Navigating the Nuclear Impasse: Iran’s Strategic Dilemma in the Trump Era

Preface: A Memo Through the War

This memo was first drafted as Iran and the United States reopened nuclear negotiations in Muscat in April 2025. At the time, diplomacy seemed to offer a narrow but genuine path to de-escalation. Since then, the regional landscape has been transformed by a sharp escalation in Israel-Iran hostilities, bringing the threat of full-scale war—and of nuclear proliferation—closer than at any point since the JCPOA was signed.

Rather than revise this text as if it were written after the fact, we have chosen to preserve the structure and tone of the original memo, while weaving in critical updates where they matter most. This version thus stands as both an analysis of Iranian strategy during the Muscat talks and a reflection on the challenges of diplomacy in a rapidly collapsing security environment.

A decade after negotiating its way out of UN Security Council Chapter VII measures through the Joint Comprehensive Plan of Action (JCPOA), Iran once again finds itself at a familiar crossroads—facing escalating Western pressure amid a deepening collapse of trust in multilateral frameworks. In April 2025, U.S.-Iran nuclear negotiations resumed in Muscat, signaling a potential opening. Tehran’s strategy appeared calibrated: advance the nuclear program just far enough to gain leverage while mitigating existential threats, extending diplomatic feelers to avoid isolation or confrontation.

But what was already a delicate balancing act—between resistance and engagement—has become even more precarious in the wake of the June 2025 military escalation. The window for diplomacy has narrowed, if not slammed shut. This memo revisits Iran’s strategic calculus at the time of the Muscat talks and considers how the rapidly evolving regional and global landscape, including renewed threats of force, is reshaping Tehran’s nuclear options—and Washington’s.

Strategic Developments Since 2018

The strategic developments in Iran’s nuclear program since 2018 have been primarily shaped by the U.S. unilateral withdrawal from the JCPOA and the subsequent imposition of severe economic sanctions under both the Trump (through the ‘maximum pressure’ campaign)¹ and Biden administrations.²

In response to these sanctions and international pressures, Iran has taken gradual steps to reduce its commitments under the JCPOA while advancing its technical capabilities in uranium enrichment. This dual-track approach has been a hallmark of Tehran’s posture in the face of Western pressure.

After the Trump administration withdrew from the JCPOA, European powers (particularly the E3: France, Germany, and the United Kingdom) attempted to salvage economic engagement with Iran through the INSTEX mechanism. But this effort proved insufficient, and Iran’s mistrust of Western guarantees deepened.³

Indirect negotiations between Iran and the United States resumed in Vienna during the early Biden years (2021-2022) but ultimately failed to restore the JCPOA due to persistent disagreements—chiefly the U.S. refusal to offer binding guarantees against future withdrawal and demands for broader constraints beyond the nuclear file, including Iran’s missile program and regional activities.⁴

Iran’s nuclear trajectory was also shaped by Israeli covert operations, including cyberattacks and the assassination of Iranian nuclear scientists (such as Mohsen Fakhrizadeh in 2020). In response to these actions, Iran accelerated its uranium enrichment efforts at fortified underground facilities such as Fordow.⁵

The 2020 “Strategic Action Plan to Counter Sanctions” law, passed by the Iranian Parliament, mandated further reduce reductions in JCPOA compliance absent sanctions relief.⁶ With the election of Ebrahim Raisi in 2021, Iran adopted a harder line–, demanding full sanctions removal and verifiable guarantees as prerequisite to any return to the agreement.⁷

Iran’s post-2018 strategy has combined nuclear leverage escalation (to build negotiation pressure) with a strategic pivot toward non-Western partners such as China and Russia , reflected in its 2021 25‑year China partnership and the 2025-2045 20‑year cooperation agreement with Russia.

In terms of leveraging its nuclear program and according to the latest report from the International Atomic Energy Agency (IAEA), Iran held 274.8 kilograms of uranium enriched up to 60 percent by February 2025, marking an increase of 92.5 kilograms since the IAEA’s previous report in November.⁸ This amount, alongside its fleet of thousands of advanced centrifuges at Natanz and Fordow, and its full control over the nuclear fuel cycle,⁹ positions Tehran to produce enough fissile material for a nuclear bomb in as little as one week.

