Unintended Consequences of Abrogating Iran’s Nuclear Deal

by James M. Dorsey

US President Donald J. Trump’s targeting of a two-year-old agreement curtailing Iran’s ability to produce nuclear weapons could not only spark a nuclear arms race in the Middle East, but also tilt European-Chinese competition for domination of Eurasia’s future energy infrastructure in China’s favor.

As Trump keeps the world in suspense by declining to disclose how he intends to correct what he calls an embarrassment, Iranian leaders are betting against the odds that European signatories of the nuclear agreement will persuade him to stop short of pulling out of the nuclear deal and avoid steps that would effectively undermine the accord.

In doing so, Iranian President Hassan Rouhani is relying on common interests with Europe: a desire to keep the deal in place, prevent Iranian hardliners from getting the upper hand in his country’s power struggles, avoid a nuclear arms race, and ensure a European role in shaping the future architecture of Eurasian energy.

However, if Trump’s record is anything to go by, he is unlikely to heed European calls for keeping the nuclear deal in place, much like he ignored pressure from Europe and others not to pull out of the Paris climate accord.

A more likely scenario is that Trump will refuse to certify Iranian compliance with the deal by October 15, a quarterly requirement mandated by Congress. That would open the door to Congress re-imposing secondary sanctions lifted as part of the nuclear deal.

Renewed secondary sanctions would put Europe in an impossible position. They would not only put European companies and banks at risk of running afoul of US law if they continued to do business with Iran, but also unleash consequences that could significantly increase tension in the Middle East and ripple across Eurasia.

De facto European compliance would significantly weaken the agreement’s value to Iran, boost pro-Chinese Iranian hardliners opposed to the deal and eager to free Iran from restrictions on its nuclear program, risk a nuclear arms race in an environment in which the US is losing out in the Middle East’s quest for nuclear energy that contains tacit building blocks for programs to develop nuclear weapons, and potentially tilt Iran towards China in determining the flow of its natural gas – a key factor in the quest to shape the future architecture of Eurasian energy.

“If the United States leaves the treaty and Europe follows, then this deal will certainly collapse and Iran will go back to what it was before and, technically speaking, to a much higher level,” said Ali Akbar Salehi, the head of Iran’s Atomic Energy Organization.

The United States may be unprepared for the fallout of Iran pursuing an unfettered nuclear program, beyond its ability to tighten the economic screws, wield military power, and support potential efforts to destabilize Iran in a bid to achieve regime change.

A group of former senior US government and military officials recently warned that the United States in the absence of a strategy to promote the peaceful use of nuclear energy was lagging behind China and Russia in helping Middle Eastern states develop programs of their own. The officials cautioned that Trump’s failure to articulate a policy undermined “Washington’s ability to shape the highest standards of non-proliferation safeguards, safety, and security.”

Noting that “the Middle East is in the process of going nuclear,” the officials went on to say that “the big question is whether the nuclearization of the region will be dominated by Russia and China, or by the host countries in partnership with the United States and its allies under a proven program that ensures absolute safety, security and standardization throughout the nuclear fuel cycle.”

Most Middle Eastern states are signatories to the Non-Proliferation Treaty (NPT). They have disavowed the pursuit of nuclear weapons and called for a nuclear-free zone in the region in a bid to force Israel to declare its nuclear weapons and join the NPT and at the same time avert a nuclear arms race with Iran.

Saudi cooperation with nuclear power Pakistan has nonetheless long been a source of speculation about the kingdom’s ambition. Pakistan’s former ambassador to the United States, Husain Haqqani, asserted that Saudi Arabia’s close ties to the Pakistani military and intelligence during the anti-Soviet jihad in Afghanistan in the 1980s gave the kingdom arms’ length access to his country’s nuclear capabilities.

The Washington-based Institute for Science and International Security (ISIS) said earlier this year that it had uncovered evidence that future Pakistani “assistance would not involve Pakistan supplying Saudi Arabia with a full nuclear weapon or weapons; however, Pakistan may assist in other important ways, such as supplying sensitive equipment, materials, and know-how used in enrichment or reprocessing.”

The report said it was unclear whether “Pakistan and Saudi Arabia may be cooperating on sensitive nuclear technologies in Pakistan. In an extreme case, Saudi Arabia may be financing, or will finance, an unsafeguarded uranium enrichment facility in Pakistan for later use, either in a civil or military program,” the institute said.

Rather than embarking on a covert program, the institute predicted that Saudi Arabia would, for now, focus on building up its civilian nuclear infrastructure as well as a robust nuclear engineering and scientific workforce.

This would allow the kingdom to take command of all aspects of the nuclear fuel cycle at some point in the future. That process could accelerate if US actions undermine the nuclear agreement with Iran.

Saudi Arabia has in recent years significantly expanded graduate programs at its five nuclear research centres as part of a $100 billion program to build 16 nuclear reactors by 2030.

