• Bryan

A Dangerous Game In The Gulf Region As Iran Plays The Uranium Card

Iranian President Hassan Rouhani has warned on Wednesday that Iran will this weekend enrich uranium to whatever level that they wanted.

Furthermore, the International Atomic Energy Agency confirmed Tuesday that Iran is stockpiling more enriched uranium than is allowed under the nuclear deal signed in 2015. President Trump responded by saying that Iran was playing with fire.

This announcement by President Rouhani is the latest in a number of actions that have contributed to the ratcheting up of tensions between the US and Iran in recent months. So why has the Iranian regime decided to make this latest announcement?

The US was a signatory to the Joint Comprehensive Plan of Action with Iran, but President Trump unilaterally pulled the US out of the deal against the advice of US allies (UK, France, Germany, EU) as well as the other signatories Russia and China. In the 2015 agreement (JCPOA), enrichment of uranium-235 by Iran was capped at 3.67%. Enriched uranium is generally used for things like electricity production and for medical research, but it could be further purified to create fissile material - the fundamentals for a nuclear weapon.

The JCPOA was designed to curb Iran's ability to develop a nuclear weapon, while allowing it to carryout research for peaceful purposes. In return, international sanctions initiated by the US would be eased through a phased approach, based on reporting by International Atomic Energy Agency inspectors indicating that Iran was complying with the agreement.

Since President Trump reimposed sanctions on Iran in 2018, the country has lost around $50 billion in crude oil revenues, which has sucked the life out of the economy, leaving the Iranian government in a desperate situation.

So what happens now?Iran insists that it is simply reacting to US violation of the 2015 agreement, which promised sanctions relief for Iran. European signatories to the deal had promised Iran that they would create trade and payment mechanism - INSTEX, that would allow Iran to bypass the reimposed US sanctions.

In reality, the system has the chance of succeeding only if businesses are willing to use the system. Most businesses have weighed the cost of doing business in Iran against retaliatory action from the US government, including losing access to the lucrative US market, and have decided that it just was not worth the risk.

Iran's economy will continue to shrink and the theocratic dictatorship running the country will increasingly get desperate, fearful of their people reacting to the worsening economic situation and rising up against the regime.

The regime is likely to continue the approach of incremental and provocative actions that may not necessarily cross the kind of threshold that can lead to military action by the US.

When Iran shot down the US RQ-4 Global Hawk unmanned drone in the Strait of Hormuz in June, there was another US aircraft flying alongside it - a P-8 spy plane with crew on board. Iran deliberately avoided targeting the manned craft.

Although President Trump called off at the last moment a retaliatory military strike against Iran - he cited significant loss of Iranian life as disproportionate and his reason for calling off the US strike.  It would definitely have been a different and dangerous situation if Iran had shot down the manned plane and US service personnel had died as a result. Iran also sees that North Korea's nuclear capability has played a part in the political survival of Kim Jong Un and his regime. Iran recognizes that the US is less likely to attack a country with nuclear weapons, especially if the country has missile-range to hit US allies in the region such Israel and Saudi Arabia. The prognosis is not good given that negotiations are unlikely in this climate. The cat-and-mouse game between the US and Iran could continue until a miscalculation leads to conflict. If a major conflict starts, then all bets are off on global oil supplies, price and the insurance and costs of shipping.

Iran on the other hand may decide to keep its head down and wait out the Trump presidency.