The Prospect of a New Agreement with Iran Is Fading

The Prospect of a New Agreement with Iran Is Fading

The saga of the Joint Comprehensive Plan of Action (JCPOA) continues.  Since former President Donald Trump's decision to leave the agreement in 2018 numerous rounds of negotiations have taken place with minimal progress in finalising an agreement. In the summer of 2022, the European Union (EU) proposed a "final text" to restore the agreement. Both the United States and Iran were given the opportunity to put forward specific responses regarding the content.  

At the end of August, the EU was confident common ground would be found, arguing that an agreement was only a matter of "days" away. The EU’s confidence was largely due to Iran’s apparent disposition to give up certain demands that were regarded as problematic in terms of international diplomacy. "It's clear that there is a common ground, that we have an agreement that takes into account, I think, everyone's concerns," Josep Borrell, High Representative of the Union for Foreign Affairs and Security Policy, said in Prague where the EU's foreign ministers held an informal meeting. 

Nevertheless, on 1 September, several reports indicated that European enthusiasm was met with a most disappointing Iranian response, with the United States calling Tehran's position a "not at all encouraging" step "backwards," a view widely supported by the Europeans who judged it unsatisfactory.

Furthermore, Iran appears to continue sending contradictory signals. Although Tehran has emphasised its desire to renegotiate the deal with safeguards, the regime continues to pursue its nuclear programme. According to an IAEA report, Tehran is expanding the use of IR-6 centrifuges at its Natanz site. However, according to the JCPOA, only the less advanced IR-1 centrifuges are authorised in the context of Iran’s programme. These new elements are being analysed by the Board of Governors of the IAEA. 

Since it imposed an embargo on Russian oil, the EU has been seeking to diversify its energy sources. However, as winter approaches, solid alternatives to Russian energy supplies do not appear to have been found and the bloc is facing an unprecedented energy crisis that raises fears of a severe economic downturn. Recent declarations by OPEC+ regarding a possible production cut by 100,000 barrels per day have brought about additional concerns over possible energy shortages worldwide.

In such a geostrategic context, an agreement with Iran, a major gas producer, would be welcomed as a relief on global energy markets.  A revival of the JCPOA would go hand in hand with the lifting of international sanctions imposed on Tehran for several years, thereby allowing the country to regain its position as a major exporter of fossil fuels. Iran’s return to global energy markets would likely cause a significant drop in energy prices, a prospect that would be welcomed by countries grappling with inflation and shortages.

However, based on the latest development, in particular, Iran’s unwillingness to engage with relevant multilateral institutions and its capricious approach to negotiations, the prospect of a revised agreement before the end of the year is unlikely. 

Other Bussola work that may interest you: