Donald Trump has said that Iran cannot have nuclear weapons but should reach a “verified nuclear peace agreement”, which the US should begin working on immediately.
In a post on his Truth Social platform on Wednesday, Trump said reports that the US and Israel were preparing to “blow Iran into smithereens” were “greatly exaggerated”.
“I would much prefer a Verified Nuclear Peace Agreement, which will let Iran peacefully grow and prosper. We should start working on it immediately, and have a big Middle East Celebration when it is signed and completed. God Bless the Middle East!”
In an executive order on Tuesday, Trump signalled a return to the “maximum pressure” sanctions policy that he adopted during his first administration after withdrawing the US from the Iran nuclear deal in 2018.
The order promised a “robust and continual campaign” by the US Treasury and other agencies to “drive Iran’s export of oil to zero, including exports of Iranian crude to the People’s Republic of China”.
Iran insists its nuclear programme is for peaceful civilian purposes, but it is enriching uranium close to weapons-grade levels.
On Wednesday, Iran’s foreign minister Abbas Araghchi said the “maximum pressure” sanctions policy would fail “again”, while also signalling Tehran’s willingness to discuss its nuclear programme.
“Maximum pressure is a failed experience, and trying it again will only lead to another failure,” Araghchi told reporters. “But if the main concern is ensuring that Iran does not seek nuclear weapons, this can be achieved — it is not a problem.”
He was responding to Trump’s assertion that Iran’s nuclear programme and support for paramilitary groups across the Middle East threatened US interests. Trump said it was “in the national interest to impose maximum pressure on the Iranian regime to end its nuclear threat, curtail its ballistic missile programme and stop its support for terrorist groups”.
Among other actions, the US would “modify or rescind” any existing sanctions waivers that provided Iran with economic relief, including those related to the Chabahar port project, the order said, without providing details.
India’s state-backed port company has operated Chabahar, close to Iran’s border with Pakistan, since 2018 and signed a long-term deal with Tehran last year to further develop the site.
The US has sought to limit Iran’s oil revenue for decades but has never been able to completely throttle exports. During Trump’s first administration, US sanctions helped drive Iranian oil exports down from almost 3mn barrels a day in 2018 to an estimated low of about 420,000 b/d in December 2019.
Iranian oil shipments have gradually increased since, reaching a high in November of almost 1.8mn b/d, of which 1.7mn b/d went to China, according to tanker-tracking data.
Those shipments are carried on a so-called “shadow fleet” of oil tankers that has grown rapidly in recent years and seeks to operate beyond the reach of US restrictions by eschewing western banking and insurance services.
Trump’s predecessor Joe Biden was accused by Iran hawks in Washington of softening sanctions enforcement to allow more Iranian crude on the world market, amid concerns over soaring oil prices following Russia’s full-scale invasion of Ukraine.
In a sign that oil traders doubt Trump would be able completely block Iranian exports, Brent crude, the global benchmark, was down 1 per cent on Wednesday morning.
“We don’t think he can drive exports to zero but he can definitely reduce it from the 1.8mn b/d peak we saw,” said Amrita Sen, director of research at Energy Aspects, a consultancy.
Sen said she expected Iran to become a “negotiating tool” in discussions between China and the US on tariffs, adding that Beijing might finally be willing to accept lower imports from Iran, given its desire to modernise Chinese oil refining by putting pressure on independent refineries, known as “teapots”, which take most of the Iranian crude. “The market usually dismisses sanctions, saying China won’t comply but there are incentives this time,” she said.
The Chinese government is seeking to improve efficiency in its refining sector by shutting down older and smaller plants amid a drop in refining margins after domestic fuel demand peaked last year.
If Trump tries to include restrictions on Iran’s ballistic missile programme — as well as on its nuclear programme — in his proposed agreement, Iranian analysts said Tehran would be unlikely to accept.
The Islamic republic considers its missile programme its primary deterrent, given that US sanctions have prevented it from developing a conventional air defence system or purchasing fighter jets since the 1979 revolution.
“Iran is ready to negotiate, but it is also prepared to resist Trump if necessary,” said political analyst Saeed Laylaz.
Additional reporting by Jonathan Wheatley in London