Iran International
President Donald Trump has made one point clear: he is determined to prevent Iran from becoming a nuclear weapons power. However, he has yet to outline the specific conditions or steps he would require from Tehran to achieve that objective.
Will he demand a complete halt to uranium enrichment, or permit Iran to purify uranium to a low level, such as 3.65%? The JCPOA, signed during the Obama administration, set that exact limit.
Enrichment and centrifuges
Tehran is now rapidly enriching uranium to 60%, having accumulated 274.8 kilograms (605.8 pounds) of uranium enriched up to 60% as of February 26. That’s an increase of 92.5 kilograms (203.9 pounds) since the IAEA’s last report in November. The current stockpile can easily be sufficient for further enrichment to produce six nuclear bombs.
Iran maintains that it has the right to enrich uranium as part of its civilian nuclear ambitions. While 3.65% enrichment is used for peaceful energy purposes, 60% has no credible civilian application and is just one step short of weapons-grade enrichment at 90%.
A closely related issue is the number and type of enrichment machines—Iran’s centrifuges. Under the JCPOA, Iran was limited to 6,104 first-generation centrifuges, with no use of advanced models. Today, it operates more than 8,000 centrifuges, including more advanced IR-6 machines, which were explicitly banned under the deal.
Key questions remain unanswered: How many centrifuges, if any, would the US allow Iran to keep? Would decommissioned machines be permitted to stay in the country under international monitoring? Would Washington demand that most, if not all, be dismantled? Could it ask Iran to transfer them to a third country, such as Russia?
These questions are central to understanding what Trump’s plan might be for denying Iran a path to nuclear weapons. So far, no clear answers have emerged.
Is Trump’s plan a total nuclear ban or verification?
If talks resume and the US agrees to let Iran retain some enrichment capacity, a new agreement may not look so different from the JCPOA that Trump abandoned in 2018, calling it a “bad deal.” The key distinction, however, could lie in permanence: a new deal might cap Iran’s enrichment capabilities indefinitely, unlike the JCPOA’s temporary restrictions under sunset clauses.
Still, there is at least a political difference between a permanent ban on all enrichment and formally recognizing Iran’s right to enrich—however limited that right may be.
There is also the issue of somewhat differing statements coming from the President and some of his top officials. According to Axios, Trump’s letter to Ali Khamenei included a two-month deadline for reaching a new nuclear agreement and warned of consequences if Iran expanded its nuclear program. The letter was described by sources as “tough” in tone.
However, Trump’s Middle East envoy, Steve Witkoff, framed the message differently in an interview released Friday on The Tucker Carlson Show. Referring to the letter, he said: “It roughly said, I'm a president of peace. That's what I want. There's no reason for us to do this militarily. We should talk. We should clear up the misconceptions. We should create a verification program so that nobody worries about weaponization of your nuclear material.”
This tone stands in stark contrast to statements by the Secretary of State and the National Security Advisor, who have called for the dismantling of Iran’s nuclear program—not just verification.
Multilateral or bilateral talks?
The Obama administration, building on the approach of the Bush era, dealt with Iran in coordination with European allies while also involving Russia and China in the JCPOA negotiations. This multilateral strategy gave international legitimacy to the pressure on Tehran and, for a time, resulted in UN-imposed economic sanctions—until the 2015 agreement was signed and sanctions were subsequently lifted.
However, this approach also gave Iran some room to maneuver, as China and Russia provided support during the JCPOA negotiations. The temporary nature of the agreement and its allowance for Iran to retain its uranium enrichment capability may have stemmed from the fact that the US was not only negotiating with Tehran but also balancing the interests of Beijing and Moscow.
The question now is whether the Trump administration will face pressure to once again include Russia and China in any future talks—or whether it will insist on negotiating directly with Tehran, without outside involvement.
Iran held consultations with Russia and China earlier this month and would certainly prefer to have diplomatic backing in a multilateral setting.
Both Russia and China have signaled that any negotiations should focus solely on Iran’s nuclear program, excluding other US demands such as restrictions on ballistic missiles or curbing regional influence. Iran will almost certainly seek to involve both powers—especially Russia—believing that President Vladimir Putin may hold some sway with Trump.
Although bilateral talks may be preferable from the US perspective, the reality remains that if Washington seeks UN endorsement for any future agreement, it will need the backing of both Russia and China.
