Iran on Monday began enriching its stockpile of uranium to 4.5% purity, breaching the terms of the 2015 nuclear deal that Washington abandoned last year. This comes days after Iran exceeded the 300-kg limit to its low-enriched uranium stockpile, breaching another cap set by the nuclear deal.
These moves come as part of a series of aggressive actions by the U.S. and Iran. It began last year when the U.S. unilaterally pulled out of the nuclear deal and reimposed sanctions that have hit the Iranian economy. Iranian oil exports have fallen drastically and it has put its economy in a precarious situation. Oil exports dropped from 2.5 million barrels per day (bpd) to about 300,000 bpd in the first three weeks of June after the U.S. withdrew the waivers it had granted to a few countries, including India, to import oil from Iran.
Iran has urged the remaining signatories of the deal to come up with an effective solution to help it circumvent U.S. sanctions. It had earlier threatened to exceed 20% in enrichment of uranium if Europe had not made any progress by July 7. Once 20% enrichment is reached, enriching it to weapon-grade levels of 90% is only a short step.
Why did the deal fall apart?
Officially known as the Joint Comprehensive Plan of Action (JCPOA) it was signed by Iran, the five countries of the UNSC (the U.S., the U.K., France, China and Russia), Germany and the EU. The Islamic Republic was suspected of developing nuclear weapons surreptitiously; a charge that it denied. Under the deal, Iran agreed to limit its nuclear capabilities and, in return, international sanctions would be lifted. As per the deal, Iran reduced the number of its centrifuges used for enriching uranium by two-thirds, restricted its uranium enrichment to 3.67%, and removed the core of its heavywater facility in Arak.
In May 2018, U.S. President Donald Trump pulled out of the deal stating it did not make an effort to curb Iran’s “sponsoring of terrorism” abroad and its ballistic missiles programme. Moreover, the Trump administration was afraid that Iran still had the capability to develop a nuclear weapon within a year and might do so once the agreement ends, while also enjoying the benefits of sanctions relief. Mr. Trump reinstated several sanctions on Iran which had been lifted under the deal. This caused a strain to Iran’s economy and Iran attempted to push the European signatories of the deal to make an effort to save it.
Did Europe try to save the deal?
Unlike Mr. Trump, European leaders are keen on keeping the nuclear deal alive. To this end, they have made efforts to prevent Iran from scaling out of the agreement. They launched a new trade mechanism called Instrument in Support of Trade Exchanges (INSTEX) to continue trade with Iran in a non-dollar basis. But INSTEX covers only humanitarian goods such as medicine, water, and food supplies, which are not affected by the sanctions anyway. INSTEX does not help in trading oil, which is the lifeline of the Iranian economy. Iran and other signatories met in Vienna on June 28 to work out a solution, but saw no breakthrough. The European leaders declared INSTEX operational after the conference, but Iran opines that although it is a positive development, Europe can ‘do more’.
Circumventing U.S. sanctions via an alternative trade mechanism is not very simple as it is the European companies and not the government that have to trade with Iran, in the face of U.S. antagonism.
What’s Trump’s response?
Asked about Iran’s recent violations of the nuclear deal, Mr. Trump said Iran is “playing with fire”. Secretary of State Mike Pompeo and National Security Adviser John Bolton are known for their hawkish stance vis a vis Iran.
But Mr. Trump has also said that he doesn’t want war with Iran. Recently, he rescinded the permission he gave to troops to attack Iran after the latter shot down an American drone near the Strait of Hormuz. He cited the casualty that might number in the hundreds as reason to stop his forces from attacking Iran.