Iran ‘calibrates’ its moves but does not know what to expect

Political pressure is tilting the Iranian leadership away from wait-and-see.
Sunday 12/05/2019
A file photo shows Iranian President Hassan Rouhani visiting the Bushehr nuclear power plant just outside of Bushehr, Iran. (Iranian Presidency Office via AP)
A file photo shows Iranian President Hassan Rouhani visiting the Bushehr nuclear power plant just outside of Bushehr, Iran. (Iranian Presidency Office via AP)

Iran has responded to the United States’ withdrawal from the 2015 world-power agreement limiting its nuclear activities.

On the first anniversary of US President Donald Trump abandoning the “worst deal in history,” Iranian President Hassan Rohani announced steps Iran will take towards resuming frozen aspects of the nuclear programme unless it receives international help against stringent US sanctions.

The details may matter or may be overtaken by events. Rohani said Iran would stop exporting enriched uranium and heavy water and, after 60 days, would resume enriching uranium beyond the 3.67% limit set by the 2015 agreement, the Joint Comprehensive Plan of Action (JCPOA).

On the former, US Secretary of State Mike Pompeo had six days earlier announced Washington might sanction any parties taking Iran’s enriched uranium, as Russia has done, or stored its heavy water, as Oman has done.

“I think it’s just a coincidence that the US threatened to sanction LEU [low-enriched uranium] exports and that Iran now says it will suspend them,” said Peter Jenkins, former British ambassador to the International Atomic Energy Agency. “Iran will soon find itself in possession of more than 300 kilograms of LEU and, therefore, in ‘non-performance’ of that JCPOA provision.”

Iran’s is a calibrated move. Rohani stressed a readiness to “negotiate, within the boundaries of JCPOA” and that he wanted Europe, Russia and China to save the deal.

Jenkins drew a parallel with Iran’s “exertion of diplomatic pressure” through a phased expansion of enrichment after 2005, ending a 2-year suspension in place during talks with Europe. Iran first resumed converting raw uranium into feeder gases, then reopened the Natanz research facility and did not enrich to 20% until 2010.

The Iranian nuclear programme was less developed then and Trump was not in the White House. This time, it could take two or three months for current stocks of 160 kilograms of LEU to reach the JCPOA limit of 300 kilograms, perhaps coinciding with the 60-day timescale.

“This could all be done in stages — first enriching to 5%, then to some higher level,” said Saeid Golkar, assistant professor of Political Science at the University of Tennessee, Chattanooga. “Iran has few choices, so [it] has taken a desperate move to try to warn [the Europeans and Russians] but mainly to satisfy the Iranian hardliners and their social base who feel humiliated.”

Political pressure is tilting the Iranian leadership away from wait-and-see. “Iran has been optimistic, waiting for 2020 and praying Trump will not again be president,” said Golkar. “To simply withdraw from the deal, they know, means all the sanctions would come back. At the same time, Iran is aware of worse-case scenarios, which means preparing for conflict while working to bypass sanctions.”

It may be a long time until the US election in November 2020 and start of a new presidential term in January 2021. Golkar expects evidence of “radicalisation” with Iran’s parliamentary elections in February 2020 alongside by-elections for the Experts’ Assembly, which chooses the supreme leader.

Few in Tehran or Washington doubt that the “hawks” around Trump, especially national security adviser John Bolton, want to overthrow Iran’s leadership. Mark Dubowitz, CEO of the Foundation for Defense of Democracies, argued in the Wall Street Journal that the CIA should finance workers’ strikes as sanctions prompt unemployment and labour unrest.

One Tehrani professional said he did not expect a popular uprising, even as sanctions bite. “People are quiet this time and are blaming Trump,” he said. “They feel he’s disrespectful, even racist.”

An International Monetary Fund projection of 6% contraction and 40% inflation in 2019 predates the United States ending sanctions waivers for Iran’s remaining oil customers. Tehran’s exports were already down to 1.3 million barrels per day (bpd) from 2.3 million bpd before Trump left the JCPOA and are now likely to head towards 700,000-800,000 bpd.

Iran’s average $67 billion annual oil revenue over the past decade could slump to $25 billion or less. As Tehran strives to increase non-oil exports, Washington may introduce further sanctions like those in early May over steel, aluminium and copper exports.

The government tripled welfare payments to 10 million poorer citizens but inflation hurts the salaried middle classes and retired people.

“It’s awful here, with rising prices hitting anyone on a fixed salary,” said the professional in Tehran. “Rohani has raised government workers’ wages by 20% and is cutting back on extra expenses. Luckily, the Central Bank chief has been able to control, relatively, the rise in the dollar but far scarier is the US Navy coming to the Persian Gulf.”

“Everybody is talking about war,” said Golkar. “A cousin in the countryside told me that all the farmers are speaking about this danger.”

Are such fears exaggerated? Perhaps, said Golkar, “but a false-flag operation can start a war. Nobody knows who will shoot against the Americans in Iraq or in other countries.”