Following the 12-day war and the Israeli and U.S. strikes on Iranian nuclear facilities in mid-June, the IAEA has been pressing for renewed access to assess the status of the program and verify the integrity of the declared stockpile. In response, on June 25, Iran’s parliament (Majlis) approved a bill suspending cooperation with the IAEA. Under this new law, any further engagement with the agency now requires approval from Iran’s Supreme National Security Council.¹⁰ After President Masoud Pezeshkian officially communicated the legislation, IAEA inspectors immediately departed Iranian territory.¹¹

Tehran justified this decision by pointing to the latest report, authored by Director General Rafael Grossi, which had prompted a resolution against Iran at the agency’s Board of Governors. Iran argued that the resolution paved the way for Israel’s attack on its nuclear infrastructure.¹²

Notably, the IAEA has not issued any resolution condemning Israel or the U.S. for their strikes on Iran’s nuclear facilities, an omission Tehran sees as emboldening its adversaries.¹³ Iranian authorities also believe that renewed inspections of its nuclear sites after the U.S. and Israeli attacks would serve only to gather intelligence on the extent of the damage, with that information likely to be shared with Israel and the U.S.¹⁴

Iran’s Current Diplomatic Positioning

Following his return to office in January 2025, President Donald Trump publicly expressed interest in striking a new deal with Iran—framing diplomacy as a possible legacy-defining achievement. Yet, he also made clear that military action remained “on the table” should negotiations fail. This dual signaling has defined the U.S. posture throughout the renewed diplomatic track launched in April in Muscat, Oman.¹⁵

The credibility of military threats increased dramatically after Israel’s strikes on Iran’s strategic air defenses on 26 October 2024, and again with the unprecedented escalation in June 2025 that saw direct attacks on Iranian territory. These escalatory spirals reflect the growing inadequacy of traditional deterrence models in a context of unchecked opacity and deep strategic asymmetries.¹⁶

Meanwhile, Iran’s regional position has grown more precarious. With Hezbollah weakened in Lebanon, the Assad regime faltering in Syria, and Hamas’s infrastructure devastated in Gaza, the pillars of Tehran’s regional influence are under severe strain. Iran’s longstanding strategy of projecting power through allied non-state actors is encountering diminishing returns amid regional exhaustion with proxy conflict and an Israeli push to reshape the deterrence equation by force.

Against this backdrop, Iran’s motivations for engaging diplomatically are manifold. These include the deteriorating economic situation, the urgent need for sanctions relief, growing regional isolation, the erosion of its strategic depth, and the credible threat of snapback sanctions or direct military confrontation. Moreover, the “Look to the East” foreign policy has yielded underwhelming economic returns and failed to provide a reliable way to circumvent sanctions.¹⁷

From the U.S. perspective, Iran’s expanding enrichment capabilities and shrinking breakout time have heightened the sense of urgency. While hawkish voices within the Trump administration continue to press for military action, the prevailing view is that diplomacy remains the only viable path to contain Iran’s nuclear program without dragging the U.S. into another Middle East war. More broadly, there is concern that the absence of an agreement could prompt a shift in Iran’s nuclear doctrine, trigger a regional arms race, and divert attention from the United States’ strategic priority of countering China.

Yet sharp divisions remain within the Trump administration. On one side are Steve Witkoff, Trump’s Special Representative for the Middle East, and Vice President JD Vance, who favor a pragmatic deal that preserves face for both sides. Trump himself has shown flexibility in backchannel conversations.¹⁸

On the other side, hardliners like Secretary of State Marco Rubio and former National Security Advisor Mike Waltz insist on maximalist demands—including a full dismantlement of Iran’s nuclear infrastructure, ballistic missile curbs, and intrusive verification. According to this view, Iran’s nuclear disarmament must encompass all aspects of its program – including missiles, weaponization, and uranium enrichment. Initially invoking the “Libya model” of total disarmament,¹⁹ Rubio has since recalibrated, seeking to align himself with Trump’s stance, and now advocates the “UAE model” of zero domestic enrichment, where Iran would import all enriched uranium for civilian use.²⁰ While this shift marks a softening, it still clashes fundamentally with Iran’s insistence on sovereign fuel cycle capabilities.

Despite these tensions, the nuclear negotiations that started in Muscat on April 12, 2025 produced modest but tangible progress, with both sides assessing the talks positively. Negotiations moved from exploratory dialogue to technical discussions on enrichment caps, stockpile limits, and verification protocols.

