Trump wanted an Iran deal fast. Now he may get military confrontation
DUBAI, United Arab Emirates — Oil prices spiked overnight on geopolitical concerns, as U.S. President Donald Trump struck a sharply more negative tone over the progress of nuclear talks with Iran and announced the withdrawal of some American personnel from the Middle East.
"They [U.S. military personnel] are being moved out because it could be a dangerous place and we will see what happens... We have given notice to move out," he told reporters on Wednesday.
The Pentagon has ordered the withdrawal of troops and non-essential staff from embassies in Baghdad, Kuwait and Bahrain.
Speaking on a podcast with the New York Post, Trump accused Tehran of "delaying", calling it a "shame."
"I'm less confident now than I would have been a couple of months ago. Something happened to them," he said of Iranian representatives.
The president earlier warned that the U.S. or Israel could carry out airstrikes targeting Iranian nuclear facilities if negotiations failed. He added that his administration would not allow Iran to have a nuclear weapon.
In response, Iran's defense minister expressed hope for the talks, but warned of military retaliation if things were to go south.
"It won't come to that, and the talks will yield results. But if they don't, and the conflict is imposed upon us, the enemy's losses will undoubtedly be greater than ours," the minister told Iranian press. "In that case, America will have to leave the region, because all of its bases are within our reach. We have access to them, and without hesitation, we will target all of them in the host countries."
On Thursday, the IAEA Board of Governors — the UN's nuclear watchdog — passed a resolution declaring Iran in non-compliance with its nuclear safeguards obligations for the first time in nearly 20 years.
The developments mark a stark shift after several rounds of mostly indirect U.S.-Iran talks that were previously described as "positive" and "respectful." Tehran has accused Washington of not being serious in its engagement and not respecting Iran's right to enrich uranium for what it insists are peaceful purposes.
As it stands, U.S. Middle East envoy Steve Witkoff is set to meet with Iranian Foreign Minister Abbas Araghchi in Oman on Sunday for further discussions.
Both the Trump administration and Iran say they want a deal. For Trump, this would deliver a political and diplomatic win that the previous Biden administration failed to achieve. For Iran, it would mean desperately needed relief from sanctions that have crippled its economy.
The number one hold up? Domestic uranium enrichment in Iran, which can be used to generate nuclear energy for peaceful purposes — or build a bomb.
After initially showing flexibility on Iran being able to enrich uranium at lower levels for nuclear power generation, Trump has changed his tune, saying anything beyond zero enrichment in the country is unacceptable.
That's a hard deal-breaker for Tehran, which demands its right to a civilian nuclear energy program. Iran maintains that right under the Nuclear Non-Proliferation Treaty (NPT), which it joined in 1970, and which allows non-nuclear weapon states to build peaceful nuclear energy programs.
But concerns abound over Iran's actual intentions. Under the 2015 Obama-era Iranian nuclear deal, formally called the Joint Comprehensive Plan of Action (JCPOA), Iran committed to capping levels of 3.67% enriched uranium at 300 kilograms — enough to sustain a civilian nuclear power program.
But Iran's uranium enrichment has reached 60% purity, according to the IAEA — a dramatically higher level that is a short technical step from the weapons-grade purity level of 90%.
"A country enriching at 60% is a very serious thing. Only countries making bombs are reaching this level," IAEA chief Rafael Grossi said in 2021.
So what happens next, and how high is the risk of a military conflict between the U.S or Israel, and Iran, a country of 93 million people that is nearly four times the size of Iraq?
Israel appears ready to attack Iran, according to reports citing U.S. and European officials. Israeli Prime Minister Benjamin Netanyahu has pressed Trump to allow strikes, while the American president said in late May that he had warned Netanyahu against attacking Iran, while negotiations with Washington were under way.
Tensions have escalated since then. Multiple analysts speaking to CNBC say a military confrontation is still likely to be averted — for now. Some suggest that the recent partial evacuation orders are part of the choreography of pressure ahead of the upcoming U.S.-Iran talks.
Despite Trump publicly saying any Iranian domestic enrichment at all represents a red line, a number of options have been floated that would provide a sort of "compromise" for Tehran.
Those include the U.S. proposal that Iran join a regional nuclear consortium that would allow it to continue enriching uranium at low levels while committing to zero enrichment at some point in the future, and that would see it mothball — but not dismantle — its nuclear facilities.
But the U.S. proposal "is more a series of ideas than a concrete plan, and for the moment looks unworkable," Gregory Brew, senior Iran and energy analyst at Eurasia Group, wrote in a note this week.
"Even if Iran is allowed to enrich on an interim basis, it will not accept an arrangement that does not safeguard this right in perpetuity."
In addition, the Iranians "are also quite irritated that the U.S. has not engaged substantively with the issue of sanctions relief," Brew said. "They are asking for clarification on that issue; the Iranians of course are chiefly interested in a deal that brings sanctions relief for their economy."
The fact that Iran has openly threatened to directly strike U.S. assets in the region if attacked is tremendously significant, according to Trita Parsi, executive vice president at the Quincy Institute for Responsible Statecraft.
That's in large part because the missiles Iran deployed to strike Israel last October "actually were quite efficient," Parsi told CNBC's "Access Middle East" on Thursday.
"If there is a confrontation, and if the Iranians make true on their threats to target American bases, this is going to end up becoming a very, very devastating confrontation," Parsi said.
"And supporters of Trump from his own base are very worried that he will be jeopardizing his entire presidency over this issue, when in reality, there is a diplomatic deal in reach."
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