Another JCPOA?
Although the Trump administration has issued an ultimatum of “negotiations or else” to Tehran, it remains unclear whether it intends to impose strict demands for dismantling key elements of Iran’s nuclear program or enter into bargaining over critical issues such as the right to uranium enrichment, the level of enrichment, and the number and type of centrifuges.
In the latter case, and if Iran is able to salvage its right to enrichment, the resulting agreement will be somewhat similar to the 2015 JCPOA.
Meanwhile, the return of Donald Trump to the White House and the revival of the US administration’s maximum pressure policy have further tightened the noose on Iran’s economy.
While the Central Bank reported a year-on-year inflation rate of 45% last month, local media suggest that actual price increases are far higher. In reality, the cost of food, medicine, and other essential goods has nearly doubled.
Moreover, the fiscal year is ended with the US dollar surging to nearly 1 million Iranian rials, marking a 65% increase since the beginning of the past fiscal year. The depreciation of the rial has accelerated sharply in recent days.
At the same time, Central Bank data reveals that Iran’s foreign reserves have been rapidly depleting, plunging to just one-fourth of their level in March 2024 and a mere tenth of their March 2023 levels.
Iran’s foreign trade situation:
The latest figures from the Central Bank show that Iran's foreign exchange revenue crisis persisted in the first half of the current fiscal year, which began on March 20, 2024. No data has yet been released for the second half of the year.
During this period, Iran recorded a positive overall trade balance of $11.5 billion, including oil, goods, and services. However, the country also experienced capital flight totaling $12.5 billion.
As a result, the net balance of foreign currency inflows and outflows—including gold bullion—turned negative.
Given the sharp decline in Iran’s oil exports to China since September, the situation is expected to worsen—particularly as oil, petroleum products, and natural gas account for more than half of the country’s total exports.
Over the first 11 months, Iran has imported approximately 93 tons of gold bullion worth $7.3 billion in exchange for its oil and goods exports—three times the amount imported in the previous year. More than 55% of this gold was purchased from Turkey.
Indeed, around 13% of Iran’s total oil and non-oil exports have been bartered for gold instead of foreign currency. This highlights the government’s inability to collect payments for exported goods and oil and transfer foreign currency into the country, due to US banking sanctions. As a result, Iran is facing a severe shortage of foreign exchange reserves.
Government debt crisis
Recent data from the Central Bank shows that the Iranian government’s debt to the banking system has surged by 41% during the current fiscal year. To cover its widening budget deficit, the government has relied heavily on borrowing from domestic banks, tapping into the National Development Fund, and issuing bonds.
According to the International Monetary Fund (IMF), Iran’s total government debt now exceeds $120 billion—roughly one-third of the country’s economy. In contrast, Iran’s total external debt, including both governmental and non-governmental liabilities, stands at less than $10 billion—just 2% of GDP—underscoring the country’s extreme financial isolation and the reluctance of international institutions to fund Iranian projects.
Two decades ago, before the imposition of heavy sanctions, Iran’s external debt was more than 12% of GDP, largely driven by foreign investment in oil and gas projects. Today, the government’s increasing dependence on domestic borrowing has sharply boosted liquidity, further fueling inflation. Over the past year alone, liquidity in Iran has risen by 28%.
The economic crisis has pushed more Iranians into poverty. Official reports suggest that one-third of the population lives in extreme poverty. However, based on the World Bank’s global poverty standards, around 80% of Iranian households earn less than $600 per month and fall below the poverty line.
Energy and Water Crisis
For the first time, Iran has experienced electricity and gas shortages across all seasons. During peak summer demand in 2024, electricity shortages reached 20%, while winter gas shortfalls surged to 25%. Officials warn that energy shortages could worsen by at least 5% in the next fiscal year.
Industrial reports show that since summer 2024, energy disruptions have forced 30–40% of Iran’s industrial capacity to shut down. At the same time, the country has been grappling with growing gasoline and diesel shortages since 2023. Without new refinery projects, these fuel deficits are expected to escalate rapidly.
Meanwhile, Iran’s water crisis has reached a critical stage. Tehran’s main reservoirs are reportedly at just 7% capacity, and officials warn of severe water shortages by summer 2025.