After several rounds of talks, Iran and the U.S. were pursuing a political framework agreement that could serve as a platform for formal negotiations. The most contentious issue remains enrichment, with Tehran insisting on maintaining indigenous capabilities—a red line Washington continues to oppose.

Nonetheless, the structure of the Muscat process mirrors the backchannel path that led to the JCPOA a decade ago,²¹ offering a promising track to revisit and potentially deepen negotiations—provided all parties remain interested in doing so following the June escalation.

The Regional Chessboard: Gulf Arab Recalibration

Although historically opposed to the 2015 Joint Comprehensive Plan of Action (JCPOA), the Arab states of the Persian Gulf have emerged as cautious supporters of the renewed Iran–U.S. negotiations launched on April 12, 2025, in Muscat, Oman. A decade ago, Saudi Arabia dismissed the JCPOA as “weak,” and praised President Trump’s 2018 decision to withdraw from the agreement. Today, under Trump’s second term and amid escalating regional conflict, Riyadh’s tone has markedly shifted.

Following the first round of Muscat talks, the Saudi Ministry of Foreign Affairs issued a statement praising the Sultanate of Oman for hosting the negotiations and reiterated support for dialogue as a path toward resolving all regional and international conflicts. This statement was soon echoed by the UAE, Kuwait, Qatar, and Iraq—all of which expressed varying degrees of endorsement for the diplomatic process. ²²

This shift reflects a deeper political transformation embraced by the Arab states of the Persian Gulf since 2021. Their approach now emphasizes diplomatic autonomy and a reduction of tensions with Iran. Simultaneously, their strategy has increasingly favored hedging, diversifying and pluralizing their foreign policy.²³

Although not formal participants in the Muscat negotiations, the Gulf Cooperation Council (GCC) countries are increasingly present in adjacent roles: Oman as facilitator and host,²⁴ the United Arab Emirates as go-between (delivering President Donald Trump’s letter to Iran’s leadership),²⁵ and Saudi Arabia and Qatar as would-be mediators.²⁶

Tehran, in turn, has sought to avoid the alienation that characterized the JCPOA process. It has shared updates with GCC capitals and expressed support for Saudi and Emirati participation and ownership in a proposed nuclear fuel consortium—a concept floated by U.S. negotiators as part of confidence-building measures.²⁷

This consortium idea marks a potential turning point. While still speculative, it would embed regional actors in the civilian nuclear supply chain—an idea Iran has publicly endorsed, even as it demands to retain enrichment capabilities. For Saudi Arabia and the UAE, participation offers a way to anchor Iran’s program within cooperative frameworks rather than opposing it outright.

The prospect of trilateral cooperation among Iran, Saudi Arabia, and the UAE—each possessing nuclear infrastructure—could reshape the contours of regional nuclear diplomacy. Beyond fuel supply, the initiative could evolve into a platform for technical collaboration on nuclear safety, environmental resilience, and nonproliferation protocols. With rising water temperatures in the Persian Gulf and associated cooling challenges affecting nuclear power plants, shared risk management is not only feasible but necessary.²⁸

A regional nuclear safety framework, inspired by models such as the JCPOA and the Euratom Treaty, could also facilitate the integration of Iran’s and the GCC’s nuclear programs into broader technical cooperation initiatives. As such, it could help depoliticize nuclear governance and offer a constructive alternative to militarized posturing. Although such a vision remains distant given Israeli opacity and mutual distrust, its strategic logic is increasingly hard to ignore.

Key Lessons for Future Agreement

A central challenge in Iran-U.S. negotiations is defining the scope of any future agreement. President Trump’s February 4, 2025 memorandum reaffirmed his administration’s desire to prevent Iran from acquiring nuclear weapons—a goal Tehran has indicated it is still willing to negotiate under certain conditions.²⁹ However, the memorandum also widened the aperture of U.S. concerns to include Iran’s regional activities, missile program, human rights record, and alleged support for terrorism.³⁰

This expansive framing reflects a common critique of the 2015 JCPOA: that it addressed only Iran’s nuclear program, while ignoring broader threats. Yet as previous diplomatic failures and recent crises show, bundling too many issues into a single negotiation risks derailing progress altogether. Reaching consensus on Iran’s other threats would involve distinct actors, timelines, and verification challenges—a process that could delay even minimal de-escalation for years.

