The crisis involving Iran, Russia and the West over nuclear and oil-related matters has worsened in recent days.
Nuclear weapons have overtaken economic recovery on the Iranian regime's list of priorities, despite its need to contain popular unrest, and it has moved to obstruct progress at the talks seeking to revive the 2015 nuclear pact, known as the Joint Comprehensive Plan of Action. It has become impossible to conclude any deal before the US mid-term election in November. Israel’s general election, also in the same month, has become an additional factor influencing the tug of war between Tehran and the western countries involved in the negotiations.
As the Ukraine war rages on, Russia is preparing retaliatory measures against what it considers to be western provocations. It has issued a new round of ultimatums, hoping to undermine European solidarity, and has threatened to immediately halt oil and gas supplies to the continent, in response to a western proposal to impose a price cap on Russian energy exports.
Peace in Ukraine seems off the table for now, especially after Russian President Vladimir Putin’s fiery speech at a recent conference in Vladivostok. New developments are also tempering Moscow’s enthusiasm for a possible nuclear and oil deal between the West and Iran.
Mr Putin is expected to meet Iranian President Ebrahim Raisi at the Shanghai Co-operation Organisation summit beginning on Thursday in the Uzbek city of Samarkand, where they could strike a mutually beneficial deal. Tehran wants to join the SCO primarily for security reasons and Moscow believes it can make it happen. In return, Moscow hopes it can influence Iran’s oil policy if an agreement is reached between Tehran and the West and sanctions are lifted on Iran’s energy exports. Essentially, Moscow would like Iran to sell only a tiny proportion of its oil to Europe, while expanding sales to friendlier nations in the East.
Diplomatically and politically, Mr Putin would like to benefit from facilitating a nuclear deal with Iran, to appear as an influential actor in the international space. Practically, he hopes to get a guarantee at the SCO summit that Iran would not sell the bulk of its oil to Europe.
European powers really believed that Iran would choose them over Russia in the era of energy wars. They were keen to strike a deal with Tehran even if it meant making significant concessions in the nuclear talks. In reality, Iran would never choose Europe over Russia, especially given its long-term strategic alliance with Moscow.
The Iranian regime made a tactical move when it agreed to relax its insistence to the US that it de-list the Islamic Revolutionary Guard Corps as a terror group, as one of its conditions to revive the JCPOA. In exchange, the Biden administration reportedly agreed to lift sanctions on Iranian companies that deal with the IRGC, a move that threatened to sink the deal after it faced opposition among members of the US Congress who saw it as a collusion with the regime.
The other issue that could still endanger the talks is Iran’s refusal to commit to additional inspections of its nuclear activities by the International Atomic Energy Agency. The IAEA recently announced it could not guarantee the peaceful nature of Iran’s nuclear programme, and said no progress had been made on the issue of undeclared sites suspected of pursuing clandestine nuclear activities.
Expert opinion is divided on the fate of the talks.
Some believe that a deal is inevitable despite the obstacles, and that Europe’s need for Iranian oil would push US President Joe Biden to guarantee a deal at any cost. They also think that Iranian threats of retaliation will put further pressure on Mr Biden and the IAEA to overcome the issue of nuclear inspection. But, “no so fast”, say the naysayers who oppose making concessions. Their view is that the Biden administration must never bend to Iran given what’s at stake, not just in terms of its nuclear capabilities but also the fate of the Democratic Party at the mid-terms. Then there is Israel, which wants to claim credit for thwarting a "bad deal" with Iran.
What, then, could happen then if talks fail, or succeed?
Tehran has, so far, remained silent after Israel recently bombed its vital sites in Syria. First, because it has been keen on safeguarding the nuclear talks. Second, because Russia has asked Iran not to respond to Israeli provocations in Syria. Third, because talks behind the scenes have been aiming to secure covert Iran-Israel accords.
But if nuclear talks are to collapse, it isn't out of the question that Iran would retaliate through attacks on Israel across the Syrian and Lebanese borders. A direct military confrontation is not far-fetched either, although the cost of such an adventure – for Iran as well as Israel – makes it unlikely.
Lebanon could host a hot front if the Iranian regime orders its proxy, Hezbollah, to disrupt ongoing efforts to demarcate the maritime border with Israel, and prevent Israel from oil and gas exploration. In that scenario, and in the absence of any de-escalation accords, Israel might decide against turning a blind eye to Iranian rockets in Hezbollah’s hands.
Iran continues to sell its oil to China, India and others at a time of high oil prices, allowing it to compensate the absence of US-led sanctions relief. Tehran may even decide that not disrupting Lebanese-Israeli border talks would benefit it economically, because oil and gas revenues from Lebanon may reduce the bill of supporting Hezbollah.
Israel would also prefer a scenario wherein it is able to extract oil and gas without any trouble. For this reason, it is making sure to avoid a direct war with Iran. The continuation of the status quo may also be acceptable to Israel, if it can carry out covert operations against Iran’s nuclear weapons programme.
The Europeans are the least comfortable with the status quo due to the Ukraine crisis. They are unlikely to get Iranian oil supplies whether there is a deal or not. And they fear that Moscow could succeed in driving a wedge among them as a cold winter approaches.
However, it doesn't mean that this is the end of the road for the nuclear talks. The continuation of sanctions against Iran is a choice and a decision that Mr Biden could still use to his advantage, to avoid slipping into a military confrontation and allow Israel freedom of action if needed.