IntelBrief: Tensions with Iran Will Escalate in 2023

U.S. and allied policy toward Iran will grow even more hardline in 2023 as the various threats posed by Tehran have become more acute, particularly its alliance with Moscow.

Long-stalled negotiations to revive the 2015 multilateral Iran nuclear agreement are unlikely to resume, and Iran will advance its nuclear program closer to threshold nuclear weapons status.

The United States and its allies will continue to designate Iranian and Iran-facilitating third-country entities and persons for sanctions in 2023, but U.S. officials and outside experts are likely to express frustration that sanctions alone will not accomplish U.S. Iran policy objectives.

The potential for armed conflict will increase in 2023 as the United States and its regional and international allies grow progressively more alarmed over Iran’s nuclear advances and its support for Russia’s war effort.

Last year began with broad optimism for the course of U.S. relations with Iran as multilateral talks to restore full U.S. and Iranian adherence to the 2015 Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), appeared to make progress. The Trump administration abrogated the agreement in 2018. On at least two occasions in 2022, most recently in August, European officials claimed that a deal was imminent, and confidently predicted that Western tensions with Iran would ease. Yet, Tehran balked at the final compromises required for a deal, accusing the United States of unreasonable demands. With negotiations stalled since September, the Islamic Republic has intensified its enrichment of uranium to the point that proliferation experts assess Iran is weeks away from acquiring enough fissile material to produce a nuclear weapon. Iran’s late 2022 nuclear advances coincided with growing Western alarm over Tehran’s agreement to support Russia’s faltering Ukraine war effort, supplying Moscow with thousands of Iran-made armed drones and short-range ballistic missiles. The Iranian leadership’s burgeoning alignment with Moscow coincided with an escalating crackdown against protesters opposing the clerical regime’s repression – a female-led uprising sparked by the mid-September death of a young Kurdish woman while in custody for failing to comply with the regime’s laws requiring the full covering of her hair.

The accumulation of aggressive actions by Tehran has severely diminished any chance of reviving the JCPOA. On January 4, 2023, State Department spokesperson Ned Price said that the United States has not observed any change from the Iranian side to warrant a resumption of the JCPOA negotiations with Iran in Vienna. He added, confirming that U.S. policy toward Iran had shifted to a harder line, that: “Since September especially, our focus has been on standing up…for the fundamental freedoms of the Iranian people and countering Iran’s deepening military partnership with Russia and its support for Russia’s war in Ukraine.” U.S. President Joseph Biden and the U.S. Congress have soured on any lifting of JCPOA economic sanctions on Iran. There is broad support throughout the U.S. government for additional sanctions on Iranian human rights abusers and its drone and missile production infrastructure. Reflecting the perception that the JCPOA will not be revived, some members of the U.S. State Department’s JCPOA negotiating team have departed. U.S. officials have not declared the talks ended, apparently calculating – among other considerations – that Iranian leaders might use a collapse of the negotiations to advance to “threshold” nuclear status – a capability of quickly assembling a working nuclear weapon if the government decided to do so.

U.S. and allied options to dramatically change Iran’s behavior – its nuclear program, its alignment with Russia, its support for regional armed factions, or its domestic repression – appear limited. Since 2010, U.S. secondary sanctions – excluding from the U.S. financial system foreign companies that trade with sanctioned Iranian entities – have been progressively expanded and now target virtually every sector of Iran’s economy. Senior Iranian officials, commanders, and units of the Islamic Revolutionary Guard Corps (IRGC), other Iranian law enforcement entities, missile and drone facilities and supporting entities, oil trading firms, banks, and irregular financing networks have all been sanctioned by the United States and, in many cases, also by U.S. allies. Iranian banks are virtually shut out of the global financial system. In late December, U.S. officials signaled their intent to use additional sanctions to try to curtail Iran’s supply of drones to Russia. National Security Council spokesperson Adrienne Watson stated: “We are looking at ways to target Iranian [unmanned aerial vehicle] production through sanctions, export controls, and talking to private companies whose parts have been used in the production. We are assessing further steps we can take regarding export controls to restrict Iran’s access to technologies used in drones.” U.S. and allied sanctions have damaged Iran’s economy but have fallen short of causing Iranian leaders to accept the compromises needed to restore the JCPOA, reduce or end sales of military equipment to Russia, or cease its attacks, arrests, and executions of domestic protesters. The United States and its allies will continue to designate Iranian and Iran-facilitating third-country entities and persons for sanctions in 2023, but U.S. officials and outside experts are likely to express frustration that sanctions alone will not accomplish U.S. Iran policy objectives.

A key question is whether the United States or its allies judge that military options are necessary to address the variety of threats Iran poses. As Iran’s nuclear program advances, the potential for the hardline Israeli government of Binyamin Netanyahu to undertake strategic air strikes against Iran’s nuclear infrastructure will increase. Overt Israeli military action against Iran’s nuclear facilities in 2023 cannot be ruled out – with or without U.S. approval – if Iran enriches uranium to weapons-grade levels (90% purity). In the current context, the possibility of new U.S. military action against Iranian forces and assets is also increasing. On January 4, U.S. State Department Spokesperson Ned Price acknowledged that the United States and Israel have discussed possible efforts to interdict “the proliferation of Iranian [armed drone] technology to countries around the world, including to Russia.” U.S. military efforts against Iran are not unprecedented: over the past eight years, U.S. forces have been intercepting Iranian arms shipments to the Houthi movement in Yemen. Over the past decade, the U.S. military has consistently retaliated for attacks on U.S. forces by Iran-backed militia forces in Iraq and Syria. Over the past two decades, U.S. naval elements have, on numerous occasions, fired warning shots at IRGC naval units that made threatening approaches in the Persian Gulf. Still, to date – even at times of heightened tensions – the United States has not conducted strikes on missile, drone, nuclear, or military facilities inside Iran. Nevertheless, U.S. officials have always maintained that “all options are on the table” in response to Iranian nuclear developments or other perceived Iranian threats.

Some experts and former U.S. officials argue that only the outright replacement of Iran’s regime will adequately address the many threats posed by the Islamic regime. U.S. officials have provided public support for Iran’s demonstrators in the ongoing uprising, while acknowledging that the United States has little leverage with which to help force the current government out of power. In 2023, the United States and its allies appear to be hoping for – but not expecting – a change in Iran’s regime, while planning for a range of escalatory economic and military steps in an effort to blunt the growing array of threats posed by Iran.

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