The peace talks between the United States and Iran in Islamabad failed to deliver an agreement, with one key issue proving to be the main sticking point: Iran's nuclear program.

This week, US Vice President JD Vance said Washington's core demand is that Tehran commits "to not having a nuclear weapon."

Vance added that if the Islamic Republic agrees to Washington's terms, the US is "going to make Iran thrive" and that a deal with the Trump administration would make Iran "prosper and join the world economy."

Iran's nuclear ambitions have been the single largest obstacle to normalized relations with the West for over two decades, and were given as central factors behind the US-Israeli bombing campaigns this year and in the summer of 2025.

Iran's nuclear ambitions: unrealistic or dishonest?

In engineering economics, factors such as benefit-cost ratio (B/C Ratio), rate of return (ROR), payback period, value engineering, and similar metrics are major considerations. To determine whether a nuclear plant is economically viable, these factors must be evaluated to assess its cost-benefit justification. Iran's nuclear program is no exception.

Tehran's stated objective is power generation and energy security, not a nuclear weapon. The available data, however, suggests otherwise.

Iran has announced it plans to increase its nuclear electricity generation capacity to 20 gigawatts by 2041.

The Russia-built Bushehr power plant in southern Iran, which opened commercially in 2013, has a capacity of 1,000 megawatts and remains the country's only operational nuclear facility. It accounts for about 1% of Iran's overall electricity production, which is heavily reliant on natural gas and oil.

"Iran holds some of the world's largest natural gas and oil reserves, enabling electricity generation at costs significantly lower than nuclear power," Umud Shokri, energy strategist and Senior Visiting Fellow at George Mason University in the United States, told DW. "In practice, its electricity mix remains dominated by natural gas, while nuclear contributes only a small share from the single operating Bushehr reactor."

To compensate for the existing 25,000 megawatt shortfall in Iran's electricity grid, around 25 power plants similar to Bushehr would need to be built. The construction of Bushehr took around 20 years to complete.

'Economically irrational'

According to some estimates, the cost of completing the facility was approximately $5 billion (about €4.2 billion), which experts say is five times the initial projected cost.

Some estimates go even further, suggesting that without even accounting for the high costs of sanctions, and considering only the final cost and performance of the Bushehr plant, the project may have cost Iran up to 10 times its original estimate. The lack of access to independent, foreign observers makes it extremely difficult to ascertain the precise costs.

This relatively low level of electricity generation represents minimal benefit obtained at a very high cost. Iran's insistence that its uranium enrichment is for electricity generation has subjected the country to heavy sanctions, which amount to between two and three trillion dollars in direct economic losses, according to some estimates.

For civilian uses such as electricity generation, uranium only needs to be enriched to 3%-5%. According to the International Atomic Energy Agency (IAEA), Iran has developed stockpiles of uranium enriched to 60%. Enriched uranium at 90% is needed for nuclear weapons.

"Iran's nuclear program, when framed strictly as a civilian energy project, does not appear economically rational," Shokri said.

"The cost structure also diverges sharply from typical civilian nuclear programs. Bushehr-1 has faced decades of delays and cost overruns, with total construction costs estimated in the range of $8-11 billion, making it unusually expensive on a per-kilowatt basis," he added.

What's more, Iran has invested heavily in enrichment and fuel-cycle infrastructure, "which adds substantial expense but offers limited economic justification given its modest uranium resources and access to imported fuel," Shokri said.

Beyond the political and diplomatic disputes stemming from Iran's nuclear program, its insistence on domestic uranium enrichment makes little sense when viewed from an economic and cost-benefit perspective.

No legitimate civilian justification

In a joint statement in 2021 addressed to the Board of Governors of the IAEA, France, the United Kingdom and Germany said that Iran has no credible civilian justification for enriching uranium to 20% or 60%, and that producing enriched uranium at such levels is unprecedented for a country without a weapons program.

According to a 2013 report by the Carnegie Endowment for International Peace, Iran's uranium reserves are scarce. The IAEA says Iran does not rank even among the top 40 countries in terms of uranium reserves, and its known reserves are considered very limited compared to many other countries.

According to data published in 2011, Iran's proven uranium reserves amounted to only 700 tons, most of which fall into categories with high extraction costs.

Beyond the quantity, the quality of this uranium is also low, raising the technological costs required for extraction even further.

In other words, exploiting uranium from low-grade deposits is both costly and technically challenging. Some estimates suggest that Iran's known uranium reserves could, at best, supply fuel for the Bushehr power plant for only about nine years.

At the same time, extracting uranium from these mines requires millions of liters of fresh water per day. Considering that Iran's uranium mines are located in arid and semi-arid regions, this raises serious environmental concerns.

Iran's international isolation complicates matters further

The need to transition away from fossil fuels has seen many countries opt for nuclear energy as a relatively clean source.

Many countries, such as Belgium or Sweden, have determined that importing enriched uranium is more cost-effective than producing it domestically.

As a result, Belgium operates seven reactors that supply more than half of the country's electricity without any domestic uranium enrichment. Sweden also imports all the fuel required for its 10 reactors, which provide around 40% of its electricity.

"Successful civilian nuclear programs in countries such as France, South Korea, or the UAE rely on economies of scale, standardized reactor designs, and integrated global supply chains," Shokri said.

But Tehran's status as a pariah in many Western capitals means these avenues are not available to it.

"Iran's approach, marked by isolation, indigenous development and extended timelines, has significantly increased costs and reduced efficiency," Shokri explained.

Claims by Iranian officials who argue that nuclear power gives Iran more space to export gas and oil and to generate revenues are also highly questionable, Shorki says. "The scale of displacement remains modest relative to the program's overall cost. Lower-cost alternatives, including gas-fired generation and renewables, could deliver electricity more efficiently and with fewer financial and geopolitical risks," he said.

When evaluated purely on energy grounds, Tehran's nuclear program "does not align well with the cost-benefit logic of conventional civilian nuclear energy strategies and appears economically inefficient," Shokri said.

Edtied by: Karl Sexton