Accordingly, the comprehensive negotiations envisioned in Trump’s presidential memorandum would benefit from a sequenced, step-by-step approach. Nuclear constraints should be addressed first, laying the groundwork for more ambitious diplomacy on regional security and missile control. Iran’s regional policies, for example, could then be tackled through tools like regional coalitions or strengthened conventional forces.³¹ Such compartmentalization would help ensure technical and political feasibility.³²

Among the various issues in a comprehensive agreement—including missile programs and Iran’s regional policies—the nuclear file remains the most important and urgent.³³ Addressing it first would help prevent outcomes such as snapback sanctions, further strikes, or a broader regional arms race.

This was made especially clear during the Geneva track between Iran and the E3, which unfolded amidst the war and just prior to the U.S. attack on Iran’s nuclear facilities. Even then, Iran refused to engage in discussions about its missile program—though it had deemed regional issues negotiable alongside the nuclear matter.³⁴ On the other hand, the experience of the joint U.S.-Israeli military strike during the June war demonstrated that Iran’s nuclear program cannot be eliminated through military means. A continued militarized approach could seriously undermine the non-proliferation regime, as Iran’s suspension of cooperation with the IAEA might de facto lead to a complete cessation of collaboration (even without formal announcement). Thus, diplomacy and a focus on the nuclear issue must remain the priority in any negotiations with Iran. A balanced compromise must be struck between America’s maximalist demand of “zero enrichment” and Iran’s insistence on low-level enrichment for peaceful atomic energy use under enhanced IAEA safeguards.

Moreover, any new agreement will only stand a chance of success if it fairly and equitably serves the interests of both sides—a condition that would significantly increase its chances of being accepted in Tehran.³⁵ To be sustainable, such an agreement must also incorporate stronger guarantees. The JCPOA’s collapse—following the U.S. withdrawal and Iran’s subsequent rollback of commitments—highlighted the fragility of deals lacking enforcement and political safeguards. A new framework must therefore include credible protections against future withdrawal.

At the same time, despite its violations, Iran insists it did not formally breach the JCPOA and argues that if the E3 refrains from triggering the snapback mechanism, key restrictions (sunset clauses) will expire by October 2025. This reinforces the need for a longer-term, renewable structure with clear timelines and terms.

Finally, for the deal to be politically viable in Tehran, it must bring tangible economic benefits—chiefly through the lifting of major sanctions. Emphasizing shared interests, rather than focusing solely on resolving disputes, could further support momentum toward a sustainable accord.

The choice ahead is stark: either continue the pattern of overloaded, collapsible deals, or commit to a phased strategy that restores nuclear limits now, while leaving room for parallel or future negotiations on missiles and regional dynamics. The latter path, while less ambitious on paper, is far more likely to produce durable results.

Conclusion

Iran’s evolving nuclear strategy is shaped by hard-learned lessons from the JCPOA’s collapse—chief among them: technical compliance offers no shield when great power politics intervene. The Muscat talks are more than a return to bargaining over enrichment levels; they are a litmus test for whether asymmetric multilateralism—in which regional actors like China and Gulf states act as counterweights to U.S. dominance—can offer a path toward sustainable de-escalation.

Three potential trajectories emerge

1. Limited Deal: A narrowly scoped agreement that caps uranium enrichment and lifts select sanctions, deferring more contentious issues —missiles, regional activities—to later phases.

2. Snapback Crisis: The E3 triggers reimposed UN sanctions, leading Tehran to withdraw from the NPT, escalating tensions and undermining remaining nonproliferation norms.

3. Military Escalation: Further Israeli strikes on Iranian facilities trigger retaliation and regional conflict, accelerating rather than deterring proliferation.

Amid this high-stakes calculus, the most pragmatic path forward is one of segmented reciprocity: a first-phase nuclear accord that delivers real economic relief, followed in parallel by discussions on regional security architecture and missile controls. As highlighted in the broader SALAM memo series, decentering the West’s securitized framing and enabling inclusive diplomacy is essential for long-term stability.

The Gulf Arab states’ evolving approach—favoring regional de-escalation and resisting Israeli maximalism—signals a recognition that treating Iran as a permanent pariah invites perpetual instability. Recasting Iran not as a problem to be managed but as a stakeholder to be engaged may be the only way to avoid a devastating regional spiral. The window for such engagement is narrowing—but it is not yet closed.