The economic and strategic implications of this shift are profound. The initial nuclear agreement left significant gaps, notably ignoring Iran’s ballistic missile program, its regional influence, and its support for armed groups. These omissions fueled opposition from both Washington and Israel, leading to a cycle of escalation that included the January 2020 drone strike killing Qasem Soleimani, commander of the IRGC’s Quds Force, and Iran’s subsequent missile retaliation against US bases in Iraq. While efforts to revive the deal under President Joe Biden in 2021 stalled, the geopolitical landscape further deteriorated with the October 2023 Gaza war, which drew Iran-backed groups into confrontations across Lebanon, Iraq, and Yemen, and led to direct Israeli-Iranian exchanges in 2024.
By the time the US and Israel moved to strike nuclear sites in mid-2025, the diplomatic framework was already strained. The February 2026 offensive expanded the target list beyond military and nuclear installations to include industrial and logistical infrastructure. This escalation has rendered the US-Iran Islamabad Memorandum of Understanding (MoU) effectively dead, as formal negotiations are no longer on the horizon. The immediate consequence is a severe disruption to the mechanisms that once kept Iran’s nuclear activities under international scrutiny. The strikes impaired the International Atomic Energy Agency’s (IAEA) ability to monitor compliance with the Nuclear Non-Proliferation Treaty, creating a vacuum in verification that persists as the conflict drags on.
Amidst the hostilities, Iran has demonstrated its capacity to sustain its economy and military logistics despite a US naval blockade. Reports indicate that the regime has utilized Russian vessels crossing the Caspian Sea, truck convoys from Central Asia, and cargo aircraft from China to circumvent restrictions. This logistical resilience highlights the limitations of economic coercion when alternative supply chains are established, further complicating the US strategy of applying “maximum pressure.” Meanwhile, the US designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organisation in April 2019 has not prevented Tehran from maintaining its network of allied armed groups, which continues to project power across the region without engaging in direct, sustained confrontation with US forces.
The future of nuclear diplomacy now faces a landscape of shattered trust and diminished leverage. Analysts note that any future progress will likely compare unfavorably to the 2015 JCPOA. The issues at stake are more complex and intertwined, with the Strait of Hormuz taking precedence due to its impact on the global economy and freedom of navigation. Under the ill-fated Islamabad MoU, Iran was only bound to refrain from imposing formal passage requirements for 60 days, a constraint that is now moot. Negotiations are expected to be torturous and prolonged, driven by Iran’s internal political dynamics and a regime that feels empowered by the war’s outcome. Iranian decision-makers are insisting on uncompromising positions and demanding large upfront payoffs, while US military threats have grown increasingly hollow.
Furthermore, the contours of a newly announced US-Saudi nuclear deal are making Iranian compromises on enrichment even less likely. Tehran is currently dragging its feet on re-engaging the IAEA for comprehensive on-site monitoring, facilitating access only to the least critical facilities. More alarmingly, Iran has begun salvaging and rebuilding damaged assets and is moving significant nuclear materials to the hard-to-destroy Pickaxe Mountain facility. These actions signal that the semblance of nuclear stability prevailing since June 2025 is unraveling. The US now faces the critical challenge of preventing a nuclear slippery slope without diverting attention from the strategic focus on Hormuz or resorting to further full-scale military operations. The result is a long-term impasse where the Iranian nuclear file remains unsettled, posing cascading strategic effects for the global order.
One Comment