Saudi King Salman earlier this year signed an agreement with China on cooperation on nuclear energy. The agreement is for a feasibility study for the construction of high-temperature gas-cooled (HTGR) nuclear power plants in the kingdom as well as cooperation in intellectual property and the development of a domestic industrial supply chain for HTGRs built in Saudi Arabia.

The agreement was one of number nuclear-related understandings concluded with China in recent years. Saudi Arabia has signed similar agreements with France, the United States, Pakistan, Russia, South Korea and Argentina.

Lurking in the background of the battle for the future of the Iranian nuclear agreement is an unrelated but no less important issue: the future of Eurasia’s energy architecture. US efforts to undermine the deal and de facto European compliance with US sanctions could push Iran to favour China rather than Europe in allocating its estimated surplus over the next five years of 24.6 billion cubic metres of natural gas. Iran boasts the world’s second largest natural gas reserves and its fourth largest oil reserves.

“Not enough to supply all major markets, Tehran will face a crucial geopolitical choice for the destination of its piped exports. Iran will be able to export piped gas to two of the following three markets: European Union (EU)/ Turkey via the Southern Gas Corridor centring on the Trans-Anatolian Natural Gas Pipeline (TANAP), India via an Iran-Oman-India pipeline, or China via either Turkmenistan or Pakistan. The degree to which the system of energy relationships in Eurasia will be more oriented toward the European Union or China will depend on the extent to which each secures Caspian piped gas exports through pipeline infrastructure directed to its respective markets,” said energy scholar Micha’el Tanchum.

The lifting of international sanctions as part of the nuclear agreement gave Iran a vested interest in deploying its energy wealth in ways that would allow it to balance its relations with China and Europe. A Europe incapable of developing economic ties with the Islamic republic, including the expansion of pipeline infrastructure, could undermine Iran’s calculus to China’s benefit.

James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and four forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africa as well as The Gulf Crisis: Small States Battle It Out, Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom. Republished, with permission, from The Turbulent World of Middle East Soccer blog. Photo: Saudi Crown Prince Mohammed bin Salman meets with former Pakistani Prime Minister Nawaz Sharif.

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6 Comments

  1. The agreement did not curtail Iran in any way because Iran did not have any intention to make a nuclear weapon- another way of Obama to promote himself so that he would get more reelection votes.

  2. A good contribution to this important debate. I will comment on two matters.
    Iran has a plan A and (at least) a plan B regarding what the US will do in October. As written, plan A hopes that statements of the ‘facts’ from multiple sides (including LobeLog posts) will result in no Congressional action to undermine UN Security COuncil (UNSC) RES/2231 (2015) ( incorporating JCPOA), after Pres. Trump sends the ball to Congress in mid-October.
    My guess of a plan B is that, if Congress defaults on US commitments under RES/2231, to work through UNSC to confirm the rest of the world’s commitment to it.
    The US cannot withdraw from RES/2231; its commitments will remain on the books of international law, until another resolution is passed by UNSC — and don’t hold your breath on that.
    A significant fact about RES/2231 not getting attention is that it has mandated IAEA to carry out the verifications and monitoring of Iran that go beyond Iran’s NPT obligations. Those mandated actions by IAEA will continue no matter what the US is doing about its commitments under RES/2231. — until another UNSC resolution changes that.

    The second matter is the confusing mixing of nuclear energy development – in agreement with NPT commitments – and nuclear weapon development, which requires withdrawal from NPT, as DPRK did (or at least tried to do). Nuclear energy development involves big, long term commercial contracts, and around the world there is a competitive struggle for that business, involving mainly Russia, South Korea and France, with China trying to enter. Japan is pretty much out of it as is the US. Those developments are good for the country involved, and also the world. it is a mistake to mix those developments up with long term possibilities for a country deciding its national security needs a nuclear deterrent

  3. Interesting “inside baseball” discussion, but may not have much impact on reality. The risks of proliferation will likely continue in the “deep and dark” states outside of public view. The danger is clearer in the actions of rogue states, and non-states. The ability to corral nuclear devices, and control their use, depends on the decisions of leaders, and minders, all of which are deliberately, or accidentally, error prone. It is a dangerous world.

  4. I’ve written a blog article that delves heavily into the evidence that Iran has no nuclear weapon ambitions,
    a decision taken on commendable moral grounds. Search for “A Question of Ron Wyden’s Intelligence” on my Relatively Free Press blog.

    My still nagging question is why Obama did not publicize the nation’s intelligence reports attesting to Iran’s lack of nuclear weapon ambitions to shut up the Israeli and fellow traveler’s claims that Iran had such ambitions and an ongoing nuclear weapons development program in response to the neocon charges that Iran had such a program, which claims the neocons were standing on to persuade Obama to bomb Iran back into the Stone Age. Instead, Obama pursued the JCPOA.

    But why? My only idea so far has been that Obama wanted to retain an excuse for going to war against Iran. But my intuition is that there was more to it than that.

    Any ideas?

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