Iran's decision to resume higher enrichment of uranium in 60 days if world powers fail to negotiate new terms for its 2015 nuclear deal will likely aggravate tensions with the United States and other global powers. In 2015, Iran and a group of world powers known as the P5+1— the US, the UK, France, China, Russia and Germany — struck a landmark deal to limit Tehran's nuclear program.

Iranian President Hassan Rouhani's domestic policies failed early in his tenure. His foreign initiatives, meanwhile, were met by strong opposition from Iran's supreme leader, Ayatollah Ali Khamenei, the Islamic Revolutionary Guard Corps (IRGC) and other hardline elements inside the country. Rouhani now either seems to not have a plan, or hopes to save the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), his sole achievement.

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However, Iran's announcement on Wednesday was a result of Washington's decision on May 3 to bar sales of Iranian enriched uranium and heavy water to other countries. Rouhani said that Iran would hold on to stockpiles of enriched uranium and heavy water used in its nuclear reactors.

Rouhani's announcement to roll back Iran's compliance with provisions of the nuclear accord will likely worsen already tense relations with the United States. Tehran also gave a 60-day deadline to the remaining parties of the agreement, saying that it would resume higher uranium enrichment if they failed to start delivering on their commitments to sanctions relief.

Undermining the deal

The JCPOA limits Iran's uranium enrichment to 3.67%, but Iran can keep a stockpile of no more than 300 kilograms of low-enriched uranium on its soil. Any enriched uranium in excess of this quantity has to be sent abroad. Until now, Iran was shipping it to Russia. Also under the 2015 deal, Iran can keep no more than 130 tons of heavy water, a coolant used in nuclear reactors. Iran has been sending the excess to Oman.

The US administration's move to halt the sanctions waivers on buying the enriched uranium and heavy water from Iran as part of Washington's "maximum pressure" campaign has left Iran's leaders with two options: either fully dropping the uranium enrichment, or continuing with enrichment and stockpiling the excess inside Iran, which means breaching the JCPOA.

Iran's move will erode the bargaining power of Germany, France and the UK vis-a-vis the US, and may lead to the US and the EU joining forces in resuming sanctions. It's therefore not just Iranian leaders, but also the US and the EU that are accountable for the current situation and the resumption of sanctions.

Despite US President Donald Trump's harsh comments on Iran and explicit criticism of the JCPOA, Trump has time and again shown signs of readiness to talk with Iranian officials. But the Islamic Republic has missed its chances of engaging in a dialogue with the Trump administration and is rejecting any talks. And this at a time when Iran's regional competitors, including Saudi Arabia and Israel, have been benefiting from the change in the balance of power in Washington since Trump came to power.

Shifting balance of power

The result of these developments would be a return to the era when Mahmoud Ahmadinejad was president of Iran — a time when hardliners like Saeed Jalili, Iran's previous top nuclear negotiator, were leading the international nuclear talks.

Meanwhile, Rouhani and Foreign Minister Mohammad Javad Zarif — who once claimed to be close to reformists — have shed their reputation as moderates in the Iranian political landscape. This development will strengthen the view within the Trump administration that there are no moderates within the Iranian regime. Some high-ranking US officials believe that there are only conservatives and ultra-conservatives in Iran.

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By issuing a 60-day-ultimatum, Rouhani hopes to reach a better agreement and pressure the Europeans to find a way for Iran to bypass US oil and banking embargoes. Iran has been struggling for six years to have the sanctions lifted; the country is now staring at the possibility of facing even more severe embargoes. It's also worried about a possible military confrontation.  

These developments come against the backdrop of Iran's regional and international policies, which are spearheaded by the supreme leader and the IRGC. These are policies that people like Rouhani, despite being opposed to, cannot intervene in.