Iranian nuclear deal limbo may serve interests of both US and Iran

WASHINGTON/ DUBAI ( Reuters) – Whether or not Tehran and Washington accept a European Union “final” offer to revive the 2015 Iran nuclear deal, neither is likely to declare the pact dead because keeping it alive serves both sides’ interests, diplomats, analysts and officials said.

Their reasons are different. For US President Joe Biden’s administration, there are no obvious or easy ways to rein in Iran’s nuclear program other than the agreement, under which Iran had restrained its atomic program in return for relief from US, UN and EU economic sanctions.

Using economic pressure to coerce Iran to further limit its atomic program, as Biden’s predecessor former US president Donald Trump attempted after abandoning the deal in 2018, will be difficult when countries such as China and India continue to buy Iranian oil.

The rise in oil prices brought on by Russia’s invasion of Ukraine and Moscow’s public support for Tehran have thrown Iran economic and political lifelines that have helped to convince Iranian officials that they can afford to wait.

“Both sides are happy to endure the status quo,” said a European diplomat who spoke on condition of anonymity.

“We are in no rush,” said a senior Iranian official who spoke on condition of anonymity.

When Trump reneged on the deal he argued it was too generous to Iran.

After waiting about a year, Iran began violating the deal’s nuclear restrictions, amassing a larger stockpile of enriched uranium, enriching uranium to 60% purity – well above the pact’s 3.67% limit – and using increasingly sophisticated centrifuges.

After 16 months of fitful, indirect US- Iranian talks, with the EU shuttling between the parties, a senior EU official on August 8 said they had laid down a “final” offer and expected a response within “very, very few weeks.”

Regional diplomats said the EU told the parties it expected an answer on August 15, though that has not been confirmed. There are no signs if Iran intends to comply or to accept the draft EU text. The United States has said it is ready to quickly conclude a deal based on the EU proposals, is studying the text and will respond “as asked.”

“The Ukraine war, high oil prices, the rising tension between Washington and China, have changed the political equilibrium. Therefore, time is not of the essence for Iran,” said a second senior Iranian official.

After months of saying time was running out, US officials have changed tack, saying they will pursue a deal as long as it is in national security interests, a formulation with no deadline.

Biden, a Democrat, is sure to be criticized by Republicans if he revives the deal before the November 8 midterm elections in which his party could lose control of both houses of Congress.

“If the Iranians tomorrow came in and said, ‘ OK, we’ll take the deal that’s on the table,’ we would do it notwithstanding the midterms,” said Dennis Ross, a veteran US diplomat now at the Washington Institute for Near East Policy.

While Biden has said he would take military action as a last resort, Washington is loathe to do so given the risk of sparking a wider regional war or of Iran attacking the United States or its allies elsewhere.

Domestic criticism of the administration is likely to be fiercer after last week’s indictment of an Iranian man on US charges of plotting to kill former White House national security advisor John Bolton and the knife attack on novelist Salman Rushdie. The writer has lived under an Iranian fatwa, or religious edict, calling on Muslims to kill him for his novel The Satanic Verses, viewed by some as blasphemous.

The lack of better policy options for Washington, and Tehran’s view that time is on its side, could leave the deal dangling.