Iran nuclear deal implications
Though I do not believe a renewed JCPOA is likely, I consider the possibility of the deal’s revival and discuss the implications of that, as well as three outlier scenarios.
Key points:
If the Biden administration is desperate enough for a deal, it may well offer enough concessions to revive the JCPOA, in the hope of relieving pressure on energy prices and focusing attention away from the Middle East.
In that event, Iran will have greater resources to support its regional proxies and allies in Iraq, Syria, Lebanon and Yemen. This will effectively force the administration to focus on the Middle East again.
With new financing from a nuclear agreement, Iran would likely acquire new weapons systems, focusing on improving its air defence capabilities but also on building on its existing strengths in ballistic missiles, cruise missiles, drones, and anti-ship missiles.
The US would find that its relations with Gulf states generally and with Saudi Arabia especially will worsen, as Saudi Arabia will want to improve ties with Iran against Israeli and US wishes.
The US is unlikely to succeed in integrating Gulf Arab air defence and early warning systems with those of Israel.
Any agreement would likely only last until the next Republican administration, or until the US Congress sabotages it. Iran is aware of this and would want to retain the option of restarting its nuclear programme from a higher base than that provided by the JCPOA.
An outlier (low likelihood but high impact) scenario is for Saudi Arabia and Turkey to come together to contain Iran. This would pave the way for an increase in jihadi activity throughout the region, from Lebanon to Afghanistan.
A second outlier scenario is for relations to break down between the US and Saudi Arabia, as Saudi cuts oil production to keep up prices, resulting in the US imposing sanctions on Saudi Arabia or acting against OPEC.
The least likely but most impactful scenario is for Israel to launch a strike against Iran, risking a regional war in which Gulf Arab energy infrastructure would get hit, and in which Iranian proxies and allies throughout the region would launch attacks against Israel.
I had argued and still believe that the renewal of the Joint Comprehensive Plan of Action (JPOA or nuclear deal) between the US and Iran is unlikely. That said, given the importance of the issue, it is worth considering the possibility of a deal materialising. A deal could happen if the Biden administration made large enough concessions to Iran, including guarantees that it would not implement various existing Congressional sanctions, and if the administration also believed that it can overcome opposition from Congress. Under these conditions, Iran may well agree to limit its nuclear programme, though probably not to return fully to the status quo between 2016 and 2019, that is, the time between when the deal came into effect and when Iran began responding to the US’ withdrawal from it. Iran would want to retain control over enriched uranium, keep new cascades of IR-6 centrifuges available, though not operational, and seek other concessions of that nature that would permit Iran to resume nuclear activities at a faster rate when the deal again breaks down.
Deal Implications
An agreement would be temporary at best: Even if President Joe Biden wins a second term, it is almost certain that the US Congress would attempt to obstruct a deal as soon as it is able to – which would be whenever Republicans can bring to their side some Democrats to sabotage the deal. Congress may not be able overturn the deal legally, but it can impose new Congressional sanctions and hound the administration until it enforces them, voiding the deal from Iran’s perspective. Given that the duration of the original JCPOA extends until 2041 in some provisions, Iran is extremely unlikely to assume that a deal will run its full term. Rather, Iran is seeking some temporary concessions, and is at most willing to make temporary concessions.
Even after a new deal, Iran will remain able to push forward with its nuclear programme when the deal collapses: Iran has jumped from using IR-1 and IR-2 centrifuges to far more advanced IR-6 centrifuges. It will want to safeguard this knowledge and build on it, accelerating the development of better centrifuges. It will also want to keep within Iran as much enriched uranium as possible, albeit under IAEA supervision, with the objective of using this as an additional bargaining chip when the agreement breaks down again. Indeed, Iran may well use additional funds obtained through an agreement to purchase any missing nuclear technical knowledge that Iran needs to be one step away from building a nuclear weapon. Concessions that Iran makes will likely be easily reversible, as it can see how reversible any US concessions are.
Iran would improve its armaments and intensify support to proxies to pursue its regional objectives: After a deal, Iran would be considerably better off financially, allowing it to boost its support for the Ansar Allah (Houthi) Movement in Yemen, Hizbullah in Lebanon, militias deployed to Syria, and assorted loyalist Iraqi factions in the Popular Mobilisation Units. This would strengthen Iran’s position across the region, allowing it to expand its ability to target Gulf Arab states as well as Israel. Iran would also be better able to finance weapons acquisitions from China and Russia, which it will almost certainly attempt to reverse engineer and eventually manufacture domestically. Iran’s priority would be to complement its existing strengths, including ballistic missiles, cruise missiles, UAVs, anti-ship missiles, guidance kits and the like. Iran likely has an interest in modernising its air force, but not at the expense of focusing too much on its air force and ignoring its existing core strengths. Iran will also want to improve its air defence systems as much as it can and as quickly as it can, and to share air defence capabilities with regional allies. By doing these things, Iran would in effect force the US to re-engage with the Middle East, negating the argument that an agreement would help the US focus its attention on great power competition.
