
1. Introduction
On 8 May 2018, President Donald Trump announced the US’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear agreement, and the reimposition of US secondary sanctions against Iran. The 2015 deal – endorsed by the then US president, Barack Obama, alongside Iran, China, Russia, Germany, France and the UK – had come to fruition after a decade of international tensions and escalation over Iran’s nuclear capabilities, during which Iran had undertaken to reduce its nuclear ‘breakout time’1 from one year to three months. In reaction, six UN Security Council (UNSC) resolutions had been passed condemning Iran’s activities, and multilateral sanctions cutting off Iran’s energy exports and its access to the international banking system had been imposed.
The 154-page JCPOA, painstakingly negotiated over a 20-month period, was the culmination of repeated deliberations between 2012 and 2015 – including an interim agreement in 2013 involving constraints on Iran’s nuclear programme in exchange for nuclear sanctions relief and increasing ‘steps on access in areas of trade, technology, finance and energy’ in the Iranian economy.2
Despite 14 International Atomic Energy Agency (IAEA) verifications certifying that Iran was meeting its obligations, Trump’s withdrawal from the deal was seen by many to be preordained. During the 2016 US presidential campaign, he had given early indication that the issue of Iran would become a political target. Specifically, he had criticized the deal for not imposing more stringent constraints on Iran’s nuclear programme; for the limited timeline of the agreement; for providing significant sanctions relief which, critics say, Iran has exploited to sponsor regional groups beyond its borders; and for neglecting to address Iran’s ballistic missile programme. Upon his election, Trump reiterated similar criticism, refusing in October 2017 to certify Iranian compliance with the JCPOA. European JCPOA signatories, collectively known as the E3 (France, Germany and the UK), and the US Congress were called upon to fix the deal. These diplomatic efforts, however, failed to address Trump’s concerns, resulting in the May 2018 withdrawal announcement.
The Trump administration’s policy is predicated on the belief that sustained economic pressure and sanctions could force Iran to renegotiate the JCPOA, accept concessions on critical issues not included in the deal (such as Iran’s missile programme and regional activities beyond its borders), and limit Tehran’s support for regional proxy groups. Although there have been a number of inconsistencies between the president’s statements and actions, on 21 May 2018 US Secretary of State Mike Pompeo defined the new American agenda on Iran as one imposing ‘unprecedented financial pressure on the Iranian regime … to deter Iranian aggression’, while advocating ‘tirelessly for the Iranian people’. Pompeo listed 12 demands, including: an end to uranium enrichment; increased inspection access to military sites; a halt on missile proliferation and the launching of ballistic missiles; the release of dual nationals under detention; the termination of Iranian support for Hezbollah, Hamas, the Houthi rebels in Yemen and Shiite militias in Iraq; and the withdrawal of Iran’s military forces from Syria. Should Iran significantly adjust its policies, Pompeo offered ‘to end the principal components of every one of our sanctions against the regime …, re-establish full diplomatic and commercial relationships with Iran and support the modernization and reintegration of the Iranian economy into the international economic system’.3
Box 1: Mike Pompeo’s 12 demands on Iran4
- Declare to the International Atomic Energy Agency (IAEA) a full account of the prior military dimensions of its nuclear programme, and permanently and verifiably abandon such work in perpetuity.
- Stop enrichment and never pursue plutonium reprocessing, including closing its heavy-water reactor.
- Provide the IAEA with unqualified access to all sites throughout the entire country.
- End proliferation of ballistic missiles and halt further launching or development of nuclear-capable missile systems.
- Release all US citizens as well as citizens of US partners and allies.
- End support to Middle East ‘terrorist’ groups, including Hezbollah, Hamas and Palestinian Islamic Jihad.
- Respect the sovereignty of the Iraqi government and permit the disarming, demobilization and reintegration of Shia militias.
- End military support for the Houthi rebels and work towards a peaceful political settlement in Yemen.
- Withdraw all forces under Iran’s command throughout the entirety of Syria.
- End support for the Taliban and other ‘terrorists’ in Afghanistan and the region, and cease harbouring senior Al-Qaeda leaders.
- End the Islamic Revolutionary Guard Corps-linked Quds Force’s support for ‘terrorists’ and ‘militant’ partners around the world.
- End threatening behaviour against neighbouring states, many of which are US allies, including threats to destroy Israel, the firing of missiles at Saudi Arabia and the United Arab Emirates (UAE), and threats to international shipping and destructive cyberattacks.
