London/Dubai — Since the US imposed new sanctions on Tehran for Friday’s ballistic missile test, Iran’s conservative media has railed against the government for being too soft, the military has tested another projectile, and officials have generally thumbed their noses at a White House warning that it was now "on notice".
What hasn’t happened, however, is as important: no official has threatened to abandon the nuclear deal signed in 2015 under the Barack Obama presidency.
On Monday, Iran’s Foreign Ministry termed some recent US statements "antagonistic" and having "a threatening tone," but it also advised against rushing to conclusions about the government of Donald Trump.
Iran sought "a better evaluation of the new US administration", ministry spokesman Bahram Qassemi said in Tehran. "We still need to wait and not make hasty comments."
That is partly because the new sanctions are largely symbolic and in line with Obama’s policy. It’s also a sign of how many reasons Iran has to stick with the "joint comprehensive plan of action" and ensure that if it must collapse, Washington — not Tehran — takes the blame.
"For the moment they have support of the international community and they see continuation of the plan as a strength," said Aniseh Bassiri Tabrizi, research fellow at the Royal United Services Institute in London. "The best position for the Iranians is exactly where they are."
Russian Deputy Foreign Minister Sergei Ryabkov said Monday that the missile testing did not violate the nuclear deal, and that view had been conveyed to the US, reports RIA Novosti news agency.
Such relative stoicism from a famously prickly regime may not last. The limited US measures and tit-for-tat Iranian response may be just the start of a deliberate cycle of escalation, said Tabrizi. The "on notice" warning from US national security adviser Michael Flynn was followed on Sunday by a pledge from Israeli Prime Minister Benjamin Netanyahu to assemble "a partnership against Iran’s defiant aggression".
Still, even conservatives hammering President Hassan Rouhani ahead of elections in May — for signing the deal in the first place and then failing to respond to the new US administration with sufficient force — do not appear to be pressing for the agreement to be scrapped.
Trump "is the best opportunity for us, because he will show the essence of the US to the world and this is where we can prove our rightfulness", said Alireza Zakani, a former legislator and opponent of Rouhani, in an interview with the Fars news agency on Saturday.
Iran expected the new administration to start piling pressure on in non-nuclear areas such as missile tests and human rights to provoke the regime into harsh retaliation, so "it could be held responsible for the failure" of the nuclear deal, said Amirali Abolfath, an independent Tehran-based analyst. "So far, Iran has been rational."
Another reason for Iran to avoid collapsing the deal is financial. Although Trump’s Twitter claims that Iran was "on its last legs" before the nuclear agreement allegedly showered Iran with $150bn of unfrozen funds are inaccurate on both counts, the agreement has helped the country’s economy.
Iran’s oil production has bounced back to presanctions levels. In addition, although foreign investment had not yet come close to the hoped-for $30bn-$50bn a year, it had increased 42% since the agreement took effect, the government said in January.
The government is counting on those flows to support the budget for the coming fiscal year, which begins in March. Government spending will be 11% higher than last year and investment 12% up, according to the budget, which assumes economic growth of 7.7% for the year.
If Iran ceased compliance with the agreement and restarted full-scale enrichment of nuclear fuel, it would risk uniting Europe, Russia and China with the US in pressing for a "snapback" of sanctions. The budget would then unravel and the economy could suffer.
Gone back in time
Even minor sanctions could poison the atmosphere for investment, said Cyrus Razzaghi, president of Ara Enterprise, a Tehran-based business consultancy.
"The psychological impact on foreign investors can’t be ignored," he said, noting that some Asian and European clients had already held back on investment as they waited to see what policies the Trump administration would pursue on Iran.
Still, the effects of the latest sanctions were likely to be limited, said Razzaghi. Major international banks never restarted business with Iran. Meanwhile, any US attempt to target foreign companies for doing business in Iran more widely would put the US in breach of the nuclear agreement, he said.
The diplomatic benefits of the deal are also important to the Iranian regime, which is anxious to play a role with Russia, the US and others in resolving the Syrian conflict. That gave Iranian leaders further reason to moderate their responses, said Sanam Vakil, an associate fellow at the Royal Institute of International Affairs (Chatham House) in London.
The nature of the US-Iranian relationship had clearly snapped back already from one of cautious engagement under Obama to, at best, containment under Trump, Vakil said. "Anything is possible now," she said. "I feel we have gone back in time."