A deal would increase conflict between the US and its regional allies: even under President Trump, the UAE had begun efforts to coordinate with Iran and cooperate with it to avoid further Iranian-backed attacks against its shipping and energy. A JCPOA renewal would encourage this tendency across the Gulf. The US will push in the opposite direction, trying to get Gulf Arab states to escalate against Iran and to refuse to normalise ties with it. In Iraq especially, the US will push for a stronger position by Gulf states in support of the Barzani clan, the Sunnis, and Shia factions opposed to Iran. If Gulf states back such a policy, Iran would retaliate through its proxies and allies, attacking Gulf states’ energy and shipping infrastructure, thereby demonstrating the US’ inability to guarantee security. It’s worth noting that we already see Saudi Arabia coordinating more closely with Russia and with China, despite US pressure. The threat of further Houthi attacks against Saudi energy infrastructure is likely to push Saudi Arabia to resist any US pressure to escalate against in Yemen, but greater Iranian support for Ansar Allah will push in the opposite direction. This will again bring to the fore the inability of the US to safeguard core Saudi national security interests. Diplomatic difficulties between the US and Saudi Arabia are especially likely to intensify if Saudi Arabia and Russia coordinate oil production cuts to maintain oil prices in the face of increased Iranian supply. The most the US can get out of its Gulf Arab partners is participation in an early warning system alongside Israel. Even that, however, appears farfetched, as this would increase the insecurity of Gulf states while boosting the security of Israel.
Israel would double down on its efforts to sabotage the Iranian nuclear programme: the cold war between Iran and Israel will intensify. Israel will continue with attempts at killing Iranian nuclear scientists, sabotaging Iranian manufacturing and nuclear facilities and supporting Iran’s regional foes. Israel will make much noise about using a military option, but it is likely deterred by the consequences of that.
The US would be even less able to compromise with Russia over Ukraine: The Biden administration may be able to sell its opponents the claim that a deal is necessary given high oil prices. With the Biden administration perceived as failing in Afghanistan and now against Iran, there will be less domestic room for it to make any concessions on the question of Russia-Ukraine. The Biden administration would have to appear tough against Russia.
Outlier scenarios:
I want to examine three low likelihood, high impact possible implications of a new US – Iran nuclear agreement:
Turkish – Saudi cooperation against Iran: Of the three scenarios I discuss here, I believe this one to be the most likely. Strengthening Iran may well push Saudi Arabia and Turkey closer together. I had expected this to occur in a previous piece, here, but I note that the personal antipathy between Erdogan and MBS appears more of an obstacle than I had thought, as there appears to be a strong legacy of mistrust between the two sides. Should the two sides come closer, this would destabilise Iraq significantly and result in Iranian retaliation against both sides, including through attacks on Turkish infrastructure connected to Iraq and on Saudi energy infrastructure. It would also pave the way for an increase in Sunni jihadi activity in Syria, Iraq and Lebanon, intended to counter Iran. This would extend to Afghanistan, as the two sides seek to place pressure on Iran in multiple directions.
Breakdown in US – Saudi ties: The US Saudi relationship is frayed. If Saudi Arabia and Russia coordinate oil production cuts to keep up energy prices after Iranian oil formally returns to the market, this may well revive US Congressional efforts to pass NOPEC. Alternatively, this may lead the US to impose sanctions on Saudi Arabia to pressure it to increase oil output. Such a policy would almost certainly backfire and push Saudi Arabia closer to China and other Asian customers.
Israeli military strike against Iran: Iran would view such a strike as US – orchestrated. Even if it were true, Iran would not accept that the US was blameless. It would therefore retaliate against US regional allies, including Gulf Arab energy infrastructure, and it would activate its regional allies in Lebanon, Iraq, Syria and Yemen against Israel and Israeli shipping. Anything more than a quick, rapid strike may well lead to a regional war. Furthermore, the price Israel would have to pay from a war with the entire Resistance Axis would be severe, with extensive damage to the home front, even if Israel can deal even greater damage to its enemies.