The remaining JCPOA signatories have criticized US unilateralism, considering the demands a violation of the nuclear deal. They have vowed to protect the deal and guarantee Iran’s economic benefits. In effect, US policy has created a rift between Washington and Europe, wherein EU states – and specifically the E3 – have made the protection and preservation of the JCPOA a question of principle, policy independence and economic sovereignty, as well as a security and non-proliferation priority. Europe sees Trump’s withdrawal from the JCPOA as having instigated an unnecessary crisis on Europe’s borders. European leaders have grown increasingly frustrated with Washington, as the burden has fallen to Europe to incentivize continued Iranian compliance through a long-awaited trade and investment package and the creation of a special-purpose vehicle (known as INSTEX)5 to facilitate transactions. At the same time, the challenge of addressing outstanding concerns with Iran has been subordinated to the current efforts to save the JCPOA, stave off a potential wider nuclear crisis, and control tensions in the Persian Gulf.6
In the year or so since the US withdrawal from the deal, Iran’s response has been varied, ranging from defiant rhetoric accusing the US of violating its obligations to repeated pressuring of Europe to provide economic incentives (as stipulated in the JCPOA in return for continued nuclear compliance). With the imposition of sanctions, most international companies have withdrawn from the Iranian market. Iran has been cut off from the international banking system, and on 2 May 2019 the US government revoked oil sanctions waivers that had permitted the limited sale of Iranian oil to a number of countries, including China, India and Turkey. Iran’s oil sales have plummeted from 2.6 million barrels a day (b/d) in May 2018 to 350,000 b/d in June 2019. Under the strain of sanctions, Iran’s economy has contracted by 6 per cent.7 The currency has lost over 50 per cent of its value and inflation has increased, nearing 50 per cent.
Tensions between Washington and Tehran appear to be increasing the likelihood of Iranian withdrawal from the JCPOA, the imposition of ‘snapback’ sanctions by the UN against Iran or even military confrontation.
In May 2019, on the one-year anniversary of Trump’s withdrawal, Iran, frustrated by the limited solutions and lack of progress or economic benefits, switched tactics. It adopted a confrontational strategy: recommencing slightly higher levels of uranium enrichment, among other actions, and thus incrementally breaching some of its nuclear commitments. As part of this strategic shift, Tehran is believed to have been responsible for attacks on tankers in the Persian Gulf and the downing of a US drone. It has also been supportive of missile and rocket attacks sponsored by Houthi and Iraqi militias, and missile and drone attacks on the Abqaiq and Khurais oil-processing facilities in Saudi Arabia.
Through this period of tensions, President Trump has extended a number of offers of negotiation with Tehran while simultaneously imposing further sanctions, including on Iran’s supreme leader, Ali Khamenei, and its foreign minister, Mohammad Javad Zarif.8 The sanctions and heated rhetoric have yet to yield progress towards Trump’s stated endgame on Iran. In fact, tensions between Washington and Tehran appear to be increasing the likelihood of Iranian withdrawal from the JCPOA, the imposition of ‘snapback’ sanctions by the UN against Iran or even military confrontation. Since August 2019, as part of the first steps towards a new deal, French President Emmanuel Macron has been trying to broker a deal between Tehran and Washington that would provide Tehran with a $15 billion credit line and sanctions relief in exchange for a return to compliance with the JCPOA.
About this paper
This paper reviews Trump’s Iran strategy in the context of recent developments. It explores permutations for possible pathways to a new nuclear agreement with the Islamic Republic, and has been drafted on the assumption that the US president does indeed seek to negotiate such a deal.
The paper draws on off-the-record interviews with 75 policymakers, experts and analysts in 10 countries (the US, Iran, France, Germany, the UK, Russia, China, Saudi Arabia, the UAE and Israel) conducted over a six-month period from December 2018 to June 2019.9
The interviews followed a standardized set of questions, with respondents asked to answer questions on the effectiveness of Trump’s Iran strategy, the possibility of a grand bargain, the feasibility of alternative agreements and the viability of future negotiations with Iran. Interviewees provided their opinions on plausible outcomes and options in relation to three specific issues – nuclear proliferation, regional dynamics and ballistic missiles – and also speculated on the varying objectives of each country. In the chapters below, we present these findings and lay out a roadmap for the likely outcomes of any future negotiations.