-Proliferation Treaty aimed at preventing the spread of nuclear weapons. Araghchi last month acknowledged that there is a "hot debate" in Tehran around this issue. Sabet says this risk of snapback should "create incentives" for the Iranian leadership to at least try to reach an interim deal by October. The opportunity for such an outcome is there. The question now is whether there is the will on both sides to make it happen.
