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Chronicle of the Middle East and North Africa

Iran’s Nuclear Deal and Fragile Regional Balances

Iran’s Nuclear Deal
Iranian President Ebrahim Raisi speaks during a press conference in Tehran on August 29 2022. AFP

Ali Noureddine

This article has been translated from Arabic.

April 2021 saw the start of negotiations to revive the nuclear agreement between Iran and the P5 +1 – namely France, Britain, China, Russia, the United States and Germany.

While such a deal with Iran had already been concluded in July 2015 to gradually lift international sanctions imposed on the country for Tehran to curb its nuclear activities, then-U.S. President Donald Trump withdrew from this agreement in May 2018. His successor Joe Biden re-activated the nuclear agreement file soon after Trump’s departure from the White House In January 2021.

However, this attempt seeks to conclude an agreement that differs from the one Trump abandoned, launching a new path of negotiations that continues to this day. Since negotiations were re-launched, all parties concerned with the matter have been busy defining their own positions in regards to the restoration of the Iranian nuclear agreement based on their interests.

The major countries taking part in the talks are assessing the situation in terms of their strategic calculations, including the impact a potential deal would have on oil and gas markets as well as on international conflicts. Meanwhile, regional countries that are absent from the negotiating table are evaluating the situation according to the fragile regional balances.

Of particular concern is a potential agreement’s impact on Iran’s finances once sanctions are lifted, as well as on its military strength and ability to intervene in armed conflicts in Yemen and the countries of the Middle East.

Postures of parties involved in the negotiations

Rounds of negotiations on a new deal have taken place sporadically over the past year and a half, with all parties involved marking time as they seek to impose new conditions. Each party has its own calculations that have become determining factors in the setting of devising demands and negotiation ceilings.

On the one hand, European countries have an interest in rushing the agreement through in the hope of seeing Iran regain its role as a major exporter in the global gas markets in light of the scarcity of energy sources from which Europe has been suffering since the outbreak of the war in Ukraine.

It is worth noting that Iran’s massive gas reserves, the second largest in the world, would allow it to play a key role in meeting the needs of the European market once sanctions are lifted. President Biden’s administration also appears keen to arrive at an agreement, which would ease the pressures on the European markets resulting from the reduction of Russian gas imports, which the Russian president is using as leverage against the Europeans in the context of the war in Ukraine.

On the other hand, Iran is aware of Western parties’ need to revive the nuclear deal. And this is why it has repeatedly altered its conditions, and delayed the proceedings in the hope of achieving greater gains, even while expressing its commitment to reaching an understanding with the West.

In other words, while Iran has an interest in a new nuclear deal, it wants to play all its cards to maximum effect before a new agreement is reached. For these reasons, over the past few days Iran has demanded that new clauses be added to the agreement to ensure that the United States does not withdraw from the deal as it did before, and in some cases exceeding the scope of the joint action plan related to the nuclear file.

Russia, on the other hand, is presenting a positive demeanor in regards to the negotiations, and to date, has taken no steps that would prevent an understanding between Iran and its Western partners. Russia plays a key role in facilitating the implementation of some of the deal’s terms, such as dealing with Iran’s stockpile of enriched uranium, which exceeds the limits allowed in the agreement.

This means the entire agreement could fall apart without Moscow’s cooperation. Practically, Putin appears to be balancing his goal of depriving Europe of energy sources that the nuclear deal could afford, and the economic benefits from joint regional gas projects if sanctions on Iran are lifted.

Meanwhile, China seems the most enthusiastic about achieving a new agreement given its need for unrestricted access to Iran’s oil and gas reserves, in addition to its large investments in key Iranian industries such as mining.

China is also aware of the importance of Iran’s strategic location that can allow it to play a key role in the main shipping and commercial transportation routes, which automatically benefits Chinese industries. It’s worth mentioning that Chinese President Xi Jinping recently sought to increase bilateral trade with Iran to $600 billion by 2026 as part of the broad economic cooperation he is targeting.

The Israeli campaign against the nuclear deal

However, countries in the region appear to have different interests and concerns regarding a possible nuclear deal, which are reflected in their varying positions.

At the forefront of the parties that remain skeptical about a potential agreement is Israel, which has launched an organized diplomatic and media campaign to persuade Western parties to eschew the revival of the Iran nuclear deal.

Israel believes that lifting sanctions imposed on Iran will increase Tehran’s annual revenues through the sale of oil and gas by about $100 billion that will automatically flow into the Iranian state treasury, which finances Iran’s military operations in the region.

In other words, Israel expects that lifting the sanctions on Iran will help strengthen the Iranian-backed militias in Syria and Lebanon, including Hezbollah, financially and militarily, which would increase the risk these armed forces pose to Israeli interests.

Israel is clearly not concerned with Western countries’ priorities, i.e. preventing Iran from becoming a nuclear armed power. Instead, it is more interested in matters pertaining to its armed conflicts in Syria and Lebanon.

This was apparent in Israeli Prime Minister Yair Lapid’s lack of interest in the limitations the agreement would impose on Iran’s nuclear activity, and his focus during discussions about the financial returns that Iran would enjoy once sanctions are lifted.

In fact, Lapid considers that what Israel is doing today represents a “successful battle to curb the nuclear agreement and prevent the lifting of sanctions on Iran.” Furthermore, his comment that there are “encouraging signs” clearly indicates that he believes the entire agreement could be obstructed.

In any event, Israel has always maintained this stance in relation to any potential nuclear deal with Iran that would result in the removal of sanctions against it. In 2015, Israel strongly opposed the deal concluded by the Obama administration with Iran, considering it a disaster on all levels, while it lauded the Trump administration’s withdrawal from the agreement in 2018.

Gulf states and silent concerns

Surprisingly, despite vocal concerns from Saudi Arabia and the other Gulf governments criticizing the 2015 deal, Gulf States have been relatively mute throughout the most recent rounds of discussions with Iran. Saudi Arabia in particular realizes that reviving the Iran nuclear agreement will mean lifting sanctions on the Islamic Republic and strengthening its financial position. This in turn would allow Iran to increase its military support for militias that work against Riyadh’s interests in Yemen and Iraq.

It’s possible that Riyadh has refrained from interfering in the current negotiations, in contrast to its tense position in 2015, because it’s aware of its limited ability to influence the talks taking place today.

As a result, for the time being, Saudi Arabia, the UAE and Bahrain have chosen to bide their time and observe, rather than express sharp positions that could increase tensions with Iran, so long as their stances will not do much in the way of influencing the course of negotiations. In light of the outcome of the negotiations and the possibility that Iran’s influence in the area would grow if the nuclear accord is resurrected, Gulf States are currently in a position of cautious concern.

Qatar alone has adopted a fundamentally divergent approach by expressing support for attempts to resurrect the nuclear accord and making every effort to aid the progress of discussions through its stated clear views.

This stance reflects Doha’s desire to free Iran of Western trade restrictions, which would allow Qatar to invest in its relatively good relationship with the Iranian regime through profitable strategic projects. It should be noted that last June Qatar hosted part of the negotiations aimed at reviving the nuclear deal in an explicit initiative to bridge the rift between Iran and Western countries.

In any event, the nuclear talks are headed toward completion, and the remaining points of contention have finally been reduced to a set of issues expected to be tackled in the coming negotiations.

There is certainly no guarantee that the negotiators will succeed in translating all these talks into a final agreement soon, as this will depend on the amount of concessions each side is willing to make.

It is, however, evident that the talks held over the past year and a half helped narrow the disputed points. This achievement could potentially make it possible for lingering issues to be resolved within a short time if the parties participating in the talks make sufficient concessions.

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