Is Iran's nuclear showdown near a breaking point?

As European powers set in motion a process to reinstate UN sanctions, Tehran could respond with radical measures, including a withdrawal from the NPT

Buildings of the International Atomic Energy Agency’s headquarters are reflected in doors featuring the agency’s logo in Vienna, Austria, on 13 June 2025 (Joe Klamar/AFP)

Off

After months of deadlock, Britain, France and Germany (known as the E3) have pulled the trigger on the snapback mechanism that sets in motion the return of UN sanctions on Iran over its nuclear programme.

In their formal notification to the UN Security Council on Thursday, the three European powers stressed that they sought a “diplomatic solution”, adding: “The E3 will fully make use of the 30-day period following the notification in order to resolve the issue giving rise to the notification.”

The snapback procedure, enshrined in the 2015 Iran nuclear deal and UN Security Council Resolution 2231, is triggered when one or more deal participants formally notify the Security Council of Iran’s “significant non-performance” of its obligations.

If the dispute cannot be resolved within 30 days, the procedure advances, ultimately reinstating UN sanctions on arms, missiles, shipping, and Iranian officials and entities, through a veto-proof mechanism.

During recent talks with Iranian officials, the E3 demanded three conditions to avoid triggering snapback. These included Tehran resuming negotiations with the United States; granting the International Atomic Energy Agency (IAEA) renewed access to its nuclear facilities, which had been completely halted following the 12-day Israeli-American war; and providing a full accounting of the more than 400kg of 60 percent enriched uranium reported by the IAEA.

Each of the sanctions poses its own challenges for the Iranian government, but a close analysis identifies three as particularly consequential: a ban on new investment in Iran’s oil and gas sector, sweeping sanctions on the Islamic Revolutionary Guard Corps (IRGC), and the reinstatement of Resolution 1696, which mandates a complete halt to uranium enrichment - the central issue underpinning the standoff between Iran and the West, led by the US.

Economic and political costs

Iran’s oil and gas sector - its economic lifeline - is in decline: output is falling, technology is outdated, and domestic demand is climbing. The South Pars field, for example, which supplies about two-thirds (64 percent) of Iran’s thermal power plants, is losing pressure, fuelling the current electricity crisis.

The oil minister says $19bn a year is needed for the next four years, funding that only Russia and China are able and perhaps willing to provide, as others avoid US sanctions. Yet while US sanctions may not stop them, revived UN sanctions could, since both countries backed the original sanction resolutions and, as permanent members, are unlikely to openly defy the Security Council.

Sanctioning the IRGC presents another acute vulnerability. Economically, the IRGC and its network dominate large sectors of Iran’s economy through hundreds of affiliated companies. Comprehensive sanctions on the IRGC could effectively amount to sanctions on Iran’s economy as a whole, since nearly any transaction risks being tied to the organisation.

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Even China, which buys 90 percent of Iran’s oil, may scale back or suspend purchases, as the IRGC controls roughly 50 percent of Iran’s oil trade, according to Reuters.

The economic consequences would be severe, including soaring inflation, shrinking hard currency reserves and a further depreciation of the rial, which has accelerated over the past two days. Households would face higher living costs, potentially triggering unrest, which could in turn amplify inflationary expectations and further weaken the rial, deepening the country’s structural crisis.

The political costs could be even greater. Renewed UN sanctions targeting the IRGC could isolate it internationally, paving the way for its designation as a terrorist organisation by the EU and other states - a scenario Iran has long fought to avoid. For a system whose survival depends on the IRGC, this could be existential.

Perhaps the most damaging effect would be the revival of Resolution 1696. Adopted in July 2006, it requires Iran to suspend all uranium enrichment and reprocessing, including research and development, subject to IAEA verification. For decades, Tehran has argued that enrichment is its right under the Non-Proliferation Treaty (NPT); but Resolution 1696, supported also by Russia and China, explicitly obligates Iran to halt enrichment entirely.

Such a ban would shatter Iran’s strategic ambitions, for which the government has endured one of the harshest sanctions regimes in history, with economic losses estimated at $1.2 trillion just between 2011 and 2023. Tehran’s insistence on maintaining enrichment imposed severe economic strain on low-income populations, fuelled domestic protests, and might have been a key factor behind US military action against Iran.

A snapback would therefore not only devastate Iran’s economy, but also undermine the core political and ideological pillar of its nuclear programme.

Potential for dangerous escalation

While Iran’s foreign ministry has categorically rejected the move, stating that “the three European countries have no legal or moral authority to resort to the so-called snapback mechanism”, Iran has - though not officially yet - recently signalled it could respond with two radical measures: withdrawing from the NPT and ceasing cooperation with the IAEA.

This week, Deputy Foreign Minister Kazem Gharibabadi warned: “If such an action [activation of the snapback] takes place, Iran’s engagement with the International Atomic Energy Agency will be completely affected and come to a halt.”

A more extreme threat would be Iran’s withdrawal from the NPT. A group of Iranian MPs are reportedly drafting an “urgent bill” for withdrawing from the treaty, a scenario repeatedly raised by hardliners such as IRGC Brigadier-General Esmail Kowsari, a key member of parliament’s defence and national security committee.

If this time Israel were to launch an assault aimed at toppling Iran's government, Tehran's response would almost certainly be maximal

Analysts broadly agree that an Iranian withdrawal from the NPT and/or termination of cooperation with the IAEA, which in practical terms would lead to the concealment of Iran’s nuclear programme, would unleash a regional nuclear and arms race, with Turkey and Saudi Arabia the most likely entrants. More gravely, it would almost certainly set the stage for a devastating Israeli strike on Iran, far harsher than previous attacks, and risk pulling the US directly into war.

If this time Israel were to launch an assault aimed at toppling Iran’s government, Tehran’s response would almost certainly be maximal.

This could include direct strikes on US bases, alongside efforts to render the Strait of Hormuz insecure or impassable, thereby cutting off the flow of around 20 million barrels of oil from the world’s daily consumption of approximately 100 million barrels. Such a scenario would escalate the conflict to an entirely new and far more dangerous level.

To avoid the potentially catastrophic consequences of activating this process, particularly the risk of an apocalyptic war, the Iranian government has no choice but to abandon uranium enrichment. This lies at the heart of today’s crisis, without which no agreement can be reached.

Could the approach proposed by the former director of Iran’s foreign ministry, Qasem Mohebali, offer a path forward? He says: “The only solution is for Iran’s right to enrichment to be recognised - but for a [potentially lengthy] period agreed upon by all parties [namely the Europeans, the US and Iran], Iran should refrain from exercising that right.”

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.

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