(Bloomberg) – The Biden administration faces the grim reality that a return to the Iran nuclear deal may no longer be possible, as the Islamic Republic finds ways to deal with US sanctions and rushes towards the ability to build a bomb.

U.S. officials are examining their options after months of unsuccessful return-to-deal talks, according to people familiar with the talks. While it still calls for a swift return to the pact as the path to a “longer and stronger” deal, the United States is ready to weigh alternatives, including the middle step of limited sanctions relief by. Iran’s freeze exchange for its most provocative proliferation work, they mentioned.

This prospect is in part a response to heightened tensions with the election and the inauguration last week of the new hard-core Iranian president, Ebrahim Raisi, and a series of provocative incidents, including rocket attacks on Israel by militants from the Iran-backed Hezbollah and attack on an oilfield site off the coast of Oman. Iran has denied responsibility for the HV Mercer street strike, which killed a Romanian citizen and a British citizen and added to the nervousness of the oil markets.

“It was never going to be easy, but the hope was that both sides would calculate that reinstating the deal would always be the cheapest option,” said Ali Vaez, Iran project director at International Crisis. Group, which made a proposal for a reduced interim agreement. “But both sides are to blame for wasting this golden opportunity.”

Failure to revert to the original deal would mark a major setback for President Joe Biden, who had ranked relaunching the multinational deal as a top foreign policy priority and a key to his plans for the Middle East despite protests by allies such as Israel and the Gulf. countries including Saudi Arabia and Bahrain. Former President Donald Trump resigned from the pact placing limits on Iran’s nuclear program in exchange for sanctions relief in 2018. Six rounds of talks in Vienna since Biden took office have made little progress. There is no date set for a seventh.

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The current situation was described by several people familiar with the talks who asked not to be identified because they were not authorized to speak publicly about the matter. They said the United States’ goal was still a full return to the terms of the agreement known as the Common Comprehensive Plan of Action, although they acknowledged that they had no evidence that the Iranian government was prepared to do so.

The markets are watching. Oil fell 7.7% last week, its largest weekly drop since October, as concerns over the economic impact of the delta coronavirus variant took center stage. But markets have also been destabilized by the attack on the Israeli-run oil tanker and the warning from Israeli Defense Minister Benny Gantz that Israel is ready to attack Iran if need be.

The challenge facing US negotiators, people said, is that the Biden administration has been unable to exploit the leverage of sanctions to prevent Iran from violating the terms of the deal. , while Iran, with a new ultraconservative president and a rapidly advancing nuclear program, has so far signaled that it is not ready to acquiesce despite the continued economic pain imposed by the sanctions.

Iran on the move

US and EU officials fear the time is fast approaching when Iran’s nuclear know-how will advance so far that any return to the JCPOA will be meaningless and a whole new deal will have to be struck. The deal was structured to keep Iran one year away from developing a nuclear weapon. But his program is moving so fast that he will soon be able to build a bomb much faster. Iran has long said it has no intention of doing so.

Even more frustrating for the Biden administration, it largely blindly steals Iran’s current intentions. Based on assurances from the previous Iranian government, the belief was that the two sides could come to an agreement after Raisi’s election but before he came to power. This does not happen. Now officials say they believe the current government has yet to decide which route it wants to take.

“The sanctions against the Iranian people must be lifted and we will support any diplomatic effort aimed at achieving this goal,” Raisi said in his inaugural address last week. He also warned of “foreign interference” in the region.

The slow pace of the talks upsets some assumptions about what will happen next, according to a senior Western diplomat who is familiar with the talks and asked not to be identified to discuss private deliberations. This includes faint hopes for a broader deal that would encompass concerns about Iran’s ballistic missile program and its support for groups the United States and its allies consider terrorists.

“We urge Iran to resume negotiations quickly so that we can seek to conclude our work,” State Department spokesman Ned Price said last week. “The possibility of achieving a mutual return to compliance with the JCPOA will not last forever. “

Sanctions persist

Work for the United States: The tough sanctions regime that was reimposed under Trump has put unprecedented pressure on Iranian leaders as it keeps their country’s economy in a straitjacket. Iranian crude and condensate exports have risen from a peak of more than 3 million barrels per day in October 2016 to 150,000 barrels per day currently, according to data compiled by Bloomberg.

Yet Iran is enduring its limited circumstances under the anti-American bravado of Supreme Leader Ayatollah Ali Khamenei.

“This is not a substitute for genuine sanctions relief, and they would be making a very big miscalculation in thinking things are going well,” Henry Rome, senior analyst at Eurasia Group, said of Iranian leaders. “I am not at the stage of panic that others are approaching. The goal is always full compliance for full compliance.

Groups that supported Trump’s decision to drop the deal with Iran – including the Foundation for Defense of Democracies and Republican Senators Ted Cruz and Tom Cotton – have made it clear they will be pushing for a future Republican president to reimpose any sanctions Biden has agreed to lift.

This was precisely the strategy of those in the Trump administration who sought to complicate any return to the deal they had reneged on, in part by imposing a series of sanctions – presented as a response to human rights violations and terrorist financing – which will be politically difficult to eliminate and popular to reimpose.

Now Iran is asking for all sanctions relief and an American promise, which Biden cannot make, that his successor will not reimpose them.

Yet despite rising tensions and tough talks, some diplomats and analysts say Iran could still offer an opening to a deal.

“The door to diplomacy and dialogue remains open,” Barbara Woodward, UK ambassador to the United Nations, told reporters even as she condemned Iran for the tanker attack.

“If Washington and Tehran stick to the ‘the ball is in the court on the other side’ approach, it’s hard to imagine making any progress,” said Suzanne Dimaggio, senior fellow at the Carnegie Endowment for International Peace. “It is in the interests of both countries to restore the agreement before the escalating trend in which we find ourselves takes hold.

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