Obama’s challenge, Iran’s nuclear plans

As Barack Obama prepares to start his second presidential term next month, one foreign policy issue looms larger than most. His challenge is to craft a deal with Iran that can finally lay to rest the world’s fears that Tehran is driving forward with its nuclear programme in order to build a bomb.

In the next few months, the crisis in Syria – and the risk that the country’s civil war will end in the triumph of jihadism – will command the headlines. But on Syria, Mr Obama has chosen to be a spectator. On the Iranian nuclear programme, the US is still de facto the lead negotiator. While Tehran remains the source of the problem, the Obama administration must decide what tactics and strategy to employ in order to ensure that this decade-long diplomatic tussle ends without the resort to war.

As we survey the prospects for a diplomatic deal in 2013, the circumstances are more favourable than for some time. Iran is pressing ahead with its nuclear programme. But it is not doing so at a speed or intensity that suggest it could be ready to test a nuclear device for at least another 12 months.

Israel, for all its bluster last year about launching a pre-emptive strike on Iran’s nuclear facilities, seems to be starting 2013 in a more restrained mood. Israeli military leaders made clear to prime minister Benjamin Netanyahu last year that they are reluctant to mount air strikes on Iran. The US gave powerful support to Israel during the recent crisis over Gaza. Israelis may now be more confident that President Obama will provide them with firm military backing if Iran really does look like racing for the bomb later on in his presidency. The chances of a pre-emptive Israeli strike on Iran in 2013 therefore look slim.

So what are the chances of a successful end to negotiations this year? All sides have good reasons to want an accord. The Iranian regime is desperately feeling the burden of US and EU sanctions. Iran’s oil exports have dived. The value of the rial has plunged. Iran is suffering rampant inflation. It therefore needs a loosening of the sanctions grip.

Mr Obama has made clear he does not want America engulfed in another middle eastern war if he can avoid it. With the presidential election now over, he can afford to reach out to Iran more directly – and in a way that was not possible in the run-up to the US election.

The outlines of a deal are clear to most analysts. Iran should cease the production of more highly enriched uranium. It should convert its existing stockpile of that uranium to reactor fuel that cannot be used for a bomb. It should dismantle the centrifuges at its highly protected enrichment site at Fordow.

In return for such moves, the west should offer Iran more than was on the table at its three meetings last year. The west should commit to reversing some aspects of the oil embargo imposed by the European Union as well as some US and EU banking sanctions. There should be a promise of more concessions if Iran takes further confidence-building steps.

Yet there are two issues which must now concentrate American and Iranian minds. First, the Iranian presidential election in June introduces an unpredictable element, especially if the opposition organises effectively. A disputed result could easily reignite the public unrest which marked the last election in 2009. Second, while Iran may not be able to test a device this year, it will get very close to that capability in 2014. The US and Israel could not possibly live with such a threat.

Iran watchers have often started the new year arguing that Washington and Tehran are in the last- chance saloon. Thus far, those predictions have proved wrong. But this time the alarm really is sounding. If 2014 is not to be the year of conflict, then 2013 offers a diplomatic opening for Iran and the US.

Copyright The Financial Times Limited 2012.