The Limits of a U.S.–Iran Deal

Iran and the United States are engaged in intense negotiations to resolve the deadlock around Iran’s nuclear and ballistic missile programs, as well as its support for what remains of the so-called “Axis of Resistance.” The diplomatic opening is narrow and fragile, shaped by deep mistrust and competing priorities. The United States aims to leverage Iran’s current vulnerabilities—a battered economy, domestic instability, and recent military defeats—to obtain substantial concessions on several fronts. Iran, for its part, seeks relief from crippling sanctions while insisting that its national sovereignty be respected and that its capacity to intervene across the region be preserved.

At the heart of the negotiations is Iran’s nuclear program. The 2015 Joint Comprehensive Plan of Action (JCPOA), which placed strict limits on Iran’s nuclear activities in exchange for partial sanctions relief, has been defunct since 2018, when U.S. President Donald Trump withdrew Washington from the agreement. In his second term, Trump has continuously demanded a more comprehensive deal.

Still, if Washington’s objective is more limited—preventing Iran from advancing its nuclear program or acquiring a nuclear weapon—a narrower agreement may be within reach. Iranian officials have hinted that they would consider capping uranium enrichment at civilian-grade levels or transferring their stockpile of highly enriched uranium to international custody in exchange for significant sanctions relief. Such measures would roll back Iran’s nuclear timeline and restore a degree of transparency without forcing Iran to abandon uranium enrichment. Even so, a limited nuclear understanding will be difficult to implement. Iran’s nuclear capacity expanded significantly after the JCPOA’s collapse, with enrichment jumping to 60 percent purity, and stockpiles of enriched uranium growing far beyond previous limits.

A Weakened Iran

As negotiations continue, the United States has carried out a massive naval military buildup along Iran’s southern borders. The negotiations appear to be entering a decisive moment with significant implications for the broader Middle East. Much of this hinges on whether Washington and Tehran can compromise over U.S. demands: Iran’s complete abandonment of uranium enrichment; a significant, if not complete, reduction in its ballistic missile capabilities; and a cessation of financial and military assistance to the remaining members of the Axis of Resistance.

For decades, these three components have been the cornerstone of Iran’s regional power projection. Since the outbreak of the war in Gaza in 2023, Tehran has suffered significant setbacks. Hezbollah and Hamas have been decimated, Bashar Al-Assad’s regime in Syria has fallen, and Iran’s aerial defense systems and nuclear facilities have either been obliterated or sustained paralyzing damage. Of Iran’s core capabilities, only its ballistic missile program remains largely intact.

The Proxy Dilemma

Iran’s regional influence is largely projected through allied militias and terrorist organizations, including Hezbollah in Lebanon, Shi’ite militias in Iraq, the Houthis in Yemen, and factions such as Hamas and the Palestinian Islamic Jihad in Gaza. Washington argues that any lasting deal must address Iran’s support for these proxies, not just its nuclear program. Tehran, however, publicly refuses to abandon what it calls its “resistance” allies, viewing them as central to its defense strategy and theocratic revolutionary ideology.

U.S. officials believe Iran’s current vulnerability could prompt a temporary reduction in some proxy activity to avoid further external pressure. Any understanding would likely be informal and tenuous. Iran will not openly renounce its ties to proxies such as Hezbollah or the Houthis, and verifying a true reduction in support would be extremely difficult. The proxy issue therefore remains difficult to resolve, as it is central to Iran’s security doctrine and because U.S. partners such as Israel and Saudi Arabia view these groups as dire threats—limiting Washington’s room for compromise.

Any U.S.-Iran accord would carry significant regional consequences. America’s allies—from Israel to the Gulf states—have been closely involved in the crisis and its possible resolution. Israel, in particular, looms large. Prime Minister Benjamin Netanyahu’s government has been the most vocal about the Iranian threat, and, last year, launched multiple aerial military campaigns on Iran. Tehran responded with missile strikes on Israeli targets, leading to a brief but intense 12-day war that inflicted damage on both sides. While Israel severely degraded Iran’s air defenses and missile arsenal, Iran’s strikes underscored the vulnerability of Israeli cities.

In the run-up to the current talks, Israeli officials have pressed Washington to maintain a hard line, insisting that any deal be stringent and comprehensive—or that the United States be prepared to take military action if diplomacy fails. At the same time, some in Israel worry that Washington might prioritize its own strategic interests over Israeli preferences. The Trump administration, while strongly pro-Israel, has at times diverged from Tel Aviv’s approach. U.S. pressure helped halt Israel’s extended offensive in Gaza late last year and brought Turkey and Qatar into Gaza’s post-war arrangements—moves Israel opposed. Israeli leaders fear that a Washington eager to avoid another war might accept a deal that leaves Iran’s political system intact.

The Regional Stakes

For the Gulf states, the overwhelming priority has been to avert war and ensure their interests are reflected in the negotiations. Oman, the host of the negotiations, has long served as a neutral mediator between Iran and the United States. Others, such as Qatar, Saudi Arabia, and the UAE have also engaged quietly, whether through backchannel diplomacy or discussions over the broader framework of a potential agreement. Their overriding fear is that a U.S.-Iran conflict could escalate into a wider regional war that would inevitably draw them in. Despite hosting U.S. military bases, the Gulf states are acutely aware that they remain vulnerable to Iranian missile capabilities. Qatar and the UAE have urged de-escalation and offered to facilitate dialogue, while Saudi Arabia has pressed for a diplomatic outcome that restrains Iran’s nuclear program and regional meddling without resorting to open conflict.

These states want Tehran’s ambitions checked, but not via a catastrophic war or the destabilization of the Iranian state. They prefer a contained, deterred Iran over one in disarray. There is also another strategic calculation at play: a seriously weakened Iran would irreversibly tilt the regional balance of power in Israel’s favor. Israel is feared not only for its military prowess but also its lack of hesitancy when it comes to respecting international borders and territorial integrity. Israel’s aerial assault on Qatar in 2025 remains a stark reminder of the challenges and risks the Gulf states face. A similar perspective prevails in Turkey, where Ankara’s growing influence in Syria has prompted Israeli military efforts to counter Turkish influence.

Beyond regional security, fluctuating U.S.-Iran tensions have immediate global economic consequences. Roughly one-fifth of the world’s oil flows through the Strait of Hormuz, leaving global markets highly sensitive to the risk of conflict. This fragility was highlighted when Tehran announced a temporary closure of the Strait amid, signaling its willingness to use the waterway as leverage if talks fail to produce terms Iran deems acceptable. Fears of war have repeatedly driven oil prices upward, while news of diplomatic engagements has brought them back down. Both Washington and Tehran understand this dynamic. Trump wants to avoid an oil price spike that could hurt the U.S. economy, while Iran has implicitly threatened Gulf oil supplies as leverage. Iranian forces have harassed ships in the Gulf to signal how quickly a conflict could disrupt fuel shipments worldwide. If a deal is reached, it may allow some Iranian oil back onto the market, easing both Tehran’s financial stress and global prices. If talks collapse, however, a confrontation will cause a major oil shock.

The ongoing negotiations therefore represent an opportunity to shift the trajectory of the U.S.-Iran conflict. A comprehensive resolution remains unlikely. A more plausible outcome is a limited accord that reduces immediate dangers, such as freezing Iran’s nuclear program in exchange for partial sanctions relief. This arrangement would buy time and lower tensions, but fundamental differences over Iran’s ballistic missile program and its ties to the Axis of Resistance would almost certainly reemerge, given the absence of any realistic mechanisms to resolve them.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.