Iran and the Future of JCPOA: Amid Hope and Fear

09.07.2018

In the current situation, it seems that Europeans have understood that although the new US sanctions are aimed mainly at Iran, their impact would go well beyond the Iranian territories, putting at risk their own economic and security interests. 

US President Donald Trump’s decision on May 8 to pull his country out of the 2015 nuclear deal with Iran, officially known as the Joint Comprehensive Plan of Action (JCPOA), faced the other parties of the deal with the hard task of finding a way for saving this landmark diplomatic achievement from total collapse. However, maybe the most important part of the issue is not the US withdrawal from the deal per se, but its attempts to increase the economic pressures on Iran by re-imposing the sanctions and warning the other countries not to pursue economic interactions with the Islamic Republic, especially in the energy sphere. 

As a result, the US move has complicated the situation not only for the five remaining members of the P5+1 group, but also for a wide range of countries around the world which have any economic interactions with Iran. As far as the E3 (Germany, Britain and France), Russia and China are concerned, the current dilemma has two main aspects: first, how to preserve their own economic interests which are to be affected by the new wave of American sanctions; and second, how to prevent possible instabilities that might come as a result of the total failure of the nuclear deal. 

However, the US approach in response to the declared concerns of its European allies – as well as the Asians such as Japan and India – has so far been vague and unclear; the same as the actual measures Washington is about to adopt to implement the energy sanctions. On the one hand, the US officials have declared that their main aim is to totally stop Iran’s oil exports by November this year. On the other hand, there have been some signals from Washington recently that the US is ready to discuss possible sanction review for the allies on a case by case basis, conditioned on “considerable reduction” of their oil imports from Iran. 

Nonetheless, this change of tone seems to be a sign of indecision regarding the details of the US sanction plans for Iran, rather than a real policy change aimed at specific diplomatic results. First of all, the definition of “considerable” is not something measurable so that Iran’s oil customers could feel assured that they are safe in the face of the American sanctions. Second, at least as far as Iran’s ties with the European countries are concerned, a great part of European interactions with Iran has been done by the EU private sector, which, even in case of an agreement between the US and the European governments, would be cautious not to put itself in “unnecessary problems” by continuing cooperation with Iran. Add to these problems Saudi Arabia’s efforts to introduce itself as an alternative and to assure Iran’s partners that they could easily count on Riyadh to compensate for their lost benefits caused by the sanctions. 

Meanwhile, none of this means that there is no reason to be hopeful for the future of JCPOA. On the one hand, the US plans for targeting Iran’s oil exports have already started to affect the United States domestically, as it has caused an increase in the price of petroleum products. Trump and his entourage are well aware that the actual stop of Iran’s oil exports would lead to a huge increase in global oil prices, thereby to a further price increase inside the US. Such a scenario would seriously undermine the Republican Party’s support on the verge of the new Congress elections. On the other hand, abandoning the JCPOA is just one piece of the puzzle of the new American unilateralism, which has also been reflected in waging a “trade war” with the EU, Canada and China. As a result and in a wider framework, trying to contain this unilateralist foreign policy could further convince the other parties of the deal to devise concrete measures for guaranteeing its survival. 

In the current situation, it seems that Europeans have understood that although the new US sanctions are aimed mainly at Iran, their impact would go well beyond the Iranian territories, putting at risk their own economic and security interests. As for Iran, although the sanctions are measured to have serious impact on Iran’s energy, infrastructure and trade sectors, in the political sphere it has led to an unexpected alignment between the moderate and conservative camps, as both consider the country to be at the heart of an “economic war” which needs a unified approach to be dealt with. As a result, any possible reaction by Iran to the possible collapse of the deal would have the joint support of both camps and this is something that should be taken seriously by the Europeans.


Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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