The Iran nuclear deal and rising tensions in the Gulf

Nuclear deal

In 2015 Iran and six negotiating nations, China, France, Germany, Russia the UK and the US, announced they had reached an agreement on the Iran nuclear problem. Under the Joint Comprehensive Plan of Action (JCPOA) Iran agreed to limit its nuclear programme and allow enhanced inspections by the International Atomic Energy Agency. In return, UN Security Council sanctions and multilateral and national sanctions were lifted. The UN Security Council endorsed the JCPOA in Resolution 2231.[1]

US withdrawal

In May 2018, however, the US announced it was withdrawing from the deal and started to re-introduce sanctions. In April 2019 the Trump administration announced its intention to reduce Iran’s oil exports to zero. The US accuses Iran of using oil revenues to “support its destabilizing activities and fund terrorist proxies”, to finance its nuclear weapons and ballistic missile programmes and undermine the stability of the region, including threatening freedom of navigation through the Gulf. In November 2018 the US re-imposed sanctions targeting both Iran and states that trade with it.

The JCPOA’s other signatories so far remain committed to the agreement. The UK, France and Germany responded to the US withdrawal in 2015 by emphasising their continuing commitment to the JCPOA. The EU has passed legislation aiming to protect EU-Iran trade from the extraterritorial effects of US sanctions.

Iranian breaches

In April 2019 Iran warned it would start enriching uranium beyond the amount agreed in the deal if European countries did not do more to protect Iranian trade from the effects of US sanctions. In May Iran said it would no longer abide by the JCPOA limit of 300kg stored uranium enriched to 3.67%.

On 2 July the International Atomic Energy Agency confirmed that Iran had breached the 300kg limit for its stockpile of low-enriched uranium. On 7 July Iran said that it had begun enriching uranium over the limit of 3.67%, the concentration limit set out in the JCPOA.

In the year since the US pulled out of the JCPOA and started re-imposing sanctions, Iranian oil exports have fallen from around 2.5 million barrels per day to below 1 million in April 2019. The Iranian rial has lost more than 60% of its value against the US dollar. The IMF predicts that inflation will hit 40% this year.

Rising tensions

Tensions have significantly increased after various attacks on tankers in the Gulf region in 2019. The UK Government agrees with Washington that Iran is very probably responsible for the attacks. The then Foreign Secretary said “responsibility for the attacks almost certainly lies with Iran”, while the Minister for the Middle East said it is “almost certainly” the responsibility of the Islamic Revolutionary Guard Corps, arguing “no other state or non-state actor could plausibly have been responsible”.[2]

The US announced the deployment of an extra 1,000 troops to the Middle East, having already announced the deployment of an aircraft carrier group to the Gulf.

Abqaiq attacks

On 14 September, drones and cruise missiles hit two oil processing facilities in Saudi Arabia, dramatically raising tensions. The Houthi rebel movement in Yemen at first claimed responsibility but many saw the hand of Iran behind the scenes, particularly given the technical proficiency of the attacks. Saudi air defences completely failed to protect the installations. Global oil prices surged on the news.

Saudi Arabia and the UAE requested defence assistance from Western allies. The US announced it would send 200 further troops and more air defence equipment.

Risk of armed conflict

Many commentators have argued that the growing tensions could result in conflict by misunderstanding. The UK Government said in May it is concerned about “the risk of unintended escalation between the United States and Iran”. In June the Minister for the Middle East said the Government’s aim is to “de-escalate the situation”.

There had been signs of a more conciliatory attitude in the West, signalled partly by the dismissal on 10 September 2019 of John Bolton, hawkish on Iran and Afghanistan, from his role as US National Security Adviser. Some commentators argue that Iran has gained leverage by provoking a crisis.

[1]    For more information see the UN Security Council backgrounder on Resolution 2231.

[2]    HC Deb 17 June 2019 c61