USA and Iran: JCPOA

As the USA’s hard exit from the JCPOA deal has much broader implications for global peace and security, it is important to understand what strategic options Iran could choose to exercise in retaliation.

The Joint Comprehensive Plan of Action (JCPOA), negotiated between Iran and the permanent members of the UN Security Council and the European Union, was agreed on 14 July 2015. The objective of this agreement was to limit Iran’s nuclear program in exchange for much needed sanctions relief.

Under the terms of the agreement, Iran would discard its stockpile of medium-enriched uranium and significantly reduce its stockpile of low-enriched uranium in addition to removing one third of its gas centrifuges for a period of thirteen (13) years. Furthermore, Iran would limit its uranium enrichment levels to less than five percent and agree not to build any new heavy-water facilities.

The agreement also included provisions to ensure that the International Atomic Energy Agency (IAEA) would have regular access to Iranian nuclear facilities to enable ongoing nuclear non-proliferation compliance monitoring. In return for verifiably maintaining its commitments, Iran would receive direct economic relief as well as the lifting of UN Security Council nuclear-related economic sanctions.

However, despite Iran’s compliance, the United States withdrew from the deal on 8 May 2018, citing Iran’s failure to fully disclose the extent of its secret nuclear program to the IAEA back in 2015; a key requirement of the deal.

As the USA’s hard exit from the JCPOA deal has much broader implications for global peace and security, it is important to understand what strategic options Iran could choose to exercise in retaliation. Such retaliation by Iran, could greatly destabilise a region, already impacted by its proxy war with Saudi Arabia. In examining these risks, we have identified eight probable courses of action that Iran may pursue. Our predictive analysis of these options are summarised as follows:

  • Iran has to date, proven to be a surprisingly rational actor and patient strategist in navigating its proxy war with Saudi Arabia. Iran’s retreat from its overt pursuit of nuclear weapons was a judicious and deliberate decision that will not be immediately undone, as it still remains in Iran’s best interest to continue to seek normalised relations with other nation states around the world. Nonetheless, we can reasonably expect Iran to hedge by expanding their technical capacity to produce nuclear arms.
  • However, this is not to imply that Iran will refrain from acting upon the USA’s imposition of all pre-JCPOA economic sanctions. Rather, Iran will do what it does best, and respond to these sanctions, asymmetrically. They will not attack the US head-on, but will begin to chip away at US strategic interests in the region.
  • Iran’s pursuit of asymmetric warfare could significantly challenge the USA’s ability to cost effectively maneuver in the region, by threatening, for instance, the safe passage of cargo ships and oil tankers transiting the Strait of Hormuz. We therefore expect more commercial ships to be harassed or seized by Iran.
  • From a cyber perspective, Iran has, by all indications, already “prepped the battlefield” by compromising sensitive ICS infrastructure across the USA – an issue that utilities are still trying to wrap their heads around as of 2018. We may very well see an escalation in the intensity of attacks by Iran’s proxy hacking groups.
  • Iran will continue to pivot towards China, Russia and elsewhere, which may complicate matters for the USA when they do ultimately attempt to negotiate.
  • Iran may take this opportunity to further destabilise Iraq by leveraging their political influence within the central government to pursue policies that stoke the flames of sectarian tensions. Iran may also double down on its joint attacks with Turkey on PKK.

In our assessment, the USA’s hard exit from JCPOA will make Israel less secure in the short-term, as Iran may choose to mobilise Hezbollah to harass, threaten or attack Israeli interests and citizens in the region and abroad. The European Union will likely take this opportunity to further assert its own interests and double down on its pivot towards China, and if threatened by secondary US sanctions, will likely target US assets in Europe.

The USA’s decision to unilaterally withdraw from the JCPOA, as opposed to negotiating it, will further weaken the USA’s ability to assert global leadership and harm its image as a trusted and reliable global partner. Time will tell whether this decision will compromise the USA’s standing in upcoming negotiations with North Korea.

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