Ever since the United States withdrew from the nuclear deal with Iran nearly a year ago, the Iranian leadership has oscillated in an effort to formulate a decent response to the American challenge – so far unsuccessfully. In principle, Tehran wants to keep the deal in place because it has lifted most of the sanctions imposed on the Islamic republic. Furthermore, once the deal expires in the next decade, Iran will be permitted to expand its nuclear program and approach nuclear breakout capability. The U.S. withdrawal shrouds these advantages in uncertainty.
Initially, Iran tried to keep the deal alive, at least with its European partners, in the hope that U.S President Donald Trump won't be elected to a second term in 2020. This effort was predicated on the willingness of European governments to take steps to bypass the U.S. sanctions, and even compensate Iran for the economic damages it has incurred as a result.
This response, however, was insufficient. The U.S. sanctions exceeded European efforts to help, and Iran's economic situation continued to deteriorate. Consequently, Iran in recent months has demanded that European governments extend the economic compensation packages they had promised, according to Tehran, in the wake of the U.S. sanctions. In addition, Iran has threatened that without this compensation it will expand its uranium enrichment activities to pre-nuclear deal levels.
Subsequently, on May 8, Iran announced that it would no longer abide by some of its obligations within the framework of the nuclear deal and that it will enrich higher-grade uranium within two months if the governments of Europe fail to fulfill their compensation promises. Tehran has argued that these measures do not violate the nuclear deal, but it's clear that if it does enrich higher-grade uranium, as per its pledge, no European government will support its position.
What's more, the signatories to the nuclear deal, including Russia, have already voiced their reservations over Iran's declared intentions. France has even said that if Iran fails to meet its obligations, it will impose new sanctions. As a consequence, Iran is staring at two unpleasant options: One is to uphold the nuclear deal while conceding its financial demands amid a dire economic situation; and the other is to continue applying pressure, which will ultimately kill the nuclear deal, reinvigorate the alliance between European governments and the U.S. and precipitate new sanctions, all while Iran will be held irresponsible.
In theory, there is another option: Renew talks with the West to improve the nuclear deal. On the surface, Washington and Tehran alike are outwardly displaying an interest in this option, but the underlying intentions are completely different. Trump wants the talks to address the problematic aspects of the deal, such as extending its so-called sunset clause and imposing stricter limitations on Iran's ballistic missile program. Apropos the missiles, the Trump administration and the European position are mostly convergent, as the Europeans fear that Iranian advancements also pose a threat to them as well. Obviously, Iran has outright rejected these stipulations. For its part, it is willing to re-engage in talks if the U.S. rejoins the nuclear deal, shelves the reimposed sanctions and apologizes for its actions. Suffice it to say, Trump is not currently considering any of these conditions.
The increased American pressure and the nuclear deal's possible collapse have raised the possibility of a clash between the Iranian and U.S. militaries. Two events from the past two weeks have exacerbated these tensions. The U.S. dispatched the USS Abraham Lincoln aircraft carrier to the Persian Gulf and B-52H bombers to Qatar – due to indications that Iran was planning attacks, according to the Trump administration. Meanwhile, four oil tankers docked in the United Arab Emirates, two belonging to Saudi Arabia, were targeted in "an act of sabotage."
It's safe to assume that both sides do not want a military conflict, which at this point is unlikely to materialize. The last thing Iran desires is a fight with a global superpower, where it is clearly outmatched. Trump, from his perspective, believes in applying heavy economic pressure, not military force. But when the sides lack open lines of communication and distrust one another, and when Iran is covering its tracks by using its Shiite militias to carry out attacks across the region – an uncontrollable escalation is within the realm of possibility.
