With the prisoner swap carried out last week between the United States and Iran after the transfer of $6 billion in Iranian oil revenues, critics of the administration are again voicing their opposition to making deals with Iran’s current government. Alongside the acknowledged terms of the agreement for the prisoner swap and transfer of funds, it also has become clear in recent months that there is a broader effort to incentivize Iran to slow the pace of its uranium enrichment program and reduce tensions in the Middle East. This has aimed to build informal “understandings” with Iran through a combination of communicating U.S. “red lines” and the apparent relaxation of sanctions targeting Iran’s oil exports rather than negotiating a formal agreement, which would be subject to Congressional review under the Iran Nuclear Agreement Review Act (INARA). This approach will have little overt support among the Washington political class of either party. However, in the absence of better alternatives, it presents an opportunity for the Biden administration to both prevent an escalating crisis with Iran and offset Saudi moves to raise oil prices, either of which could undermine Biden’s bid for reelection in 2024.
The results of this effort on Iran’s nuclear trajectory thus far are modest but positive. The latest report by the International Atomic Energy Agency (IAEA), circulated in early September in advance of its Board of Governors meeting, showed that they had slowed down their production of 60 percent highly enriched uranium (HEU), just short of weapons-grade, and diluted some of that material to reduce their inventory accumulation. They also have slowed down what had previously been a breakneck pace of installing additional advanced enrichment centrifuges. These actions do not lengthen Iran’s “breakout time” if they choose to enrich weapons-grade uranium, but this pause is a de-escalatory step that, if continued, should prevent an acute crisis.
Iran also has apparently instructed its proxies in Iraq and Syria to cease attacks on U.S. military personnel deployed there, which had been frequent until last year. There have been no such incidents in Syria in over four months and none in Iraq in over a year. While Iran still opposes the U.S. presence in those countries and could decide to reverse this move, it removes for now another source of friction that could escalate into a crisis.
On the oil front, it has become increasingly apparent over the summer that the United States has shifted even further toward lax enforcement of the sanctions aimed at Iran’s oil exports, allowing volumes to rise as the broader market has tightened. TankerTrackers.com reported that export loadings of crude and condensate in August averaged 1.9 million barrels per day (BPD), up from 1.5 million BPD in May and a full-year average below 1 million BPD in 2022. While the State Department has officially denied that a policy shift has occurred, U.S. officials have acknowledged on background that they have pursued sanctions enforcement with a “lighter touch.” Critics of the Biden administration’s dealings with Iran have certainly noticed.
This comes as Saudi Arabia announced in June a 1 million BPD unilateral production cut beginning in July, in addition to the production curtailment as part of the OPEC+ framework, now extended at least through the end of the year. The move was a surprise, showing a very aggressive push to tighten the market and support prices. Crude is up more than 25 percent since the Saudi announcement, with Brent above ninety-four dollars, and OPEC’s own forecast shows a large supply deficit of 3.3 million BPD for 2023’s fourth quarter. While the Biden administration is pursuing a multifaceted deal to normalize relations between Saudi Arabia and Israel, which could improve U.S.-Saudi ties, there is no indication whatsoever that Saudi oil production policy is part of the current U.S.-Saudi discussions. With Wall Street commodities analysts again talking about the potential for $100/barrel oil and a U.S. presidential election approaching next year, it would be difficult for the Biden administration to take a harder enforcement line against Iran, to say the least.
Thus far, The Biden administration has kept mum on its indirect discussions with Iran and has not acknowledged any deal connecting the apparent Iranian forbearance on enrichment and proxy attacks with the evident U.S. forbearance on sanctions enforcement. This is probably intentional, as a formal agreement would trigger an INARA review by Congress, which would be highly contentious and inevitably partisan in an election year. It also reflects that what seems to have been agreed upon is very narrow compared to any plausible formal follow-up to the JCPOA.
Efforts by mediators, including Qatar and Oman, to build on this effort continue. Still, it is not likely that we will see any formal agreement before the November 2024 U.S. elections. Rumored efforts to engineer at least an indirect exchange between the United States and Iran during the UN General Assembly meetings in New York last week were apparently unsuccessful. Iranian foreign minister Hossein Amir-Abdollahian recently mentioned the possibility of taking up European-mediated talks with the United States again, picking up where they left off in September 2022, but this seems unlikely. The United States has clarified that the window for a return to the JCPOA has closed, and Iran’s demands for U.S. “guarantees” at the time seem even more far-fetched as President Joe Biden’s first term approaches its end. At present, trying to avoid disaster in the near term is the best available option. It is unsatisfying, but given the constraints under which they are operating, including the loss of U.S. credibility as a result of President Trump abandoning the JCPOA while Iran complied with it, the Biden administration deserves credit if they have indeed steered Iran away from a nuclear path which would have led quickly to crisis.
If President Biden wins re-election, there may be room for renewed discussion of a more permanent accommodation. A second-term Biden would arguably reduce Tehran’s concerns about Washington again abrogating an agreement. Still, it is unlikely that the Biden administration can induce Iran to roll back its nuclear program to anywhere near the constrained levels imposed by the JCPOA, let alone the extension of some of those provisions that the United States had hoped for—a “longer and stronger” deal. Unfortunately, Iran is now a threshold nuclear state, a status that cannot be reversed permanently, even in the event of military conflict. A reasonable agenda for a follow-up agreement in a second Biden term would center on restoring transparency and lengthening Iran’s breakout time to allow the world more certainty that Iran remains a threshold state and does not become a nuclear power.
Greg Priddy is a Senior Fellow for the Middle East at the Center for the National Interest.