For some time now a pattern has developed in the standoff between Iran and the United States in which the U.S. and its allies strengthen sanctions against Tehran, which responds by making advances in its nuclear program. The increased sanctions and nuclear advances are then used by each side as bargaining chips in negotiations.
In the meantime the standoff has become relatively stable in the short term as Iran has carefully limited its stockpile of 20 percent enriched uranium and has not enriched to higher levels, while the U.S. has not acted on its military threats and has sought to constrain Israel from exercising its own military option.
In the last 24 hours two new factors have emerged that could potentially derail this stability over the next few years.
The first and most serious one was an announcement by the head of the Iranian Atomic Energy Organization, Fereydoon Abbasi-Davani, that Iran may seek nuclear submarines in the future. This is significant because nuclear submarines require nuclear fuel that is enriched to anywhere between 45 and 90 percent levels, the latter being bomb-grade.
"At present, we have no enrichment plan for purity levels above 20 percent, but when it comes to certain needs, for example, for some ships and submarines, if our researchers need to have a stronger underwater presence, we will have to make small engines which should be fueled by 45 to 56 percent enriched uranium," Abbasi-Davani said on Tuesday.
The only potential bright spot is that Abbasi-Davani said that future nuclear submarines would be designed to run on the low-end of the nuclear spectrum. Still there is no question that a decision by Iran to move beyond 20 percent uranium would be seen as a major escalation in the ongoing standoff, and one that might prompt Israel or the U.S. to act on their military threats.
It should be noted that it is quite possible (probably even likely) that Abbasi-Davani is bluffing. Iranian officials in the past have suggested Tehran may someday want nuclear submarines, and despite the relative stability of the current standoff Iran has clear interests in ending it given that it is the side suffering economically from sanctions. Thus making this announcement could very well be aimed at forcing the West’s hand in negotiations. This would be consistent with Supreme Leader Ali Khamenei’s recent warnings that Iran will not negotiate simply for the sake of negotiating.
At the same time, the nuclear submarine gambit would be consistent with the trajectory of the Islamic Republic of Iran’s nuclear program to date. Specifically, Iran has made incremental progress on its nuclear program without technically going beyond what non-nuclear weapon states that are in good standing have a right to do under the Nuclear Non-Proliferation Treaty. It has justified making these advances on civilian grounds but the same technologies have nuclear weapon applications. While nuclear submarines are not for civilian purposes they still allow Iran to deny it has ambitions to acquire nuclear weapons. Thus, in making this announcement Tehran is reminding the U.S. and its allies that if the current standoff continues, it can take actions that put it remarkably close to actually having a nuclear weapon while maintaining some plausible deniability.
This was not the only bad news Western policymakers received on Tuesday regarding Iran’s nuclear program with the rest coming from the International Monetary Fund's (IMF) World Economic Outlook. In the report the IMF forecasts that, although Iran’s economy shrunk by 1.9 percent in 2012, and is expected to shrink an additional 1.3 percent this year, it will begin growing again by 2014 starting at a rate of 1.1 percent. Furthermore, the IMF believes Iran will continue to maintain an account surplus, which significantly reduces the possibility that the Islamic Republic will encounter a balance-of-payment crisis that could undermine its ability to govern.
Although Iran has become more secretive about economic data as international sanctions against it have increased, it has continued to cooperate with the IMF, leading some to believe the IMF data on Iran’s economy are the most accurate available. If the IMF is correct in its forecast, Iranian leaders have every reason to believe that their economic situation will not get much worse than it currently is, and will in a short while begin improving.
In essence, Iran has threatened to strengthen its hand relative to the U.S. and its allies at the same time the Western powers’ hand has been shown to be weakening. The U.S. still has a number of options available short of military strikes to strengthen its bargaining position— such as additional actions to sabotage Iran’s nuclear program, deepening its involvement in Syria, and/or imposing a full economic blockade on Iran— but many of these carry risks and costs which the U.S. has thus far not demonstrated a willingness to bear. In any case, it is far from clear that any of these options would have much impact on Iran’s nuclear program.